Stocks Swallow Steep Weekly Losses; Oil, Gold End Higher

Uncertainty on trade dominated the day as Kudlow and Navarro sent mixed messages

Dec 7, 2018 at 4:30 PM
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Stocks fell across the board today, with losses deepening as the session continued. Futures came off their lows ahead of the open after the November jobs report showed continued expansion in the labor market and wage growth, but the monthly gains were ultimately shy of expectations.

Meanwhile, following Thursday's Huawei-driven panic selling, not much clarity was forthcoming on the state of Sino-American trade relations. While White House advisor Larry Kudlow told CNBC that President Donald Trump may be willing to extend the tariff truce beyond 90 days if talks with China were progressing, fellow policy advisor Peter Navarro told CNN that tariffs would be enforced if no agreement was made during the ceasefire period. Against this backdrop, equities ended the week sharply lower.

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

  • 3 marijuana movers after today's Altria/Cronos deal.
  • Broadcom opened up big before enduring a volatile session.
  • Plus, a record biotech IPO; the drug stock to scoop up; and OPEC makes a call on production cuts.

The Dow Jones Industrial Average (DJI - 24,388.95) slid to a loss of 558.7 points, or 2.2%, as all 30 of its components ended in the red. Consumer goods giant Johnson & Johnson (JNJ) was relatively unscathed, suffering just a 0.3% dip, while Intel (INTC) paced the decline with a 4.4% fall. For the week, the Dow gave up 4.5% -- its largest weekly drop since March -- and is now just another 0.5% decline away from hitting a "formal" 10% correction from its Oct. 3 high of 26,951.81.

The S&P 500 Index (SPX - 2,633.08) shed 62.9 points, or 2.3%, to bring its weekly deficit to 4.6%. The Nasdaq Composite (IXIC - 6,969.25) gave up 219 points, or 3.1%, and lost 4.9% on the week. As with the Dow, both the SPX and Nasdaq recorded their biggest weekly declines since March. The SPX closed back in correction territory today for the first time since Nov. 23, while the Nasdaq marked its third daily close in a correction.

The Cboe Volatility Index (VIX - 23.23) ended the day up 2 points, or 9.6%. The VIX's weekly advance of 28.6% was its largest since mid-October, and the volatility gauge notched its highest daily settlement since Oct. 30.

closing indexes summary dec 7

nyse and nasdaq stats dec 7

5 Items on our Radar Today

  1. Ahead of a highly anticipated filing by special counsel Robert Mueller's office, a flurry of news came out of the White House today. Amid rumors John Kelly will soon step down as chief of staff, CNN reports Kelly was questioned by Mueller's team about "potential obstruction of justice." Separately, President Trump nominated William Barr as attorney general, in a potential reprise of the role he played under then-President George H.W. Bush from 1991-1993. (The Hill; CNN; BBC News)
  2. After raising more than $604 million in a record-setting initial public offering (IPO) for the biotech sector, Moderna (MRNA) fell in its Nasdaq debut. The stock priced at $23 per share late Thursday, and closed today's session at $18.60. (MarketWatch)
  3. Drug stock ZTS just sent up a buy signal.
  4. The Akorn court ruling that brought options traders out of hiding.
  5. Why we bought Wayfair call options.

corporate earnings dec 7

unusual options volume dec 7

Data courtesy of Trade-Alert

Oil Pops on OPEC Production Cuts

Oil futures settled higher today, after the Organization of Petroleum Exporting Countries (OPEC) announced production cuts of up to 1.2 million barrels per day -- 800,000 from member countries, and as much as 400,000 from nonmembers. January-dated crude futures advanced $1.12, or 2.2%, to finish at $52.61 per barrel. For the week, oil jumped 3.3%.

Gold futures benefited from Wall Street's risk-off mood, with February-dated futures advancing $9, or 0.7%, to settle at $1,252.60 per ounce. On a weekly basis, gold rose 2.2% to notch its highest close in nearly five months.

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