Market Brief: DJIA Rallies for Seventh Straight Day, Longest Streak in Over a Year
Matt Weller, CFA, CMT September 12, 2019 4:26 PM
- In its highly-anticipated monetary policy meeting, the ECB cut deposit rates by 10bps to -0.5%, reintroduced QE (with no end date!), and introduced a tiering system for banks – see our initial review of the decision. The central bank also cut growth and inflation forecasts.
- FX: After an initial drop, the euro rallied back to become the strongest major currency on the day in a classic “sell the rumor, buy the news” dynamic around the ECB. The Japanese yen was the weakest major currency.
- Optimism about a possible interim US-China trade deal to delay tariffs boosted risk appetite (though that rumor was subsequently denied by a White House spokesperson)
- US data: August CPI came in softer than expected at 1.7% y/y vs. 1.8% eyed, while initial jobless claims met expectations at 204k.
- Commodities: Gold ticked higher while Oil shed over 1% on the day.
- US indices traded higher across the board, marking the seventh straight rally for the Dow Jones Industrial average. This is the longest winning streak since last May.
- Financials (XLF) were the strongest sector while Energy (XLE) was the weakest, hurt by the drop in oil prices.
- Stocks on the move:
- Oracle (ORCL) gained 1% after co-CEO Mark Hurd announced he would take a leave of absence for health reasons.
- Car rental firm Hertz Global Holdings (HTZ) gained 20% after billionaire investor Carl Icahn increased his stake in the company above 30%.
- New IPO SmileDirectClub dropped -28% in its first day of trading.
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