Stocks Grab Another Weekly Win as Trade Picture Brightens

Apple and Caterpillar were two blue chips to make headlines this week

by Josh Selway

Published on Sep 13, 2019 at 3:07 PM

U.S. stocks had another solid week. The major indexes are sitting just below record highs, and are on pace for a third straight weekly gain. In fact, the Dow Jones Industrial Average (DJI) is set to take its historic win streak into the weekend, as traders in recent days were mostly greeted with headlines about positive trade developments between the U.S. and China. Central banks remained in focus, too, after the Europe Central Bank's (ECB) cut interest rates mid-week.

AAPL Headlines Tech Sector Action

The tech sector was in focus all week since trade was front and center, and no stock received more attention than Apple (AAPL). The iPhone maker revealed a number of new products, and gave more details on its streaming service. However, a bearish analyst note from Goldman Sachs had the stock in the red on Friday.

Given the rosy trade picture, semiconductor names did well, though Wall Street did not respond favorably to Broadcom's (AVG) earnings update. But despite the small pullback from the shares, several AVGO analysts actually raised their outlooks on the chip maker.

 

Oil Gives Up Gains; Growth/Value Ratio Flips

Early in the week, oil prices were rising alongside equities thanks to hopes of output cuts from the major suppliers. However, crude futures have cooled in the final days of the week, sending liquid gold to a likely weekly decline. Staying in the energy sector, one name options traders had their eye on was Chesapeake Energy (CHK), where traders may have been buying October puts.

Looking at trading action more broadly, the reversal among traders to go from growth stocks to value stocks grabbed Wall Street's attention, with many speculating what this could mean for markets. Our own Senior Quantitative Analyst Rocky White dug into the data to explain what traders may want to expect after such an intriguing change in trader sentiment.

Schaeffer's Gives Tips for Options Traders

If you are considering value stocks, not all blue chips are exactly attractive targets right now. For instance, Dow component Caterpillar (CAT) is flashing two warnings signs, so at the least short-term traders should be wary about the trade-sensitive construction concern. Speaking of prospective options traders, Schaeffer's made an appearance on the How to Trade Stocks and Options Podcast, with our Senior Market Strategist Matthew Timpane giving out three tips for options traders.

Fed Meeting Ahead

All of this comes as the Fed gets ready to meet again next week, and investors are mostly expecting the central bank to lower interest rates. With this uncertainty lingering, on top of the ongoing U.S.-China trade back-and-forth, traders should take note of what Schaeffer's Senior V.P. Research Todd Salamone wrote about using options as a risk-management tool.

 


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