JPM and BAC Rose Due to the Likelihood of a Rate Hike



Sector performances

All of the component sectors of the SPDR S&P 500 ETF (SPY) ended in the positive territory on Wednesday, November 18. It’s important to note that 472 stocks out SPY’s 502 constituent stocks rose on the day.

The above graph shows the performances of SPY’s component sectors in percentage form.

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Healthcare sector led SPY

The healthcare sector rose on Wednesday. The Health Care Select Sector SPDR ETF (XLV) rose almost 2.0%. The stocks of Allergan (AGN), Biogen (BIIB), Celgene (CELG), and Vertex Pharmaceuticals (VRTX) rose 4.5%, 4.5%, 4.2%, and 3.9%, respectively, on the day.

Valeant Pharmaceuticals (VRX) rose 3.2% on November 18. The company will probably offer cash and stock incentives to retain its key employees. Around 70 employees below the executive level will be rewarded with these incentives. Since Valeant Pharmaceuticals’ stock prices fell after Citron Research’s allegations on Valeant’s sales accounting and reporting practices, these incentives are going to include a cash amount.

The healthcare sector was followed by the material and the financial sector. Metals’ price movement was mixed on November 18. The rise in gold and steel was represented by the SPDR Gold Trust (GLD) and the Arca Steel Index (^STEEL), respectively. The gain was 0.09% and 3.9%, respectively, on the day. Silver and copper commodities fell on the day. In contrast, there was a rise in the miners’ ETFs. All of the metals boosted the mining stocks.

The stocks of banks and financial institutions generally rise when there’s a rise in the interest rates. As a result, the finance sector rose 1.8% on November 18. The likelihood rose that the Fed will increase the short-term interest rates in December 2015. Therefore, the stocks of JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), and Goldman Sachs (GS) rose 2.0%, 2.4%, 2.8%, and 1.6%, respectively, on the day.

Next, we’ll look at the key stocks in the US stock market on November 18.


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