Markets Remain Calm

Market Moves

Major market indexes extended their streak of relatively calm trading days. For the tenth straight trading day, the S&P 500 (SPX), the Nasdaq 100 (NDX), and the Dow Jones Industrial Average (DJX) all exhibited a downtrend in their average true range. This is typically a bullish signal.

During this quiet period, however, investors have begun to show signs of mildly increasing risk appetite. As a result, mid-cap stocks have shown slightly better performance compared to the indexes filled with more blue-chip stocks. The chart below shows that the slight lead of the mid-cap index, as tracked by the State Street Global Advisors' SPDR S&P MidCap 400 ETF (MDY), is enough to confirm the bullish signal given by the calmer trading ranges.

Chart showing risk appetite among investors

Crude Oil Demand Reverses Inventory Trend

Each week, the report that publishes the current level of inventory for crude oil is watched closely by energy traders. Today's edition of that report showed some interesting developments. Inventory fell significantly last week, showing a decrease of 1.7 million barrels. This came as a surprise to forecasters who had estimated an increase of 2.5 million barrels this week, in keeping with the trend of rising inventories over the past six weeks.

This news also came hand-in-hand with the information that production had also increased this week. So, despite more oil produced and a backlog of inventory, energy consumers had such a spike in demand that it created the surprise outcome. This news may have repercussions for energy-sensitive industries in the near future.

Chart showing the performance of crude oil prices

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This Company Keeps on Trucking

Despite the jump in demand for oil and gasoline, trucking company Old Dominion Freight Line, Inc. (ODFL) is on for a good earnings report tomorrow. The generally downward trend of fuel prices over the past several weeks will surely help the company's bottom line. The stock has outperformed the Dow Jones Transportation index, tracked by the iShares Transportation Average ETF (IYT), and is up more than 50% so far in 2019. 

Chart showing the share price performance of Old Dominion Freight Line, Inc. (ODFL)

The Bottom Line

Stocks closed within a smaller range than average, and this has mostly been the case for the past two weeks of trading. This portends well for those hoping for higher market prices. Oil prices jumped on increased demand, which implies a continued rise in consumer sentiment. One stock likely to benefit from all this is Old Dominion Freight Line, which reports earnings tomorrow.

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