Earnings Reports Aid Stocks Early
By Laif Meidell, CMT, President of American Wealth Management, and Portfolio Manager of the AdvisorShares Meidell Tactical Advantage ETF (NYSE Arca: MATH) and the AdvisorShares Market Adaptive Unconstrained Income ETF (NASDAQ: MAUI)
Just when some investors appeared to be heading for the exits over the past day or two, U.S. stocks got off to a positive start on Thursday after some retail companies released earnings that were better than analysts had expected during the morning hours.
Investors plowed back into the stock market shortly after the opening bell, with the major market averages making most of their gains in the first five minutes of the day, then spending the remaining trading hours drifting sideways to slightly higher. By the closing bell the Standard and Poor’s 500 was up 0.47 percent and the Nasdaq Composite had gained 0.46 percent, with all three of the major market averages closing at all-time highs.
If you were an oil investor your head had barely stopped spinning from Wednesday’s sharp decline in crude oil prices, after a report from OPEC showed that Saudi Arabia’s daily oil output in July was at an all-time high. But oil prices did an about face and rocketed higher early Thursday after Khalid al-Falih, Saudi’s new oil minister, said that they would “take any action to help” the crude oil market, including working together with other countries to reconsider limits on oil production at their September meeting.
Though it may have merely been the minister’s attempt to talk the price of oil back up with false hope, investors dove back into the “black gold,” driving the price of U.S. crude oil higher by nearly 4 percent to close at $43.33 by the end of the day.
One would think that with stocks making new highs, some investors might consider hedging their bets by shifting money into higher quality bonds. Instead, this week’s top performing bonds are a reflection of the bullish bias in the stock market lately, with lower quality bonds generally leading the way higher.
The one exception this week was the market leader, the Citi International Inflation Linked Securities index up 1.81 percent over the past five trading days, and following close behind by the Barclay’s High Yield Very Liquid (Junk Bond) index higher by 1.22 percent.