Barron’s associate editor Andrew Bary, who writes Barron’s annual list of the best stock picks in the coming year, explains why he thinks these investments will outperform in 2020.
The major U.S. averages opened near record highs on Monday morning as investors continued to digest last week’s two historic trade deals.
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The Dow Jones Industrial Average was up 0.5 percent, or 150 points in the opening minutes of trading, while the S&P 500 and Nasdaq were both higher by 0.7 percent.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 28296.7 | +161.32 | +0.57% |
| SP500 | S&P 500 | 3190.29 | +21.49 | +0.68% |
| I:COMP | NASDAQ COMPOSITE INDEX | 8808.339635 | +73.46 | +0.84% |
Wall Street ended last week with small gains to record highs for the benchmark S&P 500 index and the Nasdaq composite index as traders celebrated the first phase of a trade deal between the U.S and China and House Democrats backing the United States-Mexico-Canada Agreement, which rewrites the Clinton-era North American Free Trade Agreement.
STOCK MARKET ‘MELT-UP’ COMING SOON: BANK OF AMERICA
Markets were gaining Monday despite changes in the language of the original USMCA agreement which centered around enforcement and would allow foreign labor inspectors to operate in Mexico, something opposed by the Mexican government.
Apple and Microsoft, the two biggest U.S. companies by market capitalization, opened at record highs on Monday.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAPL | APPLE INC. | 278.11 | +2.96 | +1.08% |
| MSFT | MICROSOFT CORP. | 155.63 | +1.10 | +0.71% |
Boeing shares were under pressure, weighing on the Dow, after The Wall Street Journal reported the planemaker could cut back or even halt production of the 737 Max as it waits for regulatory approval to return to the skies. Executives had hoped a return to service could happen in January, but that is looking increasingly unlikely.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BA | BOEING COMPANY | 332.33 | -9.34 | -2.73% |
Meanwhile, shares of DuPont and International Flavors & Fragrances were on the move after announcing plans for the latter to merge with the former’s nutrition and biosciences business. The deal, which when approved will create a consumer giant valued at more than $54 billion, gives DuPont shareholders a 55.4 percent stake in the new company.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DD | DUPONT DE NEMOURS | 65.38 | +0.58 | +0.90% |
| IFF | INTERNATIONAL FLAVORS & FRAGANCES INC. | 125.75 | -8.23 | -6.14% |
Pacific Gas and Electric was sharply lower after California Gov. Gavin Newsom rejected the utility’s plan to emerge from bankruptcy.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PCG | PG & E CORP. | 9.54 | -1.70 | -15.13% |
Commodities held small gains with gold up 0.1 percent at $1,482 an ounce and West Texas Intermediate crude oil higher by 0.1 percent at $60.05 a barrel.
U.S. Treasurys were lower with the yield on the 10-year note up 3.6 basis points at 1.857 percent.
In Europe, Britain’s FTSE spiked 2.5 percent after Prime Minister Boris Johnson said he wanted a Brexit vote to happen before Christmas. Elsewhere, France’s CAC was higher by 1.1 percent and Germany’s DAX gained 0.7 percent.
Overnight, China reported unexpectedly strong November factory activity and spending. Industrial production rose 6.2 percent from a year earlier, up from the previous month’s 4.7 percent. Retail sales growth rose to a five-month high of 8 percent from October’s 7.2 percent.
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The major averages in Asia were flat to lower with China’s Shanghai Composite and Japan’s Nikkei little changed while Hong Kong’s Hang Seng fell 0.4 percent.
