Wall Street Reacts to Fed Decision, Trade Deal

The Dow, S&P 500, and Nasdaq all nabbed fresh record highs on Thursday

by Patrick Martin

Published on Dec 13, 2019 at 1:30 PM
Updated on Dec 13, 2019 at 2:25 PM

This past week was full of waiting and reacting on Wall Street. Stocks struggled for direction both before and immediately after the mid-week Fed decision to hold interest rates steady. But then investors once more resumed their unpacking of the latest U.S.-China trade headlines. Reports of a "phase one" deal nearing completion sent the Dow, S&P 500, and Nasdaq to record highs on Thursday, but stocks pivoted lower on Friday despite China confirming the trade deal. Nevertheless, all three benchmarks turned in weekly wins.  

Blue Chips Own the Street

It seemed like almost every Dow stock found its way into headlines this week. Energy icon Exxon Mobil (XOM) ran up to a historically bearish trendline, while similar data shows it's time for bears to bet on chip stock Intel (INTC).  RBC heaped praise on restaurant stocks, including the golden arches of McDonald's (MCD).

Merck (MRK) made a big splash on the M&A front, but weak guidance weighed on Home Depot (HD). Red-hot bank stock J.P. Morgan Chase (JPM) looks to be the Dow stock to target down stretch of 2019, though. 

FDA Delivers Gifts to Biotechs

Christmas came early for several biotech names. Sangamo Therapeutics (SGMO) soared after its gene-editing therapy treatment reported positive results. The Food and Drug Administration (FDA) approved Amneal Pharmaceuticals' (AMRX) generic version of birth control, and sent the stock to five-month highs.

The FDA wasn't done, though; they also approved Sarepta Therapeutics' (SRPT) Duchenne Muscular Dystrophy (DMD) treatment; a big surprise considering they served up a rejection back in August. Immunomedics (IMMU) didn't have any news to tout, but the stock is still flashing a bullish signal, nonetheless.

Retailers TJX, SFIX Turn In Big Gains

As the holidays inch closer, the retail sector comes into focus, especially now after November retail sales fell far short of expectations. Cowen doesn't seem to be too concerned with TJX Companies (TJX), calling the retailer "impressive." Peloton (PTON) went into rally mode in the wake of last week's highly scrutinized holiday ad, while red-hot Lululemon (LULU) dealt with the fallout of a C-suite departure.

Starbucks (SBUX) picked up two upgrades on the week, and a big earnings winner from the sector was e-tailer Stitch Fix (SFIX). Rounding things out, we also broke down three reasons to go long on Stamps.com (STMP) with options.

Broadcom's Busy Week

We flagged Micron Technology (MU) for its weekly call activity targeting more gains before earnings next week. Broadcom (AVGO), despite being a huge outperformer this decade and reporting an earnings beat this week, pulled back from record highs. Elsewhere, bull notes rolled in for Analog Devices (ADI) and Nvidia (NVDA).

GDP, Nike Earnings Highlight Final Full Week of 2019

Next week is the last full week of December, and will be highlighted by the third-quarter gross domestic product (GDP) report. Blue-chip retail giant Nike (NKE) will step into the earnings confessional too, and these are 25 best stocks during the second half of December. Meanwhile, keep an eye on this VIX level and gold as a safe-haven asset, especially after this one options trader forked over a big bullish bet.


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