Commenting on today’s trading focusing on the consumer goods sector and Disney plus launch, Gorilla Trades strategist Ken Berman said:
While stocks saw a brief spike lower this afternoon in the quiet environment, investors shrugged off the overnight weakness and stocks proved their resilience yet again. Trading activity and volatility picked up somewhat today, but despite the mixed catalysts and the weakness among small-caps, the Dow even hit a record high in the afternoon.
The major indices were little changed for the fifth day in a row, as despite the mixed trade-related headlines and another clash on interest rates between the President and the Fed, the bullish consolidation continues on Wall Street. The Dow was up 91, or 0.3%, to 27,783, the Nasdaq lost 4, or 0.1%, to 8,482, while the S&P 500 rose by 2, or 0.1%, to 3,094. Decliners outnumbered advancing issues by an almost 3-to-2 ratio on the NYSE, where volume was slightly below average.
The defensive healthcare and utilities As Treasury yields pulled back and the main overseas indices lost. The rebound in the Consumer Price Index (CPI) and the positive launch of the Disney+ platform boosted the consumer goods sector, while services, financials, and materials edged lower, but the majority of stocks traded in tight ranges, and there has been no change in the bullish technicals. That said, while the relative lull with regards to the sectors continued, there was plenty of action at the level of individual stocks.
Consumer goods sector in focus amid Disney news
The shares of Amazon (AMZN) got hit in the wake of the news that Nike (NKE) won't sell its products directly through the most popular e-commerce platform. The decision, which came just ahead of the crucial holiday season could hurt the online giant, especially should other major brands follow Nike's lead. The stock has been struggling to get back to its all-time high from July, despite the broad rally to record highs in recent weeks, due to the global economic slowdown together with the increasing regulatory scrutiny.
Nike’s shares rose together with the consumer goods sector, but the biggest large-cap winner of the session was definitely Disney (DIS). The overwhelmingly positive reception of the firm’s Disney+ streaming services propelled the stock more than 7% higher, to a new all-time high, while the shares of the platform’s biggest rival, Netflix (NFLX) fell by 3%. According to the early reports, Disney+ already sports around 10 million subscribers, compared to the prior estimates of 8 million users by the end of the year, so the ‘streaming war’ is clearly heating up.
We will have another busy day of economic releases and inflation will continue to be the main focus. Just like in the case of today's CPI the Producer Price Index (PPI) is also expected to bounce back compared to last month’s very low reading. Both the headline and the core PPI printed at -0.3% in October, but analysts forecast positive readings this time. We will already get a slew of key indicators overnight, such as the Chinese industrial production and retail sales reports and the German quarterly GDP print, so traders could be in for an active pre-market session. Stay tuned!