Powell, Tax Plan Lead U.S. Stocks to New Highs

The Fed chair nominee said 'the case for raising interest rates' in December is strengthening

Nov 28, 2017 at 4:25 PM
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It was another breakout trading session on Wall Street today, with the Dow Jones Industrial Average (DJIA), S&P 500 Index (SPX), and Nasdaq Composite (IXIC) all soaring to new heights. Financial shares rallied after Fed chair nominee Jerome Powell said at today's confirmation hearing that current bank regulations are "tough enough," and that "the case for raising interest rates at our next meeting is coming together."

Adding to the bullish bias, the Senate Budget Committee passed along the GOP tax plan to the full Senate for a potential vote later this week, economic data came in stronger than expected, and retail stocks surged on record-setting Cyber Monday sales data. And despite a mid-afternoon dip on news North Korea launched another ballistic missile test, all three indexes resumed their momentum into the close to settle at record highs.

Continue reading for more on today's market, including:

  • The 25 best December stocks.
  • This red-hot RV stock could be ripe for a short squeeze.
  • The $8 million bullish options trade on emerging markets.
  • Plus, the retail stock to watch tomorrow; the stock that's "materially cheaper" than its FAANG rival; and why Caterpillar's ideal for long-term traders.

The Dow Jones Industrial Average (DJIA - 23,836.71) hit a record intraday high of 23,849.61, and closed not far from here -- up 255.9 points, or 1.1%. JPMorgan Chase (JPM) paced the 27 Dow advancers with its 3.5% pop, while Apple (AAPL) led the three decliners with its 0.6% loss.

The S&P 500 Index (SPX - 2,627.04) tagged an all-time peak of 2,627.69, before closing up 25.6 points, or 1%. After notching a record high of 6,914.19, the Nasdaq Composite (IXIC - 6,912.36) settled with a 33.8-point, or 0.5%, gain.

The CBOE Volatility Index (VIX - 10.03) added 0.2 point, or 1.6%, but still closed below its 50-day moving average for a fifth straight day.

Closing Indexes Summary Nov 28

NYSE and Nasdaq Nov 28

5 Items on Our Radar Today

  1. Fitch Ratings downgraded its long-term credit score for General Electric (GE) to A+ from AA-, and its short-term rating to F1 from F1+, citing the "deterioration" of the Dow stock. This marks the second credit downgrade for GE in as many weeks, with Moody's Investors Service lowering its outlook on Nov. 16. (MarketWatch)
  2. Alphabet (GOOGL) was granted a delay in its lawsuit against Uber, after the latter was found to have withheld evidence from both the court and the former's self-driving car unit Waymo. Alphabet is suing Uber over allegedly misusing its trade secrets. A new trial date has yet to be set. (Recode)
  3. Luxury retailer Tiffany (TIF) will report its quarterly results in the morning, and the stock has a history of positive post-earnings reactions.
  4. One analyst called this surging streaming stock "materially cheaper" than Netflix, while options traders today bet on even bigger gains.
  5. Our senior trading analyst breaks down why Caterpillar (CAT) stock makes more sense for a long-term options trade versus a short-term one.

Corporate Earnings Chart Nov 28

Unusual Options Activity Nov 28
Data courtesy of Trade-Alert

Commodities

Oil prices fell for a second straight session, as anxiety ramped up ahead of Thursday's Organization of the Petroleum Exporting Countries (OPEC) meeting. January-dated crude closed the session down 12 cents, or 0.2%, at $57.99 per barrel.

Gold edged higher today, as the Senate Banking Committee held a confirmation hearing for Fed chair nominee Jerome Powell. Gold for December delivery added 50 cents to settle at $1,294.90 an ounce.

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