Dow Jones Industrial Average: 20,523.28 (-113.64, -0.55%)
Reflects changes in 30 well-known stocks (e.g. Apple, General Electric, IBM, Exxon Mobil). Daily movements of +/- 100 points are considered to be large.
S&P 500: 2,342.19 (-6.82, -0.29%)
Reflects changes in 500 stocks that includes large companies across all sectors. Because it consists of so many diverse companies, it is considered one of the best representations of how the stock market is doing. Daily movements of +/- 10 points are considered to be large
NASDAQ: 5,849.47 (-7.32, -0.12%)
Reflects changes in an index of more than 3,000 stocks that consists mainly of technology companies. Stocks such as Google, Amazon.com, and Microsoft are traded on the NASDAQ. Daily movements of +/- 30 points are considered to be large.
Theresa May (UK Prime Minister) called for snap elections…
May called for snap elections to take place on June 8, in what was a considered a surprise to strengthen her hand in Brexit negotiations. The British Pound currency jumped to its highest level in more than 2 months following the announcement.
Why do we care? May has pushed for a hard exit out of the EU, but Brexit will require compromise and if May can pull off a big win in the elections, this will strengthen her mandate which should bring more stability in the longer-term. However, investors already have their eye on several other European elections taking place over the next few months (i.e. French elections – see ‘Broader Market Update’ section for details) so any movement in the polls towards an unexpected outcome could lead to some volatility.
Wait, Goldman Sachs earnings were what?…
In a rare miss, Goldman Sachs reported quarterly earnings this morning that were lower that what Wall Street analysts had predicted.
Why do we care? Goldman Sachs stock price fell nearly 5% today, and the stock is incorporated in the Dow Jones Industrial Average (an index of only 30 stocks). Therefore, this large movement in one stock has a significant impact on the overall market (notice that the Dow declined on a percentage basis more than the S&P 500 and the Nasdaq today, party because GS was such a drag on the index). In addition, investors are closely watching these stocks to see how their businesses are performing and if that justifies the large increases in their stock prices seen since the election. While this is a negative data point for the sector, Goldman’s results were in contrast to its banking rivals (e.g. J.P. Morgan, Citigroup, Bank of America) which over the past week have reported better quarterly results.