The markets started off the week sort of quiet but then got a boost from Washington as lawmakers reported that they may have a tentative deal to avoid Trump's 3 week deadline for shutting down the government. The S&P 500 9NYSE: SPY) responded quite favorably to this with a gain of 1.29% on Tuesday alone. Technical traders note the second attempt to regain the 200 day moving average.
The Nasdaq 100 (QQQ ) saw a similar reaction to the news. The QQQ pushed higher by 1.5% on Tuesday but was unable to get above it's 200 day moving average. For the year the QQQ is higher by about 10% but has yet to erase all of December losses just yet. Another 1.5% rally on the QQQ would do the trick.
Homebuilders (XHB ) stand out as a strong area of the market this week, especially on Tuesday when the XHB pushed confidently above the 200 day moving average. A 4% gain on the week already adds to the gains on the year. The XHB has officially erased all losses from October through December of last year.
Semiconductors (SMH ) are higher on the week led by a broad based rally in the sector. Thanks to positive trade news and a strong rally in Chinese markets Monday night the sector which relies heavily on global sales saw a strong gain on the day. Intel (INTC ) which is the largest holding in the group gets 80% of it's overall revenues from overseas while Texas Instruments (TXN ) has over 87% of revenues coming internationally. The SMH is now back above the 200 day moving average.
Oil (USO ) is higher this week as OPEC announced that Saudi Arabia would reduce oil production to about 9.8 million barrels per day in March. This represents a cut of more than a half a million barrels more than they initially agreed to cut. Technical traders note the price of oil is still within a range that has been mostly in place since last November, but trading above the 50 day moving average.