*Currency markets and Bitcoin trade 24 hours, the figures here indicate movements between 9am and 4pm ET #1 It's okay to look
October is over. It's OK to look. Last month's sell-off took nearly 7 percent off the S&P 500 and wiped out nearly $2 trillion in market value. It was the worst decline since September of 2011. Keep in mind that just a few days represented nearly half of that loss. The rallies in the final two days of the month helped recover part of that loss and we are now about flat, year-to-date on the S&P 500.
Here's where all major U.S. markets stand for the year, with two months to go:
DJIA: +2.3%
S&P 500: +2.1%
Nasdaq: +7.1%
You'll read headlines today that said the market rallied on President Trump's non-negative comments about trade negotiations with China.
Those comments may have boosted the Chinese Renminbi, as we show below in our chart of the day. It's more plausible, though, that investors, especially institutional investors, have become buyers as many stocks and ETFs have become a lot cheaper since August. Either they see opportunities to add to existing positions, they want to accumulate new positions, or their trading algorithms were triggered to buy as some securities hit key support levels. It's probably a combination of those things and more.
Why it Matters: Retail investors like us can't control the political economy, institutional activity in the markets or volatility like we experienced last month. We have to have our own plan based on our needs, goals and risk profile. We can pay attention to signals or trends we see in the market, and adjust accordingly. We can also broaden our awareness and pay attention to investor sentiment more broadly. This is a good gut-check for ourselves.
Here are a few trends we are picking up on: (Subscription required, but you get the gist) The dire sentiment is palpable. We should expect that after so many sell-offs and we have definitely not seen the last of the them. But, as Bob Marley would say, "Out of the darkness there must come out the light…" Sentiment follows trends and is always amplified in either direction.
What's Next: We'll get the October non-farm payrolls report Friday morning and the FOMC meets on interest rates next week. Those are both big signposts for the economy, but the economy and the stock market do not always dance to the same beat. There are plenty of headwinds for stocks ahead even though we have enjoyed a three day rally.
#2 This is the most important story you'll read today
IRS Raises Contribution Limits for IRAs
Thanks to our ace Personal Finance Editor, Julia Kagan, for this. We've been waiting for this for a few weeks, and it is very good news for people saving for retirement. The IRS raised contribution limits for most retirement plans, which, for a lot of people, is the main way they save money and invest. It's automatic and some companies still match contributions to some extent. Call it forced savings, if you like, but you should be taking advantage of it if you can.
Here are the key takeaways:
You Got an IRA Raise
The annual contributions limit for traditional IRAs and Roth IRAs rose $500.
What you can contribute for 2019: $6,000.
What you could contribute for 2018: $5,500
You Can Give More to Tax-Advantaged Employer Retirement Plans
Annual contributions to your 401(k), 403(b), most 457 plans, Thrift Savings Plan also went up $500.
What you can contribute for 2019: $19,000
What you could contribute for 2018: $18,500.
Also, today marks the beginning of the open enrollment season. Here's a comprehensive read on all you need to know. #3 Apple earnings beat expectations but stock falls on iPhone sales
Apple reported its earnings for the quarter ended September 30, and it's been a mixed bag. The company beat Wall Street estimates on revenue and earnings per share reporting $62.9 billion and $2.91, respectively. However, the sales of its flagship iPhone are slowing down.
In an interview with Reuters, Apple CEO Tim Cook blamed this slowdown on emerging markets, forex costs and demand for new products. AAPL shares dropped close to 4% in after hours trading.
But every cloud has a silver lining, and even though it's not selling as many iPhones, Apple is making more money than ever on each phone it sells. The metric measuring that is average selling price, which for the past quarter ended up at $793, much higher than the street estimates of $750.8. That means iPhone loyalists are still spending big on more expensive iPhones.
Why it Matters: Apple weighs heavily on the overall market. It's the heaviest component of the S&P 500 at more than 4 percent, as we have noted, and it is the most widely held stock by technology ETFs and mutual funds. Like Amazon and Microsoft, it makes a big splash when it jumps in the pool. It's also one of the most popular consumer brands on the planet which gives it an immeasurable psychological advantage. Strong results like this should be a positive catalyst for the overall market but the uncertainty can hurt, both the stock and the markets. We'll see if it holds up.
What's Next: The holiday shopping season, of course. You don't really think that kicks off after Thanksgiving, do you? Apple has rolled out its new iPhones, 2 new iPads, a new Apple Watch and a new MacBook. Pre-sales and orders for those products are the canaries in the coalmine for consumer spending, electronic sales, microprocessors and thus tech stocks. Even though the outlook is bleak, if those are all robust, Apple's influence will certainly be felt across the markets.
Read More:
The Top 5 Apple Shareholders (AAPL)
Top 4 Mutual Fund Holders of Apple Chart of the Day: Trump tweet helps boost weak Chinese yuan As we noted above, a tweet from President Trump on Thursday morning may have helped lift some weight off China's heavily pressured currency. At 10:09 AM ET on Thursday, Trump tweeted that he "just had a long and very good conversation with President Xi Jinping of China ... with a heavy emphasis on Trade." This tweet came as a glimmer of hope amid deteriorating trade relations between the U.S. and China in recent months. As a result, the Chinese yuan, or renminbi (RMB), sharply extended its rise off what was near multi-year lows against the U.S. dollar. Thursday's move was the largest daily increase in value for the yuan against the dollar since late August. Granted, the dollar itself was substantially weaker overall on Thursday against most other major currencies, which helped account for some of the yuan's gains. But the Chinese currency's rise against the dollar after Trump's tweet was significantly more pronounced than other currency moves. Could potentially warming trade relations between the two largest economic superpowers lead to much further gains for the yuan? It's possible, but other fundamental factors pressuring the Chinese currency aside from U.S.-China trade relations are apt to continue weighing on the yuan, likely limiting much further upside in the near-term.  Enjoy the Market Sum? Share it with a friend. CONNECT WITH INVESTOPEDIA |
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