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Oct. 16, 2019, 9:37 a.m. EDT

The S&P 500 may be ‘one decent day of gains’ away from a ‘breakout’

Critical information for the U.S. trading day

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By Steve Goldstein, MarketWatch


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Stocks could be on the verge of a breakout.

Tuesday’s 237-point advance in the Dow industrials could be dubbed the triple Johnson rally — as earnings (from Johnson & Johnson /zigman2/quotes/201724570/composite JNJ -0.77%  , among others) and report of Brexit progress (Boris) cheered traders.

Peter Schultz, author of the Winning Secret newsletter, looked at the market’s moves and says it’s time to turn bullish.

He says if the 3020 level on the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.20%   is broken to the upside — “one decent day of gains” — the index would confirm the breakout (when prices pass through an area of resistance). The S&P 500 closed Tuesday at 2,995.68.

He’s in an optimistic mood due to progress in China-U.S. trade talks, as well as expectations of a third rate cut in a row from the Fed at the end of the month. With expectations for earnings so low, the market could be in for some upside surprises, he adds.

The buzz

Beijing threatened to retaliate over the passage of measures in Washington aimed at supporting Hong Kong protesters, while pro-democracy lawmakers shouted down Hong Kong’s Carrie Lam.

The British pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0545% was volatile, trading on reports assessing the possibility of a Brexit pact being reached. Bank of America /zigman2/quotes/200894270/composite BAC -0.24%   reported third-quarter earnings that were ahead of forecast. After the close of trade, Netflix /zigman2/quotes/202353025/composite NFLX +0.90%  and IBM /zigman2/quotes/203856914/composite IBM -1.56%  will report results.

Tech Data /zigman2/quotes/209801225/composite TECD -0.16%  rose as the Financial Post reported Apollo Global Management approached the IT equipment distributor with an offer for close to $5 billion.

Retail sales fell 0.3% in September, the government reported, though August levels were upwardly revised. The Fed’s Beige Book collection of economic anecdotes coming in the afternoon.

Sen. Elizabeth Warren was the pinata during Tuesday night’s Democratic presidential debate. Warren’s ascendancy in polls has been weighing on a few sectors, notably health insurers.

The markets

U.S. stocks /zigman2/quotes/210598065/realtime DJIA +0.04%   opened slightly lower, and bond yields /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -0.36%  fell.

Asian stocks /zigman2/quotes/211618636/realtime XX:ADOW +0.25%  closed higher while European stocks /zigman2/quotes/210599654/delayed XX:SXXP -0.02%  sagged.

The chart

If one of the 12 Democrats on the debate stage on Tuesday night enters the Oval Office next year, expect the issue of carbon taxes to get back on the agenda. According to this fascinating chart from BNP Paribas, that’s what would be needed to get the U.S. to be more productive in an environmental sense. The U.S. doesn’t just have low carbon taxes (think, the super-cheap gasoline relative to the rest of the world), it’s among the least productive in carbon productivity, defined here as emissions per unit of GDP produced.

Random reads

A family “ waiting for the end of time ” for nine years was discovered by police.

Identical twin nurses delivered identical twin girls .

Sesame Street apparently has been mocking Donald Trump since 1988.

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/zigman2/quotes/201724570/composite
US : U.S.: NYSE
$ 131.98
-1.02 -0.77%
Volume: 4.37M
Nov. 11, 2019 6:30p
P/E Ratio
25.14
Dividend Yield
2.88%
Market Cap
$350.04 billion
Rev. per Employee
$603,509
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,087.01
-6.07 -0.20%
Volume: 1.41B
Nov. 11, 2019 5:04p
loading...
/zigman2/quotes/210561263/realtime/sampled
US : Tullett Prebon
1.2860
+0.0007 +0.0545%
Volume: 0.0000
Nov. 12, 2019 1:07a
loading...
/zigman2/quotes/200894270/composite
US : U.S.: NYSE
$ 33.18
-0.08 -0.24%
Volume: 27.79M
Nov. 11, 2019 6:30p
P/E Ratio
12.27
Dividend Yield
2.17%
Market Cap
$298.46 billion
Rev. per Employee
$543,289
loading...
/zigman2/quotes/202353025/composite
US : U.S.: Nasdaq
$ 294.18
+2.61 +0.90%
Volume: 3.95M
Nov. 11, 2019 4:00p
P/E Ratio
93.89
Dividend Yield
N/A
Market Cap
$128.93 billion
Rev. per Employee
$2.22M
loading...
/zigman2/quotes/203856914/composite
US : U.S.: NYSE
$ 135.47
-2.14 -1.56%
Volume: 2.57M
Nov. 11, 2019 6:30p
P/E Ratio
15.74
Dividend Yield
4.78%
Market Cap
$121.87 billion
Rev. per Employee
$208,845
loading...
/zigman2/quotes/209801225/composite
US : U.S.: Nasdaq
$ 124.30
-0.20 -0.16%
Volume: 144,580
Nov. 11, 2019 4:00p
P/E Ratio
12.79
Dividend Yield
N/A
Market Cap
$4.43 billion
Rev. per Employee
$2.66M
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,691.49
+10.25 +0.04%
Volume: 204.62M
Nov. 11, 2019 5:04p
loading...
/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
1.94
-0.0069 -0.36%
Volume: 0.00
Nov. 12, 2019 1:03a
loading...
/zigman2/quotes/211618636/realtime
XX : Dow Jones Indices
3,356.54
+8.27 +0.25%
Volume: 0.00
Nov. 12, 2019 1:07a
loading...
/zigman2/quotes/210599654/delayed
XX : STOXX
405.34
-0.08 -0.02%
Volume: 0.00
Nov. 11, 2019 5:50p
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Steve Goldstein is MarketWatch markets editor for Europe. Follow him on Twitter: @MKTWgoldstein.

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