*Currency markets and Bitcoin trade 24 hours, the figures here indicate movements between 9am and 4pm ET Tech stocks weigh down on the markets
If it weren't for the continued sell-off in tech stocks, today would've been a positive day for major U.S. markets. The DJIA and the S&P 500 both rallied as energy and utility stocks led the way, as they have been for the past several weeks. The 1-year U.S. Treasury note hit its highest level since 2008. That's a sign that investors are confident about the near-term, but pretty iffy on long-term prospects.
Shares of Apple continued to fall following the 7 percent sell-off last Friday as investors punished the company for reining in end of the year sales expectations. Investors need to find a way to forgive Apple for only posting sales of $63 billion last quarter and promising between $89-93 billion for the first quarter. Dickens would've had a field day with these 'Great Expectations'.
Speaking of great, have you seen McDonald's shares lately? All-time record for the Golden Arches. Talk about a happy meal! It's our chart of the day below replete with analysis from our Trading & Investing Editor, James Chen.
But, let's face it, most people are consumed with the midterm elections tomorrow, and the political fate of the country. Trading volume was thin today compared to the madness of October. We are reaching the finish line for corporate earnings season, and while the results have generally been strong, there is a heavy feeling in the air that it won't get better than this for a long time.
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Stalling S&P Sales Growth Threatens The Bull Market Buybacks abound
Today seemed to be a coming out party for CEO's to announce they are buying their own company's shares. GE's new CEO is doing it. IBM's Ginni Rometty is doing it. Even Buffett said this weekend that Berkshire Hathaway is buying nearly $1 billion of its own shares.
Why it Matters: Share buybacks are a sign that a company's executives think their stock is undervalued, or they have no better use for the cash, or they want to make a public display of their confidence in their own abilities, or all of the above. Buybacks reduce the publicly available share count for a company which can boost its price by taking supply off the market.
In the case of GE, newly installed CEO Larry Culp bought $2.2 million in stock. That's not going to do anything to GE's massive share float, but it does tell the world that he plans to eat his own cooking. As for IBM, which has been struggling of late, Rometty's share purchase of $3 million shares may be a sign that she thinks the company's best days are in front of it, especially since the Red Hat acquisition last week. Or, she is thinking about her future plans post IBM. $2 million out of the 3 were bought by her retirement fund.
What's Next: When earnings season ends, you'll hear more buyback news. Companies and executives typically pause to avoid even a whiff of trading with insider knowledge. A record number of buybacks were announced this year as most companies think their stock will be higher 6-12 months from now or it doesn't make sense to invest in anything else, like R&D or paying their employees higher wages.
Read More:
Why would a company buy back its own shares?
The impact of share repurchases
4 Reasons Why Investors Like Buybacks
A nation of 401(k) millionaires
Fidelity says the number of people with 401(k) accounts in their shop with balances over $1 million reached 187,400 at the end of September, up 42 percent from a year ago, and topping the previous record set earlier this year. You can thank the booming stock market in the first half of the year for that boost.
Why it Matters: As we noted last week, for most people, the 401(k) is one of the only ways they save and invest. If it weren't for that voluntary deduction out of our bi-weekly paychecks, which sometimes comes with a match from your employer, even more than half the country would've missed out on the rise of the stock market over the past decade. Yes, the market has been shaky of late, but lengthen the time range on the chart, and it's been a sweet climb up that has compounded annually. No promises that it will continue forever, but you can't deny history. Be invested, somehow, somewhere..
What's Next: Most Americans will see a tax cut and a better return when they file their 2018 income taxes. What will you do with yours?
Read More:
How to Become a 401(k) Millionaire
401(k) Contribution Limits in 2018-19
Editor's Note: A few of our readers from outside the U.S. have asked us for more global coverage. We aim to please, we will try to include at least a link or two with comprehensive coverage. We'll continue to seek more ways to do this better, but this is a start.
Global Markets Wrap
Euro Zone Asks Italy to Change Budget, Rome Digs in Heels
Chart of the Day: McDonald's stock hits new all-time high
Shares of the iconic fast-food chain, McDonald's, finally broke through the stubborn $179 level on Monday to hit a new record high around $181 before paring some of those gains in afternoon trading.
The company's earnings report two weeks ago easily beat on both the top and bottom lines, prompting the stock to gap up and re-test its last major high back in January. The company also announced that it would raise its quarterly dividend by 15% to $1.16 per share for the fourth quarter; its dividend payout has been increasing steadily and reliably for many years. Additionally, positive analysts' recommendations have been piling up and are overwhelmingly bullish on the stock.
But perhaps this is just the Kanye West effect. On Sunday, West simply tweeted: "McDonald's is my favorite restaurant". The tweet garnered over 240,000 likes and over 58,000 retweets as of Monday afternoon, possibly helping to fuel more buying of McDonald's stock. Whether West's warm sentiments towards the restaurant chain has any lasting effect on its stock remains to be seen. However, it's undeniable that there is real bullish sentiment for MCD on Wall Street right now, and this could translate into further follow-through to the upside after Monday's breakout.  Enjoy the Market Sum? Share it with a friend. CONNECT WITH INVESTOPEDIA |
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