Market Up as Government Shutdown Averted, but FAANG Stocks Still Down
The government shutdown drama is over and the legal drama over who has the power of the public purse -- Congress or the President -- has just begun.
President Trump signed a bill to avoid another government shutdown and simultaneously declared a national emergency on the southern border to get funding for the wall. Democrat leaders promised to sue.
Good news for the market. The government deal and encouraging signs on the U.S./China trade talks sent stock prices sharply higher today. Large cap multinational companies surged, pushing the Dow index up 1.74 percent. The S&P 500 and Nasdaq indexes were up 1.09 and 0.61 percent respectively.
The Entrepreneur Index™ closed the day up 0.33 percent.
The technology sector lagged the broader market. All four FAANG stocks on the Entrepreneur Index™, (Facebook, Amazon, Netflix and Google -- now Alphabet), were down today. Amazon.com (-0.91 percent) fell the furthest.
NVIDIA Corp. had the biggest gain in the sector, rising 1.82 percent. The high-end chip-maker recently lowered guidance sharply but said in an analyst call yesterday that it expected sales to rebound in the second half of this year. The stock was up more than three percent in the morning but trended down through the day. It is up 18 percent this year but down 36 percent in the last twelve months.
Gains were strong across the rest of the market with just thirteen of sixty stocks on the Entrepreneur Index™ posting losses. Foodmakers Tyson Foods, (2.34 percent), and J.M. Smucker Company, (1.81 percent), were both up sharply. As were drug-makers Alexion Pharmaceuticals, (2.77 percent), and Regeneron Pharmaceuticals, (2.17 percent).
The two investment managers on the index both rose with the market. BlackRock gained 2.02 percent, while Franklin Resources was up 2.46 percent. Other financial stocks were also strong. Credit card issuer Capital One Financial was up 2.46 percent, and investment bank Jefferies Financial Group rose 3.29 percent -- the biggest gain on the Entrepreneur Index™ today.
Fedex Corp. had one of the bigger losses on the index. It fell sharply after competitor XPO Logistics missed earnings estimates badly today and blamed a drop in business with its biggest customer. That would be Amazon, which is rapidly building fleets of airplanes and vans to deliver its own packages. Fedex shares were down 2.51 percent and have fallen 27 percent in the last twelve months.
Under Armour Inc. was also punished by proxy when competitor Puma gave cautious guidance for 2019. The German shoemaker easily beat estimates but expected this year's sales to grow at just half the pace of 2018. Under Armour shares were down 3.07 percent, the biggest decline on the Entrepreneur Index™ today.
The Entrepreneur Index™ collects the top 60 publicly traded companies founded and run by entrepreneurs. The entrepreneurial spirit is a valuable asset for any business, and this index recognizes its importance, no matter how much a company has grown. These inspirational businesses can be tracked in real time on Entrepreneur.com.