MarketWatch: Stock market struggles for traction, but weekly gains in sight

Friday, March 17, 2017

U.S. stocks were moving in and out of positive territory on Friday and poised for weekly gains as investors monitored a meeting of Group of 20 finance ministers in Germany, which could provide some insight into important geopolitical issues.

Investors are also watching for news from the meeting in Washington, D.C. between President Donald Trump and German Chancellor Angela Merkel, postponed from earlier in the week.

Equities have been in an uptrend of late. Both the S&P and the Nasdaq are set to post their seventh weekly gain of the past eight weeks, while the Dow is on pace for its fifth weekly advance of the past six weeks.

Index losses Friday were primarily due to the financial sector XLF, -0.53% which dropped 0.7%. Goldman Sachs Group Inc. GS, -1.41%  lost 1.3% and J.P. Morgan Chase & Co. JPM, -0.64%  was off 0.6%.

“The market is in a tight trading range and it’s fairly quiet. That said, the 10-year yield ticked down a bit to below 2.50 and the financials are down while utilities, a bond surrogate is up,” said Quincy Krosby, market strategist at Prudential Financial.

The 10-year Treasury yield TMUBMUSD10Y, -1.67%  fell to 2.495% on Friday.

Finance ministers from industrialized and emerging-market economies are gathering in Baden-Baden for a G-20 meeting, the first for Treasury Secretary Steven Mnuchin. The finance chief is expected put pressure on other countries to boost the value of their currencies, given Trump’s push for a weaker dollar, while the Trump administration’s protectionist policies are also a focus.

Read: Trump’s dollar paradox could fuel trade tensions at G-20

“This is the first time that global leaders are interacting with the Trump administration on a large scale, and you have to expect the market will be quiet ahead of a major question mark like that,” said Adam Sarhan, chief executive officer at 50 Park Investments.

“So far Trump has gotten the benefit of the doubt from foreign leaders, so there’s a high likelihood that we come out of this with a positive framework, but there’s no question that we’re in a period with lofty valuations and stretched positive sentiment,” he said. “The cards are shaping up for a climatic run marked by panic buying, rather than panic selling, which is a sign you’re in the late stage of a bull market.”

Germany is one of the countries seen by Trump as having an unfair trade advantage. The country’s leader, Merkel, is scheduled to visit Trump in the White House Friday, in a meeting postponed from earlier in the week due to the East Coast snowstorm. Russia and immigration, as well as trade, are seen as likely topics on the agenda.

In the latest economic data, industrial production was flat in February, below expectations for a rise of 0.3%. Separately, the index of consumer sentiment rose to 97.6 in March from 96.3 in February, based on a preliminary reading by the University Michigan. This was slightly below the reading of 98 that had been expected.

The Conference Board said its leading economic index rose 0.6% in February — the third straight gain of that magnitude — to reach its highest level in more than a decade.

Trading on Friday could be more volatile than usual due to so-called quadruple witching, as stock-index futures, stock-index options, stock options and individual stock futures all expire on the same day.

Stock movers: Shares of Adobe Systems Inc. ADBE, +4.39%  jumped 4.9% after the software company late Thursday reported better-than-expected quarterly profit and sales.

High-end jeweler Tiffany & Co. TIF, +3.49% rose 3.1% after it reported better-than-expected earnings and gave an upbeat outlook.

Other markets: Asian stock markets closed higher, with the exception of Japan’s Nikkei, ahead of the G-20 meeting while European stocks were also higher.

Crude oil CLJ7, +0.04%  was flat while gold GCZ7, +0.19%  edged up.

Link:

http://www.marketwatch.com/story/us-stocks-set-to-trim-weekly-gain-as-g-20-summit-kicks-off-2017-03-17

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