Stocks bolted higher thanks to positive trade vibes, earnings and the prospect that Uncle Sugar will lower interest rates this week. The Dow closed at 27,090 up 132 points on heavier trading volume. Meanwhile the S&P 500 Index hit an all-time high as tech stocks did well. What is interesting about markets is that they are trading at or near highs in the face of a mountain of fear and skepticism which conversely tends to be a healthy sign. It’s usually when markets are up and there is no fear that investors need to be fearful.
Later this week the Federal Reserve, led by the intrepid Chairman Jerome Powell will meet to discuss rate policy and the gurus are betting they will lower interest rates for the third time this year. After raising rates 4 times last year and now reversing course one wonders what data they are looking at. Some gurus like Brian “Mr. Sunshine” Wesbury at First Trust do not see the need for a rate cut since the US consumer is happier than a fat rat in a potato bin while others think the trade war is hurting business and coupled with the EU having lowered rates into negative territory we must lower rates to remain competitive.
AT&T reported earnings which were better than expected sending shares to a 52-week high. The company posted a 3% revenue decline and an increase in net income of 4%. Ma Bell benefitted from the “Joker” movie which became the number one R rated movie of all time. I have not seen the movie but someone said it is about one man’s decent into madness which is a plot that apparently sells well in theaters.
CEO Satya Nadella at Microsoft is “Danciin at the WaWa” as Microsoft beat out Amazon, IBM, Oracle and others for a $10 billion 10-year contract to provide cloud services to the Pentagon as the federal gubment works to bring the defense department’s computer network into the modern age. The news came out after the close on Friday and shares of Micropoopie hit an all-time high today as a result. There is a rumor that Amazon will contest the deal but for now this is a big win for Azure.