Major U.S. benchmarks spent most of the week trading in uncharted territory
The major U.S. benchmarks continued to carve out new highs this week, inspired by promises of a massive tax plan from President
Donald Trump. In fact, the Dow, S&P 500 Index (SPX), and Nasdaq Composite (COMP) simultaneously logged a fifth consecutive
closing high on Wednesday for
the first time in 25 years, and on Thursday, flashed this signal not seen since just before
Black Monday! Nevertheless, stocks lost steam as the week wore on -- a move possibly predicted by
this indicator -- after Trump prioritized an
Obamacare repeal and replace over his highly touted tax plan. Though the Dow managed to extend its daily win streak to six after a strong earnings reaction for
Cisco Systems, Inc. (NASDAQ:CSCO), the S&P and COMP left theirs at seven. The
selling is continuing today ahead of the long holiday weekend, with little in the way of earnings and economic data to shift traders' moods.
Cisco, Arista Networks Shares Surge Post-Earnings
Nevertheless, there was plenty of action outside of the Oval Office for Wall Street to digest this week. In addition to CSCO's earnings report, sector peer
Arista Networks Inc (NYSE:ANET) delivered a quarterly beat that sent the tech shares soaring into uncharted territory. Drugmaker
Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) also gapped higher post-earnings, as did discount e-tailer
Groupon Inc (NASDAQ:GRPN), though results from car manufacturer
Tata Motors Limited (ADR) (NYSE:TTM), retailer
Fossil Group Inc (NASDAQ:FOSL), and nutritional supplements specialist
Nu Skin Enterprises, Inc. (NYSE:NUS) weren't so well-received.
Buffett Boosts Apple Stock to New High
Additionally, traders mulled over a recently released batch of SEC filings. Warren Buffett's Berkshire Hathaway Inc. (BRK.A) helped send
Apple Inc. (NASDAQ:AAPL) to a record high, after the firm said it nearly quadrupled its exposure to the iPhone maker. The Oracle of Omaha also upped the bullish ante on
airlines, as well as
Sirius XM Holdings Inc. (NASDAQ:SIRI). On the flip side, BRK.A sold its shares in
Deere & Company (NYSE:DE). Several hedge funds shuffled their positions on
FANG stocks, too, while Nelson Peltz's Trian Fund Management unveiled a $3.5 billion stake in
Procter & Gamble Co (NYSE:PG) -- sending the shares to a new annual high.
Hawkish Fed Translates Into Tailwinds for Financial Shares
Elsewhere, financial stocks continued to be in focus, with several Fed speakers taking a relatively hawkish tone toward
interest rates. This included Fed Chair
Janet Yellen, who, in her two-day congressional testimony, waxed optimistic about the U.S. economy and left the door open for a March rate hike. Bank shares have already been on a tear since Trump's surprise win in early November amid expectations of
decreased regulation, and higher interest rates will likely translate into a boon for the sector. The hawkish Fed talk helped boost the
Financial Select Sector SPDR Fund (XLF) to levels not seen since 2008, while shares of these two
financial stocks hurdled key technical levels.
Technical Levels Key to Trading
According to Schaeffer's Senior V.P. of Research Todd Salamone, it's critical for traders to keep an eye on technical indicators to identify opportune
entry and exit points on stocks. In fact, an uninviting technical setup was one of five reasons our Senior Trading Analyst Bryan Sapp chose not to recommend
buying put options on United Parcel Service, Inc. (NYSE:UPS). Meanwhile, Schaeffer's Senior Options Strategist Tony Venosa, CMT, targeted breaches of the lower
Bollinger Band when describing 11 reasons to buy these two stocks. This typically reliable
buy signal also just flashed for this pair of stocks, as well, but with trading, it's always best to look at
the whole picture.
Presidents Day Week Could Be a Rough One for Stock Markets
Next week, U.S. markets will be closed on Monday for
Presidents Day. The holiday-shortened trading week has historically been a bearish one for the S&P, and
put buyers may want to keep an eye on this particular pair of laggards. However, not all stocks underperform -- options bulls may want to check out these
25 historic outperformers. Additionally,
retail stocks will be on Wall Street's radar, with a number of notable names set to report earnings.
Get a jump-start on the day's stock market news with Schaeffer's free Opening View newsletter.