Another Week Of Record Highs On Wall Street

Commenting on Friday’s trading which saw record highs for many stock indices, Gorilla Trades strategist Ken Berman said: 

We had a typical bullish consolidation day on Friday, and the fact that the major indices finished at their intraday highs shows how eager bulls are to buy every dip.

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Stocks gained ground for the second day in a row, and while a slight pullback would have been natural following Thursday’s blowout session, shorts continued to bleed ahead of the weekend break.

The major indices closed mostly higher on Friday, following a choppy and quiet session, as stocks held onto their lofty gains from Thursday despite the weaker-than-expected economic releases. The Dow was up 50, or 0.2%, to 29,348, the Nasdaq gained 32, or 0.3%, to 9,389, while the S&P 500 fell by 13, or 0.4%, to 3,330. Decliners outnumbered advancing issues by a less than 5-to-4 ratio on the NYSE, where volume was slightly below average.

Record highs for S&P500, DJI and NASDAQ

The signing of the ‘phase one’ trade deal between the U.S. and China dominated headlines this week, and while the initial reaction to the final version fo the agreement was mixed, at best, the week ended on a clearly positive note. Stocks hit new all-time highs across the board, with all of the key large-cap benchmarks, even the previously lagging Dow leaving behind the dip that was caused by the U.S.-Iran tensions. The first batch of the fourth-quarter earnings reports came out as well, with a focus on the financial sector. As it was the case in the past few quarters, most of the companies beat the consensus estimates, boosting investor confidence in the second half of the week, and it seems earnings could provide the next bullish catalyst.

The key economic releases were mixed following a clearly bullish week, but the most important forward-looking indicators were very strong, and that also fueled the record-breaking rally in stocks. The Philly Fed Index and retail sales were very strong, with the former measure hitting its highest level in five-month, and while the Michigan consumer sentiment number and building permits missed, housing starts surged higher in December.

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