Markets were heading higher as the S&P 500 surpassed the 2,000 mark for the first time in history. The index was up 0.7% to a record 2,001.24 a little before 11:00 a.m. Joe Bell, senior equity analyst at Schaeffer’s Investment Research Inc., said, “This number 2,000 is a pretty significant number from a psychological and financial points. We’re seeing the continuation of a strong momentum that occurred in July.” The index has gained nearly 100 points since August 7. Kate Warne, an investment strategist with Edward Jones, said that she believes Janet Yellen’s speech on Friday played into the jump. Warne said that Monday’s rally is “a delayed reaction from the Jackson Hole meeting. There was no surprise suggesting that U.S. (monetary) policy would tight sooner, which is something people had been concerned about.”
Sales of homes in the U.S. dropped last month. The Commerce Department announced that there was a decline of 2.4% in home sales to an annual adjusted rate of 412,000 units, a level not seen since March. Economists had been projecting new home sales to come in around 430,000. When compared with last year, sales are 1.8% lower. They revised June’s reading from the original 8.1% decline to show a 7% drop. Thomas Simons, an economist at Jefferies, said, “It’s a little disappointing. The new-home sales data have no traction whatsoever and doesn’t seem to be gaining at all.”
Shares of Burger King Worldwide Inc (BKW) rallied over 19% after the company announced it was in talks to buy Tim Horton’s (THI) in an effort to lower their tax bill. In turn, Pershing Square Capital Management LP’s stake in the company increased by about $171 million on the jump. Bill Ackman’s management company owns about 10.9% stake in the fast food giant. Ackman helped the company go public in 2012 after merging with Justice Holdings.
That’s all for today,
Warren Gates, Normandy Research