From Briefing.com: 4:10 pm : The stock market endured a choppy start to the week, but the S&P 500 (-0.1%) finished its day little changed. Equity markets exhibited a slight degree of caution as participants ruminated over recent commentary from central bankers and looked ahead to the Kansas City Fed's Economic Symposium in Jackson Hole, Wyoming. Fed Chair Janet Yellen is slated to speak Friday at 10:00 ET.
Fed Vice Chair Fischer struck a somewhat hawkish tone over the weekend when he stated that the U.S. economy is close to hitting employment and inflation targets. The upbeat view on the U.S. economy had some participants question whether Mr. Fischer would advocate for at least one fed funds rate hike before the end of the year. The implied probability of a rate hike at the September meeting, as measured by the fed funds futures market, rose to 18.0% from 12.0% on Friday. The odds of a rate hike at the December meeting increased to 53.5% from 46.2%.
The prospect of a policy divergence trade was entertained overnight when Bank of Japan Governor Haruhiko Kuroda talked up the potential for the central bank to cut interest rates further into negative territory. However, that view appears to have been slightly discounted throughout the session. The dollar/yen pair ended higher by 0.1% (100.31) after jumping to the 100.90 level overnight.
The S&P 500 (-0.1%) maintained a narrow ten-point trading range after falling to its 20-day simple moving average (2176.51) at the start of the session. Other focal points impacting today's trade included a downturn in crude oil futures and sector leadership from the heavily-weighted health care (+0.1%) space. Six sectors ended in the red with commodity-sensitive energy (-0.9%) rounding out the leaderboard. Conversely, defensively-oriented consumer staples (+0.1%) health care (+0.1%), and utilities (+0.3%) outperformed.
Biotechnology demonstrated relative strength in the health care sector, evidenced by the 2.0% gain in the iShares Nasdaq Biotechnology ETF (IBB 296.01, +5.70). The group moved higher after Medivation (MDVN 80.42, +13.26) agreed to be acquired by Pfizer (PFE 34.84, -0.14) for $81.50 per share in cash. Separately, Valeant Pharmaceuticals (VRX 31.27, +2.53) spiked 8.8% after announcing that Paul Herendeen would assume the role of Chief Financial Officer. Conversely, Dow component Johnson & Johnson (JNJ 119.13, -0.79) ended lower by 0.7%.
The influential technology sector (-0.1%) finished in-line with the broader market as top-weighted Apple (AAPL 108.51, -0.81) weighed. The stock declined 0.8%, trimming its post-earnings rally to 12.3%. Fellow large cap Facebook (FB 124.15, +0.59) jumped 0.5% after receiving positive commentary in Barron's. Separately, Intersil (ISIL 18.74, +3.10) outperformed among chipmakers after reports indicated that Renesas Electronics interested in acquiring the company.
The Dow Jones Transportation Average (-0.5%) ended behind the benchmark index as airlines underperformed. American Airlines (AAL 36.00, -0.49) weighed on the sub-group, declining 1.3%.
WTI crude finished the day lower by 3.4% ($47.42/bbl; -$1.65) amid concerns regarding the extent of the recent oil rally. The energy component was also under pressure after it was reported that Iraq is preparing to increase its oil exports by approximately 150,000 barrels per day.
Relative strength among long-dated Treasuries led to some flattening in the yield curve. The yield on the 30-yr bond slipped five basis points (2.24%) while the yield on the benchmark 10-yr note fell four basis points (1.54%).
Today's participation was below the recent average as fewer than 685 million shares changed hands at the NYSE floor.
There was no economic data of note released today.
Tomorrow's economic data will be limited to the New Home Sales Report for July (Briefing.com consensus 580k), which will be released at 10:00 ET.DJ30 -23.15 NASDAQ +6.22 SP500 -1.23 NASDAQ Adv/Vol/Dec 1553/1.445 bln/1338 NYSE Adv/Vol/Dec 1488/684.2 mln/1461
3:30 pm :
Commodities, as measured by the Bloomberg Commodity Index, were -0.7% around the 85.67 level
Crude oil snapped its 7-day streak, closed near session lows ahead of tomorrow's API data
October crude oil futures fell $1.65 (-3.4%) to $47.42/barrel
The next OPEC meeting is in Algeria from Sept 26-28
API data will be released tomorrow at 4:30 am ET
EIA petroleum data will be released Wed at 10:30 am ET
Contributing factors weighing on crude include:
Reports that Iraq is increasing oil exports by around 150K barrels per day (+5%) as a pipeline dispute is being resolved
Increased exports out of China
Cautious analyst comments out of Barclays downplaying the 25% rally during the first several weeks of Aug
Short-covering, which was a factor behind the gains earlier this month, may be getting exhausted following the 20%+ increase
Friday's rig count data which showed that the total U.S. rig count was up 10 to 491 rigs following last week's increase of 17 rigs
200-300K barrels of oil are expected to come back online in Libya near-term
"Shoulder season" has begun as refineries undergo seasonal maintenance between Aug & Oct, demand is expected to drop
Natural gas erased all of the previous session's losses, closed at fresh session highs
September natural gas closed $0.10 higher (+3.9%) at $2.68/MMBtu
EIA natural gas data will be released Thursday at 10:30 am ET
In precious metals, gold & silver extended Friday's losses, silver doubled last session's decline
December gold ended today's session down $2.80 (-0.2%) to $1343.40/oz
September silver closed today's session $0.47 lower (-2.4%) at $18.85/oz
Base metal copper slid notably lower in afternoon pit trading
September copper closed $0.03 lower (-1.4%) at $2.14/lb
Equity indices began the day on a lower note as investors responded to recent remarks from central bank officials. Bank of Japan Governor Haruhiko Kuroda struck an accommodative tone overnight, indicating that the central bank has room to take rates further into negative territory. Recall that the central bank underwhelmed with its policy statement on July 29. The BoJ expanded its ETF purchase program and increased its dollar lending program, but steered away from more aggressive easing measures.
On the home front, Fed Vice Chair Stanley Fischer stated over the weekend that the U.S. economy is close to hitting its employment and inflation targets. Investors inferred that Mr. Fischer's upbeat read on the U.S. economy indicated that the Vice Chair favors hiking the fed funds rate at least one more time before the end of the year. Investors will hear from Fed Chair Janet Yellen later in the week. Ms. Yellen will speak at the Kansas City Fed's Economic Symposium in Jackson Hole on Friday at 10:00 ET.
As the week began, trading held onto a modestly split (and relatively tepid volume) session. Leading the higher move, the Nasdaq Composite added 6.23 points (+0.12%) to 5244.60. Helping outperform, Nasdaq 100 components INCY +7.7%, BMRN +6.7%, REGN +3.6%, ALXN +3.3% and VRTX +3.0% all finished in the green. The Dow Jones Industrial Average under-performed, shedding 23.15 points (-0.12%) today to end 18529.42, and the S&P 500 closed lower by 1.23 points (-0.06%) to 2182.64. The energy complex was weaker as October crude oil futures fell $1.65 (-3.4%) to $47.42/barrel
Among the sectors in the red today, Technology (XLK 47.02, -0.02 -0.04%) was down but only just so. On a light day on the wires, there was no news that stood out among sector components that drove a stock particularly one way or the other. Other sectors as measured by the S&P ended XLU +0.26%, XLV +0.20%, XLP +0.15%, XLF +0.00%, IYZ -0.03%, XLI -0.08%, XLY -0.10%, XLB -0.14%, XLE -1.15% with Energy lagging and Utilities starting the week off in the green.
In the S&P 500 Information Technology (782.89, -0.47 -0.06%) sector, Monday was mostly lower except for a brief few minutes toward to first half of the day. Select components in the space which under-performed included AMAT -1.65%, STX -1.42%, YHOO -1.16%, WDC -0.99%, AAPL -0.78%, ADSK -0.71%, FLIR -0.63%, KLAC -0.61%, ADI -0.47%.
Other notable news items among sector components:
Fiserv (FISV 102.84, +0.30 +0.29%) announced that Merchant Bank of Sri Lanka & Finance PLC (MBSL) has selected the Signature core account processing platform and Teller front-end teller system from Fiserv.
Microsoft (MSFT 57.67, +0.05 +0.09%) acquired AI-scheduling service Genee. Financial terms of the deal were not disclosed.
According to the Nikkei Asian Review, Apple's (AAPL 108.51, -0.85 -0.78%) 2017 premium iPhone model will feature a curved display.
According to Fast Company, Apple (AAPL) is planning to purchase startup Gliimpse.
A Globes report was out over the weekend suggesting Cisco Systems (CSCO 30.63, +0.11 +0.36%) is mulling the exit of an Israeli fiber-optic venture.
Elsewhere in the tech space:
According to the Nikkei Asian Review, Intersil (ISIL 18.74, +3.10 +19.82%) is said to be in talks to be acquired by Japan's Renesas (RNECF 5.75, flat) for about $3 billion.
Rovi (ROVI 20.98, +1.32 +6.71%) signed a 10-year patent renewal license agreement with DISH Network (DISH 49.89, -0.51 -1.01%).
Nam Tai Property (NTP 7.50, +0.03 +0.40%) announced a $50 million stock repurchase program for the period of four weeks starting from September 3, 2016.
Sky-mobi Limited (MOBI 2.03, +0.13 +6.84%) has entered into an Agreement and Plan of Merger with Amber Shining Investment Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands and Power Rich Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands and a wholly-owned subsidiary of Parent. If completed, the Merger will result in the company becoming a privately-held company and its ADSs will no longer be listed on the NASDAQ Global Market.
Giga-tronics (GIGA 1.05, flat) appointed W. Joseph Thompson as Chairman and Acting CEO.
TerraForm Power Operating, LLC (TERP 11.26, -0.15 -1.31%) launched the amended and restated consent solicitation related to senior notes.
Dynasil Corporation of America (DYSL 1.08, -0.01 -0.92%) announced that its contract research subsidiary, RMD Inc., has received grants totaling $1.86 million under the U.S. Department of Energy's Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs.
Echo Global Logistics (ECHO 25.59, -0.09 -0.35%) entered into an Amended and Restated Employment Agreement with each of Douglas Waggoner, the company's Chief Executive Officer, David Menzel, the company's President and Chief Operating Officer, and Kyle Sauers, the company's Chief Financial Officer. The Agreements are effective as of August 19, 2016 and may be terminated at any time, with or without "cause." The Agreements replace the prior employment agreements with the executives which, by their terms, were set to expire on December 31, 2016.
Analyst actions:
WDAY was downgraded to Hold from Buy at Needham,
MWW was downgraded to Mkt Underperform from Mkt Perform at Avondale
