US stocks started last week trading lower as investors were jittery over the tensions in the Middle East. However, as the prospect of an open military conflict with Iran was dimmed by President Trump’s comments, markets managed to recover and even the mixed jobs report did not prevent the main indexes from closing higher. The NASDAQ Composite advanced by 1.18%, with many tech stocks that are part of the index gaining ground amid reports that Chinese Vice Premier Liu He will travel to Washington this week to sign a phase-one trade agreement. The Dow Jones Industrial Average inched up by 0.42% and even managed to briefly touch the 29,000 marks for the first time in history. The S&P 500 appreciated by 0.59%.
Investor sentiment was mainly driven by the ongoing Iran-US conflict for most of the last week with some investors moving towards safe havens such as gold, oil and defense stocks. On Tuesday, Iran fired 15 ballistic missiles at military bases in Iraq housing US and coalition forces, although no casualties on the American or Iraqi side were reported. The following day, President Trump addressed the nation and said that the US will pursue further economic sanctions against Iran instead of escalating military conflict. Trump’s comments managed to soothe investors and helped move stocks higher.
In addition, there were two jobs reports last week. On Wednesday, the December ADP jobs report showed a gain of 202,000 jobs, higher than the consensus estimate of 157,000 and the previous month’s print of 124,000. This was the largest gain in eight months. However, nonfarm payroll data was less positive, showing a gain of just 145,000 jobs versus expectations of 164,000 and a November figure of 256,000. The unemployment rate of 3.5% was in line with estimates and the average hourly earnings growth of 2.9% on the year was lower than the consensus of 3.1%.
As tech stocks were among the biggest gainers last week, Financial Advisors focused on them, according to data from TrackStar, InvestingChannel’s official newsletter capturing and analyzing the trends of Financial Advisors. Out of 10 most searched tickers among Financial Advisors last week, eight were tech companies.
On the first spot in TrackStar’s list is Tesla Inc. (NASDAQ: TSLA). The company keeps getting thumbs up from the sell-side over its actions in China. Last week, the electric vehicle maker announced the start of its Model Y program in China. Tesla will also open an engineering center and will work on developing a future car for the global market. Amid these announcements and the overall positive sentiment towards the stock, Tesla’s market cap topped $80.81 billion, the highest ever value for a US automaker. In addition, two analysts hiked their price targets on the stock. Piper Sandler raised the price to $553 from $423 and Argus raised its target to $556 from $396, both citing strong demand and growth potential in China. Credit Suisse also lifted its price target to $340 from $200 but maintained an ‘Underperform’ rating.
Tesla was followed by Apple Inc (NASDAQ: AAPL), Advanced Micro Devices, Inc. (NASDAQ: AMD) and Amazon.com, Inc. (NASDAQ: AMZN). Apple last week said that it had record App Store sales of $1.42 billion between Christmas Eve and New Year’s Eve, a growth of 16% over the year. Advanced Micro Devices unveiled a new 64-core, 128 thread Threadripper 3990X processor and a line of Ryzen 400 “Renoir” APUs.
The fifth spot in TrackStar’s list was taken by Boeing Co (NYSE: BA). The company made headlines last week over a string of events. On Sunday, the company said it was reviewing a wiring issue that could potentially affect the grounded 737 MAX jetliners and reports suggested that FAA could demand extra flight simulator training for 737 MAX pilots. On the following day, the WSJ reported that the company might consider raising more debt to deal with the escalating costs from the 737 MAX crisis. Boeing could also cut its expenditures to save some cash, the report suggested.
On Wednesday, a Boeing passenger plane operated by Ukraine International Airline crashed right after take-off in Tehran, killing all 176 people on board. The crash was initially blamed on technical problems and sent Boeing’s stock lower. However, the trajectory changed after-later confirmed reports that the airliner was actually downed by a missile launched by Iranian forces.
Last but not least, on Friday, a string of documents was released by Boeing to Congress. The documents and emails showed that the company went to great lengths to avoid scrutiny from regulators and other involved parties related to the 737 MAX. One particular quote from a pilot in an email said: “This airplane is designed by clowns, who in turn are supervised by monkeys.” Also on Friday, the FAA proposed a $5.4 million fine for Boeing over defective wing parts installed on 737 MAX.