The Nasdaq hit a record high on Tuesday, its first since early June as Wall Street drove up Netflix and other tech stocks.
The milestone means the Nasdaq has completely recovered from a momentum-driven selloff that began last month. In fact, the Nasdaq is now up a very strong 18 percent this year, nearly doubling the other major indexes.
Greed has been very good to the Nasdaq this year. The index has hit 39 different record highs in 2017, and 47 since President Trump’s election. Netflix was front in center of the latest tech rally, spiking nearly 14 percent to a record high thanks to strong subscriber growth.
Facebook, Apple and Google parent Alphabet, the other three members of the “FANG” club of tech darlings, also advanced on Tuesday.
The Nasdaq’s record shows how the stock market is mostly shrugging off the latest drama in D.C. The S&P 500 narrowly notched an all-time high of its own on Tuesday, while the Dow Jones Industrial Average was lower due in part to Goldman Sachs earnings report released on Tuesday.
Clearly, the collapse of the Senate GOP’s bill to repeal and replace Obamacare has not played a major negative role on the Street. The health care sector of the S&P 500 managed to eke out a minor gain on Tuesday. Many on the Street hope the health care failure will force the White House and Congress to quickly pivot to taxes, although that is no easy task.
The question is whether the Trump rally keep going despite the turbulence in Washington? With the fate of the Trump economic agenda in doubt, the key will be whether corporations will continue to increase their earnings.
Oil Up – Demand Absorbs Some Supply
Oil prices rose on Tuesday as demand soaked up some of the surplus supplies from OPEC and the United States. Nonetheless, the market remained in a tight range and showed few signs of big short-term moves.
Benchmark Brent crude was up 70 cents at $49.12 a barrel, while domestic light crude was 65 cents higher at $46.67.
In a sign of strong demand, data on Monday showed refineries in China increased crude throughput in June to the second highest on record.
However, many markets are well supplied and oil for prompt delivery is trading at heavy discounts to forward futures in several parts of the world. As a result, crude oil prices are trading at only around half the levels seen three years ago.
A deal by OPEC with Russia and other non-OPEC producers to cut supplies by around 1.8 million barrels per day (bpd) between January this year and March 2018 has so far failed to tighten the market or push up prices.
Although many OPEC countries have restricted production, others including Nigeria and Libya have been allowed to increase output. Ecuador, a small producer within OPEC, said it was not cutting its production by 26,000 bpd as agreed due to the country’s fiscal deficit.
Oil Minister Carlos Perez said Ecuador was cutting only 60 percent of that figure, putting current output at 545,000 bpd.
U.S. oil production is also rising steadily. The Energy Department said in a report domestic shale oil output was likely to rise for the eighth consecutive month in August, climbing 112,000 bpd to 5.585 million bpd.
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