After a deal on the debt ceiling and some good earnings, stocks opened strongly Tuesday morning only to be greeted by some quick selling and little positive momentum. The market continued to bounce around for a few hours until 1:45 p.m. ET when a headline hit that Treasury Secretary Mnuchin and U.S. Trade Representative Lighthizer were traveling to Beijing on Monday to resume trade talks.
While this news was reported in the Chinese press this morning it was a perfect headline to trigger buying by computer algorithms. That pushed the indices to the highs of the day and helped to enable some short squeeze action to keep stocks running the rest of the day. We ended up with a strong close on good breadth. Volume was lackluster again but this is a market that finds ways to work its way higher on very limited energy.
More earnings reports are rolling in after hours and Texas Instruments (TXN) is lighting it up with a solid report and good guidance. The chip sector has been leading lately and this will help to keep it going.
In addition to chip stocks, banks and financials showed good relative strength and Apple (AAPL) continued to do some heavy lifting.
Snap (SNAP) has had a slew of positive comments from analysts recently and is moving up nicely after the close on its earnings results. The good news was expected and so far it is being chased.
Earnings season continues to be upbeat and there are no signs of the economic weakness the bears were looking for. We still have plenty of quarterly reports to come but the news has been so far. Even the stodgy Coca-Cola (KO) is moving like a growth name.
Have a good evening. I'll see you Wednesday.
