Dow Surges to All-Time High, Crude Dips After Trump Criticizes OPEC Policy

On Thursday, the Dow Jones Industrial Average may have surged to an all-time high, but a third of its components still remain in a correction. Weekly U.S. jobless claims fell to their lowest level in nearly 49 years last week, totaling 201,000, according to the Labor Department. Economists were looking for claims to come in at 210,000. The 10-year yield hit its highest level since May earlier today after the release of strong U.S. economic data. Crude oil prices fell on Thursday after U.S. President Trump called on OPEC to “get prices down now!” ahead of this weekend’s meeting of major oil exporters.
James Hyerczyk
Bull Market 1

The numbers are bullish on Thursday, but it doesn’t feel like a resumption of the bull market. Earlier today, the Dow Jones Industrial Average hit a new record high for the first time since late January. The S&P 500 Index also hit a new all-time high. The NASDAQ Composite also jumped one-percent.

The moves were primarily supported by strength in a few bellwether issues like Boeing and Caterpillar. Apple, a component in all three major indexes, also contributed to the rally with a 1.6 percent jump. Amazon is also trading higher as investors brace for the unveiling of new Alexa-powered devices.

Why doesn’t it feel like a bull market? Because not all sectors and stocks are participating in the rally.

On Thursday, the Dow Jones Industrial Average may have surged to an all-time high, but a third of its components still remain in a correction. At this time, 10 members of the Dow are trading in correction, defined as trading 10 percent below recent highs. The worst of the group is Intel, down 19 percent from its all-time high in early June and hovering just 1 percent above bear market territory. Other Dow components in a correction include 3M, Goldman Sachs, Walmart and IBM.

U.S. Economic Data

Weekly U.S. jobless claims fell to their lowest level in nearly 49 years last week, totaling 201,000, according to the Labor Department. Economists were looking for claims to come in at 210,000.

The Philadelphia Fed Index rose to 22.9 in September from 11.9 in August. Economists had forecast a reading of 19.6. The Federal Reserve Bank of Philadelphia said the number partly reflected faster new orders and shipments growth. The report also showed a significant acceleration in the pace of growth in regional manufacturing activity in the month of September.

U.S. home sales flatlined in August but inventory increased for the first time in three years as the housing market continued to struggle despite strength across the broader economy.

The National Association of Realtors said on Thursday that existing home sales were unchanged at a seasonally adjusted annual rate of 5.34 million units last month. Traders were looking for a reading of 5.36 million units. Existing home sales fell 1.5 percent from a year ago.

U.S. Treasury Markets

The 10-year yield hit its highest level since May earlier today after the release of strong U.S. economic data. The yield on the 10-year U.S. Treasury note rose to 3.096 percent, its highest level since May 18, before pulling back to 3.06 percent.

Crude Oil

Crude oil prices fell on Thursday after U.S. President Trump called on OPEC to “get prices down now!” ahead of this weekend’s meeting of major oil exporters.

According to reports, the meeting is unlikely to lead to an agreement to raise crude output, although pressure is mounting on top producers to prevent a spike in prices. U.S. President Trump weighed into the debate via Twitter on Thursday, urging OPEC to cut prices.

“The OPEC monopoly must get prices down now!,” Trump said.

“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil price! We will remember.”

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