The stock market continues to climb higher following Wednesday’s economic data and budget agreement reached in Washington D.C.
Tech stocks began trading higher today, leading the gains in the stock market. Cisco Systems, Inc. (NASDAQ: CSCO ) rose by nearly 1.4%, Oracle Corporation (NYSE: ORCL ) and Xilinx, Inc. (NASDAQ: XLNX ) moved slightly higher, while the others saw slight declines. Netflix, Inc. (NASDAQ: NFLX ) rose about 2%, and Advanced Micro Devices, Inc. (NASDAQ: AMD ) also moved higher by about 2%.
These gains followed yesterday’s economic data that saw the number of new jobless claims increased by nearly 7% and the claims for initial jobless claims fell by nearly 6%. The release of this data raised concerns that the U.S. economy could be seeing some slowing down, which could be the reason that today’s gains by tech stocks.
Another positive for today’s tech sector ETFs are the latest budget agreement announced by the government on Wednesday. It was reported that the agreement includes an increase in the budget that will keep the government funded until September 30th. The agreement also included some $300 billion to be spent on defense and $165 billion to be spent on non-defense areas.
Aside from all of that, the budget agreement contained some big provisions for increasing military spending. Other provisions raised the statutory limits on military and non-military spending, as well as the debt ceiling.
Financials and Health Care ETFs Moving Higher Today
Although there is strength in the technology sector ETFs today, there is a relative weakness in the financial sector ETFs, which are falling more than the tech sector ETFs in the past hour. The Financial Select Sector SPDR Fund (NYSEARCA: XLF ) and the SPDR S&P Regional Banking ETF (NYSEARCA: KRE ) both slid about 2% in the past hour.
Health Care ETFs (XLV, KRE) continuing to gain today.
One of the reasons why the markets may be getting a little bit worried that the economy is slowing down is due to the decline in jobless claims. Investors are starting to wonder if the government is worried that the economy may be slowing down.
Another reason why the health care sector ETFs are rising today is the discussion about “eliminating barriers to patients buying drugs from mail-order pharmacy operators like Amazon.com, Inc. (NASDAQ: AMZN ).” Several reports had suggested that the government had formed an antitrust division to look into the company’s market presence, and the government may look to push for allowing patients to receive some of the cost paid for by their insurance carrier.
Another thing that could be driving that position by the government? The government might decide that Amazon has more to gain from the removal of barriers than it does, because it would mean lower costs for Amazon’s main customer: the federal government.
ETF Investors Should See What The Market Has To Offer
We believe it is important for investors to keep an eye on what is happening today in order to gauge what the market has to offer, whether or not things are still heading higher, or whether they are falling back.
We have said that the investor must keep a watchful eye on what the market is doing when it takes advantage of market opportunities, and when it takes away market opportunities. We believe that the most important rule in investing is finding those opportunities, rather than jumping into the dips. This is why we recommend that people that wish to give investing a try must realize the importance of being able to “test the waters” – i.e. keeping a certain amount of money in the market over a certain time period.
We believe that the best way to assess today’s situation is by seeing what the market has to offer, both positive and negative. This should help investors make smart decisions on what trading to do.