US Stock Market Overview – Stocks Rally Led by Energy, Technology Shares Continue to Outperform

 

US stocks continued to surge higher led by gains in Apple, Amazon, Microsoft, Facebook, and Alphabet. CNBC did an analysis of the S&P value index relative to the S&P 500 which showed that these 5-large cap tech stocks were the catalyst behind the upside movement in stock prices in 2020. Most sectors in the S&P 500 index were higher on Thursday, driven by gains in Energy and Technology, real-estate shares bucked the trend. Jobless claims dropped on Thursday for the 4^th consecutive week. Gold prices eased, while oil prices stabilized after tumbling 4% on Wednesday. Grain prices were nearly unchanged with organic corn prices moving sideways.

The rally in share was driven by the decline in geopolitical concerns, following the rockets Iran sent into Iraq earlier in the week. It appears that a Ukrainian Boeing 737 was shot down during the Iranian raid of an Iraqi military base, killing many foreign persons. Canada is now demanding that Iran let international investigators into Iran to allow them to analyze the cause of the downed plane. This could keep a geopolitical bid under gold prices. Traders await Friday’s jobs report from the US Department of Labor. Expectations are for 165k jobs. This follows Wednesday’s larger than expected increase in private payrolls reported by ADP.

Jobless Claims Drop

The jobs data continues to point to a robust US economy. Initial claims dropped 9,000 to 214,000 for the week ended January 4, according to the Labor Department. This was the fourth straight weekly decline. Expectations were for claims to decrease to 220,000 in the latest week. The four-week moving average of initial claims, fell 9,500 to 224,000 last week.

Business Confidence is Low

Business confidence seems to have tumbled which is a stark contrast to consumer confidence which remains at record highs. Chief executive officers and chief financial officers see an economy that is heading into a slowdown. Recent surveys by Deloitte a consulting and accounting giant show that CEOs believe a recession is the biggest risk in 2020.