Market recap for April 20, 2017

Stock market indices and today’s changes
How did the overall markets do?

Dow Jones Industrial Average: 20,578.71 (+174.22, +0.85%)
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: 2,355.84 (+17.67, +0.76%)
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: 5,916.78 (+53.74, +0.92%)
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.


Top financial headlines
What caused the markets to go up or down?

The Trump administration will unveil a tax reform plan “very soon”…
Treasury Secretary Mnuchin today said that the Trump administration will unveil a tax reform plan very soon and it will be approved by Congress this year whether a healthcare overhaul happens or not.

Why do we care? Post the November election, markets have rallied mainly on hopes for 3 things: tax reform, deregulation, and infrastructure spending (these are in the correct order in terms of which the markets would like to see most). After the failed attempts last month to repeal Obamacare, investors became pessimistic that the Trump administration would be able to pass their other agenda items such as tax reform, which is one of the reasons why the market has been under some pressure lately. Mnuchin’s comments today reinvigorated expectations that tax reform is still possible in 2017, which investors hope will boost corporate earnings, increase economic growth, and help stock prices.

 

People are charging more on their American Express cards lately, helping American Express (a Dow stock) to post better than expected quarterly earnings…
After the closing bell on Wednesday, American Express posted strong quarterly earnings helped in part by higher spending by card members.   The stock ended the day up nearly 6% (ticker: AXP).

Why do we care? American Express is a stock contained in the Dow Jones Industrial Average, so its rise today of nearly 6% provided a major boost to the index. On Tuesday and Wednesday, we have written about how Goldman Sachs and IBM (2 other Dow stocks) posted weaker than expected earnings and this helped lead to a market sell off. The opposite effect took place today. In addition, strong earnings from a company like American Express is a very good economic sign since higher spending on credit cards typically means a healthier consumer.


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