Another record for the Dow, but the other major averages have lagged. I guess you don’t necessarily have to own any of the so-called FANG stocks to make money these days, as the bluest of the blue chips have led the market. Over the past few weeks, the Dow has been led higher by traditional names like Apple, Boeing, Caterpillar and 3M. For the week, the Dow Industrials gained another 262 points or 1.2% to close at 22,093, just five months since it broke through 21,000. True, the Dow is price-weighted, and stocks with triple digit price tags will move the average disproportionately. The more diversified and market-cap weighted S&P 500 moved up a fraction and the tech-heavy NASDAQ fell by 0.36%. Small-cap stocks took a breather too, with the Russell 2000 shedding 1.2%. Not only did some of the long-standing industrials do the heavy lifting, but prosaic utilities and income-centric financials also led the charge this week.
A stronger-than-expected jobs report helped sentiment, but was offset by a disappointing ISM Non-Manufacturing Index and consumer prices remain flat. Employers added 209,000 new jobs in July, handily beating expectations and the unemployment rate hit a 16-year low at 4.3%. Other positives driving the markets include durable goods orders, housing and resilience in manufacturing. The consumer, however, has been more cautious as seen by an extended slump in new car sales and reluctance at the retail counter.
OPEC meets early in the week to scold member nations that are reneging on output cuts and oil prices may bounce if there is some success there. Looking ahead, some of the nation’s largest department store chains (Macy’s, Kohl’s, Nordstrom) will be reporting second quarter results on Friday, all indicating lower profits from last year. We will also hear from conservative candidate CVS Health, which will do well to meet last year’s figures as well. On balance, however, investors remain optimistic.
Here is the answer to last week’s trivia question: Ford Motor Co. was founded by Henry Ford in 1903. In what year did the company become publicly held? 1905, 1919, 1931 or 1956. Answer: January 17, 1956.
Today’s Trivia Question: The “40” in the WD-40 Co. brand represents the fortieth attempt to perfect the iconic lubricating formula. What does the “WD” stand for? Will-Do, Wilmer Dawson, Water Displacement or Wear Detraction.