Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Large-cap growth stocks lift market higher after Election Day
04-Nov-20 16:15 ET
Dow +367.63 at 27847.60, Nasdaq +430.21 at 11590.71, S&P +74.42 at 3443.58
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 rallied 2.2% on Wednesday, as the prospect of a divided Congress appeared to outweigh the fact that there was no presidential winner announced. The Nasdaq Composite rallied 3.9% amid strength in its mega-cap/growth components. The Dow Jones Industrial Average gained 1.3% while the Russell 2000 increased just 0.1%.
The votes were still being counted by the market close, but the consensus was that the Democrats would retain majority in the House and the Republicans would retain majority in the Senate. Presumably, there were expectations that a massive stimulus bill, an increase in the capital gains tax rate, or a Medicare for All public option would not pass in Congress.
Furthermore, the presidential outcome uncertainty threatens to delay a potentially smaller-than-hoped stimulus deal, although Senate Majority Leader McConnell said a stimulus package should be passed by the end of the year. A delayed/smaller stimulus deal could mean a slower economic recovery, which would benefit growth stocks over cyclical stocks.
Accordingly, the health care (+4.5%), communication services (+4.3%), information technology (+3.8%), and consumer discretionary (+3.1%) sectors did the heavy lifting, while the materials (-1.7%), utilities (-1.6%), financials (-1.3%), and industrials (-1.0%) sectors closed sharply lower.
Longer-dated Treasuries rallied alongside the growth-oriented stocks amid the recovery concerns and election uncertainty. The resulting curve-flattening activity was a headwind for the banks due to the possibility of reduced net interest income. The SPDR S&P Bank ETF (KBE 33.08, -1.88, -5.4%) dropped 5.4%.
The 2-yr yield declined one basis point to 0.15%, and the 10-yr yield declined 11 basis points to 0.77%. The U.S. Dollar Index declined 0.1% to 93.49. WTI crude futures rose 4.1%, or $1.54, to $39.16/bbl.
Separately, shares of Uber (UBER 40.99, +5.22, +14.6%) and Lyft (LYFT 29.19, +2.96, +11.3%) jumped after California voters passed Proposition 22, allowing app-based drivers to be classified as contractors instead of employees. Biogen (BIIB 355.63, +108.62, +44.0%) surged 44% after the FDA published a positive report on the company's Alzheimer's drug.
Note, former Vice President Joe Biden led President Trump 237-214 in the delegate count as of 4:00 p.m. ET, according to The New York Times. Risk sentiment might have tempered in the afternoon for any surprises tonight or tomorrow.
Reviewing Wednesday's economic data:
The ISM Non-Manufacturing Index for October checked in at 56.6% (Briefing.com consensus 57.3%), versus 57.8% in September. October marked the fifth straight reading above 50.0% -- the dividing line between expansion and contraction -- but it was the lowest reading since May.
The key takeaway from the report is that it points to an ongoing expansion in the services sector, albeit at a somewhat slower pace than the prior month.
The trade deficit for September narrowed to $63.9 billion (Briefing.com consensus -$64.4 billion) from $67.0 billion in August, as export growth ($4.4 billion) outpaced import growth ($1.2 billion). The key takeaway from the report is that global trade activity improved, evidenced by the uptick in both exports and imports in September, yet that improvement belies the major hit to global trade activity amid the pandemic, evidenced by the fact that exports decreased 17.4% year-to-date to $329.0 billion while imports decreased 12.4% to $290.4 billion.
The weekly MBA Mortgage Applications Index decreased 3.8% following a 1.7% increase in the prior week.
The ADP Employment Change report for October estimated 365,000 jobs were added to private-sector payrolls (Briefing.com consensus 600,000). The September reading was revised higher to 753,000 from 749,000.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report, the FOMC Rate Decision, and preliminary Q3 Productivity and Unit Labor Costs on Thursday.
Nasdaq Composite +29.2% YTD
S&P 500 +3.6% YTD
Dow Jones Industrial Average -2.4% YTD
Russell 2000 -3.2% YTD
Market Snapshot
Dow 27847.60 +367.63 (1.34%)
Nasdaq 11590.71 +430.21 (3.85%)
SP 500 3443.58 +74.42 (2.21%)
10-yr Note +11/32 0.777
NYSE Adv 1651 Dec 1376 Vol 994.6 mln
Nasdaq Adv 1768 Dec 1551 Vol 3.6 bln
Industry Watch
Strong: Health Care, Communication Services, Information Technology, Consumer Discretionary
Weak: Materials, Financials, Utilities, Industrials
Moving the Market
-- Expectations that Congress will remain divided outweighed the fact that there was no presidential winner announced
-- Large-cap growth stocks outperformed at the expense of the cyclical/small-cap stocks
-- Longer-dated Treasuries rallied amid recovery concerns attributed to potentially delayed/smaller stimulus deal
WTI crude futures rise 4%
04-Nov-20 15:25 ET
Dow +457.23 at 27937.20, Nasdaq +423.68 at 11584.18, S&P +81.91 at 3451.07
[BRIEFING.COM] The S&P 500 is up 2.4% after trading as high as 3.5% earlier today.
One last look at the S&P 500 sectors shows health care (+4.4%), communication services (+4.1%), information technology (+3.9%), and consumer discretionary (+3.2%) still in the lead. Conversely, the materials (-1.6%), utilities (-1.2%), industrials (-0.6%), and financials (-0.6%) sectors have returned into negative territory.
WTI crude futures settled higher by 4.1%, or $1.54, to $39.16/bbl.
Stocks close higher on Election Day
03-Nov-20 16:15 ET
Dow +554.98 at 27479.97, Nasdaq +202.96 at 11160.50, S&P +58.92 at 3369.16
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 advanced 1.8% on Election Day, as investors bought the dip for the second straight day ahead of tonight's results. The Nasdaq Composite (+1.9%) and Dow Jones Industrial Average (+2.1%) eked out larger gains while the Russell 2000 (+2.9%) legged out the clear advantage.
Ten of the 11 S&P 500 sectors finished in positive territory with each rising more than 1.0%. The industrials (+2.9%), financials (+2.2%), and consumer discretionary (+2.0%) sectors increased at least 2.0%; the energy sector (-0.8%) was the only sector that closed lower despite higher oil prices ($37.62, +0.83, +2.3%).
While there was no specific catalyst today, the gains might have been aided by an acknowledgement that the market was still oversold on a short-term basis. In addition, there was a sense of optimism that an election outcome could be projected tonight or by tomorrow morning (or perhaps some relief that it's almost over).
The positive price action also contributed to continued selling in longer-dated Treasuries, which steepened the curve in a trade that benefited the financials sector. The 2-yr yield was unchanged at 0.16%, while the 10-yr yield increased three basis points to 0.88% to close at its highest level since June 8. The U.S. Dollar Index fell 0.7% to 93.51.
In the tech space, PayPal (PYPL 179.81, -7.95, -4.2%) and Skyworks (SWKS 138.80, -3.32, -2.3%) were notable laggards despite exceeding earnings expectations. PayPal, however, did issue downside Q4 EPS guidance. Arista Networks (ANET 249.49, +33.37, +15.4%) surged 15% following its upbeat earnings results and guidance.
Interestingly, the S&P 500 came within 12 points of its 50-day moving average (3400) shortly before the close. The catalyst that could propel the benchmark index above the key technical level is, of course, the election. As an aside, trading volume was comparable to previous sessions.
Reviewing Tuesday's economic data:
Factory orders for manufactured goods increased 1.1% m/m in September, as expected, following a downwardly revised 0.6% increase (from 0.7%) in August. This is the fifth straight monthly increase in factory orders.
The key takeaway from the report is the affirmation that business spending continued to increase in September, evidenced by a 1.0% increase in new orders for nondefense capital goods excluding aircraft, versus a 2.4% increase in August.
Looking ahead, investors will receive the ISM Non-Manufacturing Index for October, the ADP Employment Change Report for October, the Trade Balance Report for September, and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +24.4% YTD
S&P 500 +4.3% YTD
Dow Jones Industrial Average -3.7% YTD
Russell 2000 -3.3% YTD
Market Snapshot
Dow 27479.97 +554.98 (2.06%)
Nasdaq 11160.50 +202.96 (1.85%)
SP 500 3369.16 +58.92 (1.78%)
10-yr Note -3/32 0.886
NYSE Adv 2407 Dec 606 Vol 861.9 mln
Nasdaq Adv 2688 Dec 697 Vol 3.2 bln
Industry Watch
Strong: Financials, Industrials, Consumer Discretionary
Weak: Energy
Moving the Market
-- Stocks rebounded for the second straight day ahead of Election Day results
-- Buy-the-dip mindset
-- Longer-dated Treasury yields continued to increase
WTI crude futures settle higher while equities trim gains
03-Nov-20 15:25 ET
Dow +524.97 at 27449.96, Nasdaq +194.97 at 11152.51, S&P +55.23 at 3365.47
[BRIEFING.COM] The S&P 500 is trading higher by 1.6% after being up as much as 2.4% earlier today.
One last look at the sector performances shows industrials (+2.6%), financials (+2.1%), and consumer discretionary (+1.9%) still in the lead, while the energy sector (-1.2%) has extended its intraday decline to over 1.0%.
WTI crude futures settled higher by 2.3%, or $0.83, to $37.62/bbl.
Cyclical sectors paced the rebound effort
02-Nov-20 16:15 ET
Dow +423.45 at 26924.99, Nasdaq +46.02 at 10957.54, S&P +40.28 at 3310.24
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 advanced 1.2% on Monday in a cyclically-led rebound. The value-oriented Dow Jones Industrial Average (+1.6%) and Russell 2000 (+2.0%) outpaced the benchmark index, while the Nasdaq Composite (+0.4%) underperformed amid relative weakness in the mega-cap/growth stocks.
Last week was the worst week for the market since March, and investors viewed the weakness as a good time to buy the dip. Money appeared to disproportionately flow into the cyclical stocks in part due to the better-than-expected ISM Manufacturing Index for October, which checked in at 59.3% (Briefing.com consensus 55.7%), versus 55.4% in September.
The energy sector rose 3.7% amid a turnaround in crude futures ($36.79, +1.09, +3.1%), which were down 5% from Friday's settlement price after several European countries announced renewed lockdowns. The materials (+3.4%), industrials (+2.7%), and financials (+1.9%) sectors were other notable gainers.
At the other end, the information technology (+0.3%), consumer discretionary (+0.3%), and communication services (+0.1%) sectors struggled to keep pace due to renewed selling pressure in their mega-cap components, which were also among the weakest performers last week.
Note, the session high for the S&P 500 was set in the first hour of trading. The lack of follow-through buying suggested that the market retained a wait-and-see mindset for the presidential election tomorrow. News that Massachusetts announced a stay-at-home order might have also tempered gains in the cyclical stocks.
In earnings news, Clorox (CLX 216.03, +8.78, +4.2%) was a clear winner as the company continued to benefit from strong demand caused by the pandemic. In addition to beating revenue estimates, the company guided FY21 revenue above consensus.
U.S. Treasuries finished mixed and little changed. The 2-yr yield increased one basis point to 0.16%, and the 10-yr yield declined one basis point to 0.85%. The U.S. Dollar Index finished little changed at 94.06.
Reviewing Monday's economic data:
The ISM Manufacturing Index for October checked in at 59.3% (Briefing.com consensus 55.7%), which is an improvement from 55.4% in September and the highest level since September 2018. The dividing line between expansion and contraction is 50.0%.
The key takeaway from the report is the understanding that the New Orders Index hit its highest level (67.9%) since January 2004, signaling that the recovery in the manufacturing sector is running at a fast pace still despite the lack of a new stimulus package, the election uncertainty, and the new wave of coronavirus cases in the U.S. and Europe.
Total construction spending increased 0.3% m/m in September (Briefing.com consensus +0.9%) on the heels of a downwardly revised 0.8% increase (from +1.4%) in August. Total private construction spending rose 0.9% m/m and total public construction spending declined 1.7%.
The key takeaway from the report is that residential construction spending is healthy and the main driver behind total construction spending increasing 1.5% year-over-year.
Looking ahead, investors will receive Factory Orders for September and auto and truck sales for October on Tuesday.
Nasdaq Composite +22.1% YTD
S&P 500 +2.5% YTD
Dow Jones Industrial Average -5.7% YTD
Russell 2000 -6.0% YTD
Market Snapshot
Dow 26924.99 +423.45 (1.60%)
Nasdaq 10957.54 +46.02 (0.42%)
SP 500 3310.24 +40.28 (1.23%)
10-yr Note +3/32 0.852
NYSE Adv 2229 Dec 789 Vol 890.1 mln
Nasdaq Adv 2301 Dec 1125 Vol 3.2 bln
Industry Watch
Strong: Energy, Materials, Industrials, Financials
Weak: Consumer Discretionary, Information Technology
Moving the Market
-- Buy-the-dip activity following the worst week since March, except in the mega-caps
-- Cyclical/value stocks outperform
-- ISM Manufacturing Index for October increased to 59.3% (Briefing.com consensus 55.7%) from 55.4% in September.
WTI crude futures rebound 3%
02-Nov-20 15:25 ET
Dow +440.05 at 26941.59, Nasdaq +16.63 at 10928.15, S&P +38.02 at 3307.98
[BRIEFING.COM] The S&P 500 is up 1.1% amid gains across all 11 of its sectors.
Briefly recapping the sector performances, today belongs to the energy (+4.5%), materials (+3.7%), industrials (+2.8%), and financials (+2.2%) sectors. The communication services (+0.03%), consumer discretionary (+0.1%), and information technology (+0.1%) sectors cling onto fractional gains.
WTI crude futures settled higher by 3.1%, or $1.09, to $36.79/bbl.
Market weighed down by the mega-caps
30-Oct-20 16:20 ET
Dow -157.51 at 26501.54, Nasdaq -274.00 at 10911.52, S&P -40.15 at 3269.96
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 fell as much as 2.3% on Friday amid weakness in the mega-cap stocks, but a strong finish in the value stocks reduced that decline to 1.2% by the close. The tech-sensitive Nasdaq Composite dropped 2.5%, while the more value-oriented Dow Jones Industrial Average (-0.6%) and Russell 2000 (-1.5%) fared better.
Briefly, Apple (AAPL 108.86, -6.46, -5.6%), Amazon (AMZN 3036.15, -174.86, -5.5%), and Facebook (FB 263.11, -17.72, -6.3%) declined at least 5.5% in sell-the-news reactions to their better-than-expected earnings reports. Alphabet (GOOG 1621.01, +53.77, +3.4%) was a notable exception to the negative reaction trend.
The consumer discretionary (-3.0%) and information technology (-2.4%) sectors were consistent laggards all day, largely due to the losses in Apple and Amazon. Notably, the financials (+0.3%) and energy (+0.2%) sectors eked out gains as investors bought the dip into the close.
For what it's worth, the S&P 500 closed above its September closing low (3236.92) after briefly dipping below it.
Dow components Honeywell (HON 164.95, +0.35, +0.2%) and Chevron (CVX 69.50, +0.70, +1.0%) also closed slightly higher after beating EPS estimates. Twitter (TWTR 41.36, -11.08, -21.1%) had a disappointing earnings reaction like the mega-caps, but its 21% decline was more severe.
In other negative-sounding developments, the U.S. set another record in daily coronavirus cases on Thursday with more than 90,000 new cases, and San Francisco paused some of its reopening efforts due to the alarming resurgence of the coronavirus. While disappointing, the news wasn't necessarily surprising given similar trends earlier this week.
Separately, the Fed announced it lowered the minimum loan size for three Main Street facilities to $100,000 from $250,000 to incentivize lending activity.
U.S. Treasuries started the session on a higher note amid the weakness in equities, but eventually succumbed to selling pressure that pushed longer-dated yields higher. The 2-yr yield was flat at 0.15%, and the 10-yr yield increased three basis points to 0.87%. The U.S. Dollar Index increased 0.1% to 94.05. WTI crude futures declined 1.2%, or $0.43, to $35.70/bbl.
Reviewing Friday's economic data:
Personal income increased 0.9% m/m in September (Briefing.com consensus +0.3%) and personal spending rose 1.4% (Briefing.com consensus 1.0%). The PCE Price Index increased 0.2% m/m, as did the core PCE Price Index, which excludes food and energy, leaving them up 1.4% yr/yr and 1.5% yr/yr, respectively.
The personal income and spending data were good, yet they were imputed in yesterday's Q3 GDP report, so there was less of a surprise pop from the favorable headlines; moreover, we're only a few days away from the start of November, so a report for September isn't altering the anxious mindset for a forward-looking market thinking about the election and the alarming rise in daily coronavirus case counts.
The final October reading for the University of Michigan's Index of Consumer Sentiment checked in at 81.8 (Briefing.com consensus 81.2), up from the preliminary reading of 81.2 and the final September reading of 80.4.
The key takeaway from the report is that changes in expectations seem to be oriented around election expectations. To that end, the Expectations Index rose by 50% among Democrats compared to three months ago and only 7% among Republicans. The ultimate outcome of the election, it was noted, can accelerate or narrow these partisan shifts.
The Q3 Employment Cost Index increased 0.5% (Briefing.com consensus 0.7%), seasonally adjusted, for the three-month period ending in September 2020 after increasing 0.5% for the three-month period ending June 2020. Wages and salaries, which account for about 70% of compensation costs, rose 0.4%, while benefit costs, which make up the remainder of compensation costs, increased 0.6%.
The key takeaway from the report is that compensation costs for civilian workers, private industry workers, and state and local government workers all moderated from the same period a year ago.
The Chicago PMI decreased to 61.1% in October (Briefing.com consensus 59.0%) from 62.4% in September.
Looking ahead, investors will receive the ISM Manufacturing Index for October, Construction Spending for September, and auto and truck sales for October on Monday.
Nasdaq Composite +21.6% YTD
S&P 500 +1.2% YTD
Dow Jones Industrial Average -7.1% YTD
Russell 2000 -7.8% YTD
Market Snapshot
Dow 26501.54 -157.51 (-0.59%)
Nasdaq 10911.52 -274.00 (-2.45%)
SP 500 3269.96 -40.15 (-1.21%)
10-yr Note -26/32 0.867
NYSE Adv 1163 Dec 1799 Vol 1.2 bln
Nasdaq Adv 968 Dec 2448 Vol 3.6 bln
Industry Watch
Strong: Financials, Energy
Weak: Information Technology, Consumer Discretionary
Moving the Market
-- Apple (AAPL), Amazon (AMZN), and Facebook (FB) sell off despite better-than-expected earnings reports
-- Alphabet (GOOG) and value stocks provided offsetting support
-- Fed lowered the minimum loan size for main street facilities
WTI crude futures extend weekly losses
30-Oct-20 15:30 ET
Dow -365.07 at 26293.98, Nasdaq -323.90 at 10861.62, S&P -62.06 at 3248.05
[BRIEFING.COM] The S&P 500 and Russell 2000 are both down 1.9%.
One last look at the S&P 500 sectors shows information technology (-3.0%) and consumer discretionary (-3.4%) down at least 3.0% and continuing to lead the sectors in losses. The financials (-0.6%), industrials (-0.8%), and health care (-0.9%) sectors are down less than 1.0%.
WTI crude futures settled lower by 1.2%, or $0.43, to $35.70/bbl. For the week, crude prices dropped 10.5%.
Mega-caps led market rebound in front of earnings
29-Oct-20 16:15 ET
Dow +139.16 at 26659.05, Nasdaq +180.72 at 11185.52, S&P +39.08 at 3310.11
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 gained 1.2% on Thursday to snap a three-day losing streak in which it fell 5.6%. The Nasdaq Composite increased 1.6%, the Dow Jones Industrial Average increased 0.5%, and the Russell 2000 increased 1.2%.
The primary drivers in today's trade were Apple (AAPL 115.32, +4.12, +3.7%), Amazon (AMZN 3211.01, +48.23, +1.5%), Alphabet (GOOG 1567.24, +50.62, +3.3%), and Facebook (FB 280.83, +13.16, +4.9%) ahead of their earnings reports after the close. Note, these stocks had poor performance yesterday as part of the general weakness in the market, suggesting that today's gains were in part technically-oriented.
To be fair, Pinterest's (PINS 62.51, +13.26, +26.9%) strong earnings report was a supporting factor, as investors hoped that Facebook and Alphabet also benefited from increased advertising spending. The latter two contributed to the outperformance of the S&P 500 communication services sector (+2.9%).
The energy sector (+3.2%) advanced the most, though. The health care sector (-0.7%) was the lone holdout with Abiomed (ABMD 254.61, -28.39, -10.0%) being the weakest component after guiding fiscal Q3 revenue below consensus.
Today's economic data was good for sentiment, even though the initial reaction was muted and the GDP data was considered backward-looking. Q3 GDP increased at a record annualized rate of 33.1% (Briefing.com consensus 30.2%) following a record 31.4% annualized decline in Q2. Weekly initial jobless claims decreased by 40,000 to 751,000 (Briefing.com consensus 763,000).
In other corporate news, Netflix (NFLX 501.21, +17.97, +3.7%) increased its prices for U.S. subscribers, which revived a slumbering stock; Visa (V 184.87, +4.00, +2.2%) beat top and bottom-line estimates; and Marvell (MRVL 38.21, -1.32, -3.3%) agreed to acquire Inphi (IPHI 140.60, +29.63, +26.7%) in a $10 billion deal.
The positive showing in equities decreased interest in U.S. Treasuries and hedging activity. The CBOE Volatility Index fell 6.7% to 37.57. The 2-yr yield finished flat at 0.15%, while the 10-yr yield rose five basis points to 0.84%. The U.S. Dollar Index increased 0.6% to 93.92, which was one headwind for oil prices ($36.13, -1.32, -3.5%).
Reviewing Thursday's economic data:
Q3 GDP increased at a record annualized rate of 33.1% (Briefing.com consensus 30.2%) following a record 31.4% annualized decline in Q2. The Q3 GDP Chair Deflator increased 3.6% (Briefing.com consensus 3.0%) after declining 1.8% in Q2.
The key takeaway from this report is that it was driven by a huge rebound in personal spending, which contributed 25.27 percentage points to the change in GDP. The other key takeaway for a market that is staring at elevated levels of uncertainty looking ahead is that this GDP report, which the market already knew was going to be historically good, is backward looking.
Initial claims for the week ending October 24 decreased by 40,000 to 751,000 (Briefing.com consensus 763,000). Continuing claims for the week ending October 17 decreased by 709,000 to 7.756 million.
The key takeaway from this report is that initial claims are still terribly high. The other key takeaway is that this report is a leading indicator, meaning that the terribly high level of initial claims portends a challenging pace of recovery for the job market.
Pending home sales decreased 2.2% in September (Briefing.com consensus 3.5%) following an unrevised 8.8% increase in October.
Looking ahead to Friday, investors will receive the Personal Income and Spending report for September, the Q3 Employment Cost Index, the Chicago PMI for October, and the final Univ. of Michigan Index of Consumer Sentiment for October.
Nasdaq Composite +24.7% YTD
S&P 500 +2.5% YTD
Dow Jones Industrial Average -6.6% YTD
Russell 2000 -6.4% YTD
Market Snapshot
Dow 26659.05 +139.16 (0.52%)
Nasdaq 11185.52 +180.72 (1.64%)
SP 500 3310.11 +39.08 (1.19%)
10-yr Note -6/32 0.831
NYSE Adv 1993 Dec 1024 Vol 1.0 bln
Nasdaq Adv 2217 Dec 1173 Vol 3.1 bln
Industry Watch
Strong: Energy, Communication Services, Materials
Weak: Health Care, Consumer Staples
Moving the Market
-- Mega-caps led rebound effort ahead of earnings after the close
-- Pinterest (PINS) earnings/guidance was a supporting catalyst in the communication services sector
-- Q3 GDP, weekly claims data were better than expected
WTI crude futures extend recent weakness
29-Oct-20 15:25 ET
Dow +272.77 at 26792.66, Nasdaq +252.60 at 11257.40, S&P +57.09 at 3328.12
[BRIEFING.COM] The S&P 500 continues to trade higher by 1.8% after it struggled to find direction at the open.
One last look at the S&P 500 sectors shows communication services (+3.5%), materials (+2.6%), information technology (+2.5%), and energy (+2.5%) leading the market higher, while the health care sector (-0.1%) is the lone holdout.
Abiomed (ABMD 258.17, -24.76, -8.8%) is the weakest health care component after issuing downside quarterly guidance.
WTI crude futures settled lower by 3.5%, or $1.32, to $36.13/bbl.
Stocks sell off in broad-based de-risking
28-Oct-20 16:20 ET
Dow -943.24 at 26519.89, Nasdaq -426.48 at 11004.80, S&P -119.65 at 3271.03
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 dropped 3.5% on Wednesday, as heightened growth concerns exacerbated de-risking efforts and the recent negative momentum in the market. The Nasdaq Composite fell 3.7%, the Dow Jones Industrial Average fell 3.4%, and the Russell 2000 fell 3.0%.
Similarly, no sector was spared with losses ranging from 2.4% (real estate) to 4.3% (information technology).
The weakness started in the futures market after European markets opened to news that Germany and France were preparing renewed lockdown measures to curb the spread of the coronavirus. Germany's DAX dropped 4.2% on Wednesday, versus a 3.0% decline in the Europe Stoxx 600.
The coronavirus path in the U.S. is tracking in the wrong direction, leaving investors worried that more cities and states could adopt similar measures. With a stimulus deal unlikely to come before the election to mitigate the financial difficulties many businesses and households are facing, the market presumably started to rethink future earnings growth.
Most Q3 earnings reports continued to exceed expectations, but the reactions remained disappointing. Granted, Microsoft (MSFT 202.68, -10.57, -5.0%) did guide revenue for its fiscal second quarter below consensus, and MasterCard (MA 291.38, -25.73, -8.1%) was one the larger companies that missed expectations.
Shares of UPS (UPS 155.78, -15.06, -8.8%) dropped nearly 9% despite beating top and bottom-line estimates. The Dow Jones Transportation Average fell 4.3%.
If that wasn't enough to deter sentiment, Pfizer (PFE 35.45, -1.98, -5.3%) delayed the release of its Phase 3 vaccine trial results, which were expected this week, and the CEOs of Alphabet (GOOG 1516.62, -87.64, -5.5%), Facebook (FB 267.67, -15.62, -5.5%), and Twitter (TWTR 48.56, -2.71, -5.3%) testified before the Senate Commerce Committee on Section 230 of the Communications Decency Act.
Interestingly, longer-dated Treasuries gave up early gains to close little changed. The 2-yr yield and 10-yr yield both finished flat at 0.15% and 0.78%, respectively. The U.S. Dollar Index advanced 0.6% to 93.46. WTI crude futures fell 5.3%, or $2.10, to $37.45/bbl amid the stronger dollar, bearish inventory data, and demand concerns.
Separately, the weekly MBA Mortgage Applications Index increased 1.7% following a 0.6% decline in the prior week.
Looking ahead, investors will receive the advance estimate for Q3 GDP, the weekly Initial and Continuing Claims report, and Pending Home Sales for September on Thursday.
Nasdaq Composite +22.7% YTD
S&P 500 +1.3% YTD
Dow Jones Industrial Average -7.1% YTD
Russell 2000 -7.5% YTD
Market Snapshot
Dow 26519.89 -943.24 (-3.43%)
Nasdaq 11004.80 -426.48 (-3.73%)
SP 500 3271.03 -119.65 (-3.53%)
10-yr Note 0/32 0.775
NYSE Adv 266 Dec 2775 Vol 1.1 bln
Nasdaq Adv 470 Dec 2935 Vol 3.8 bln
Industry Watch
Strong: Real Estate
Weak: Information Technology, Energy, Communication Services, Consumer Discretionary
Moving the Market
-- Sell-off on Wall Street amid increasing growth concerns and negative momentum
-- Stimulus deal not likely before the election, prospect of more business restrictions
-- Microsoft (MSFT) issued below-consensus revenue guidance
WTI crude futures fall 5%
28-Oct-20 15:30 ET
Dow -760.77 at 26702.36, Nasdaq -318.52 at 11112.76, S&P -91.81 at 3298.87
[BRIEFING.COM] The S&P 500 is off session lows with a 2.7% decline. Nevertheless, today's retreat has erased the benchmark index's monthly gain.
One last look at the S&P 500 sectors shows information technology (-3.2%) and energy (-3.4%) down over 3.0%, while the real estate (-1.8%) and financials (-1.9%) sectors are down less than 2.0%.
WTI crude futures settled sharply lower by 5.3%, or $2.10, to $37.45/bbl. A stronger dollar, bearish inventory data, and demand concerns undercut prices.
Negative day, except for the mega-caps and the Nasdaq
27-Oct-20 16:15 ET
Dow -222.19 at 27463.13, Nasdaq +72.41 at 11431.28, S&P -10.29 at 3390.68
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 0.3% on Tuesday in a tight-ranged session. The mega-cap stocks had a strong outing that fueled the outperformance of the Nasdaq Composite (+0.6%), while many of the value/cyclical stocks dragged on the Dow Jones Industrial Average (-0.8%) and Russell 2000 (-0.9%).
New macro developments were lacking, and earnings reactions were generally disappointing, leaving investors grappling with the same growth/coronavirus concerns that were attributed to yesterday's retreat. The key difference today was that these concerns were manifested in a more constructive way: decent gains in the mega-caps.
Accordingly, the S&P 500 consumer discretionary (+0.6%), communication services (+0.6%), and information technology (+0.5%) sectors finished in positive territory. Microsoft (MSFT 213.25, +3.17, +1.5%) provided support for the tech sector ahead of its earnings report after the close.
No other sector within the benchmark index closed higher, and the cyclical industrials (-2.2%), financials (-1.9%), energy (-1.4%), and materials (-1.0%) sectors declined at least 1.0%.
Caterpillar (CAT 157.91, -5.29, -3.2%) and 3M (MMM 161.04, -5.12, -3.1%) were notable drags on the industrials sector after the companies refrained from providing guidance. Health care companies Pfizer (PFE 37.42, -0.50, -1.3%), Merck (MRK 77.99, -0.85, -1.1%), and Eli Lilly (LLY 131.90, -23.29, -5.6%) issued in-line/upside guidance, but shares still closed lower.
Separately, Xilinx (XLNX 124.35, +9.80, +8.6%) agreed to be acquired by Adv. Micro Devices (AMD 78.88, -3.35, -4.1%) in an all-stock transaction valued at $35 billion. Exact Sciences (EXAS 131.12, +24.22, +23.0%) said it will acquire Thrive for up to $2.15 billion in cash and stock.
U.S. Treasuries padded recent gains, pushing yields lower across the curve. The 2-yr yield declined one basis point to 0.15%, and the 10-yr yield declined two basis points to 0.78%. The U.S. Dollar Index decreased 0.1% to 92.96. WTI crude futures rebounded 2.5%, or $0.97, to $39.55/bbl.
Reviewing Tuesday's economic data:
Total durable orders increased 1.9% m/m in September (Briefing.com consensus +0.7%) following a downwardly revised 0.4% increase (from 0.5%) in August. Excluding transportation, durable orders rose 0.8% m/m (Briefing.com consensus +0.4%) on top of an upwardly revised 1.0% increase (from 0.7%) in August.
The key takeaway from the report is that business spending continued to rebound, evidenced by the fifth consecutive increase in nondefense capital goods orders, excluding aircraft, which jumped 1.0% after increasing 2.1% in August.
The Conference Board's Consumer Confidence Index slipped to 100.9 in October (Briefing.com consensus 101.9) from a downwardly revised 101.3 (from 101.8) in September.
The key takeaway from the report is that consumers are feeling less confident about the short-term outlook, as the rise in coronavirus cases and still-high unemployment levels have contributed to concerns about job prospects.
The FHFA Housing Price Index for October increased 1.5% (Briefing.com consensus 0.8%).
The S&P Case-Shiller Home Price Index for August increased 5.2% (Briefing.com consensus 3.8%).
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +27.4% YTD
S&P 500 +5.0% YTD
Dow Jones Industrial Average -3.8% YTD
Russell 2000 -4.7% YTD
Market Snapshot
Dow 27463.13 -222.19 (-0.80%)
Nasdaq 11431.28 +72.41 (0.64%)
SP 500 3390.68 -10.29 (-0.30%)
10-yr Note +3/32 0.777
NYSE Adv 915 Dec 2058 Vol 795.7 mln
Nasdaq Adv 1328 Dec 2099 Vol 3.0 bln
Industry Watch
Strong: Consumer Discretionary, Information Technology, Communication Services
Weak: Energy, Industrials, Financials, Materials, Real Estate
Moving the Market
-- Growth concerns persisted
-- Earnings reactions were generally disappointing
-- Mega-cap stocks outperformed at expense of the cyclical stocks
WTI crude rebounds, but not the energy sector
27-Oct-20 15:25 ET
Dow -159.91 at 27525.41, Nasdaq +67.42 at 11426.29, S&P -5.13 at 3395.84
[BRIEFING.COM] The S&P 500 is trading just below its flat line, while the Nasdaq is trading higher by 0.6%.
One last look at the S&P 500 sectors information technology (+0.6%), consumer discretionary (+0.4%), and communication services (+0.4%) still trading higher and supporting the market; conversely, the industrials (-1.9%), financials (-1.5%), and materials (-0.7%) sectors lag.
WTI crude futures settled higher by 2.5%, or $0.97, to $39.55/bbl. Today was a solid rebound effort after prices fell more than 3.0% yesterday, but that hasn't translated to a higher energy sector (-0.7%).
Stocks fall on familiar growth concerns
26-Oct-20 16:15 ET
Dow -649.86 at 27685.65, Nasdaq -189.34 at 11358.87, S&P -64.44 at 3400.95
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 fell 1.9% on Monday on familiar concerns surrounding the economy, although it was down as much as 2.9% intraday. The Nasdaq Composite declined 1.6%, the Dow Jones Industrial Average declined 2.3%, and the Russell 2000 declined 2.2%.
Notably, stimulus talks remained deadlocked, the U.S. set a new record for daily coronavirus cases last Friday, Germany's SAP (SAP 115.02, -34.66, -23.2%) lowered its revenue outlook due to lockdowns and a muted demand recovery, and new U.S. home sales unexpectedly decreased 3.5% m/m to 959,000 in September (Briefing.com consensus 1.022 mln).
Accordingly, the cyclical energy (-3.5%), industrials (-2.5%), materials (-2.5%), and financials (-2.2%) sectors were among the day's laggards but so was the information technology sector (-2.2%), which typically benefits from growth concerns. The utilities sector (-0.1%) finished just below its flat line.
Conversely, longer-dated Treasuries moved higher in a safe-haven bid, which pushed yields lower. The 10-yr yield declined four basis points to 0.80%, while the 2-yr yield was unchanged at 0.16%. The U.S. Dollar Index advanced 0.3% to 93.07. WTI crude futures fell 3.3%, or $1.30, to $38.58/bbl, which weighed on energy stocks.
The stimulus impasse was nothing new for investors, but the continued deadlock was disappointing given the macroenvironment appeared to take an unfortunate turn, which could undercut confidence for consumers and businesses without fiscal support. Note, House Speaker Pelosi said she was still optimistic in reaching an agreement before the election.
Today's steep decline sent the S&P 500 below its 50-day moving average (3408) on a closing basis. The negative price action had some market participants bracing for further downside, evident by the 18% spike in the CBOE Volatility Index (32.46, +4.91, +17.8%).
Dunkin (DNKN 103.10, +14.31, +16.1%) was a notable exception to the negative trend today after confirming it's in talks to be taken private by Inspire Brands for possibly $106.50/share. DNKN shares surged 16%.
Reviewing Monday's economic data:
New home sales decreased to 959,000 in September (Briefing.com consensus 1.022 mln) from a downwardly revised 994,000 (from 1,011,000) in August. This represents a m/m decline of 3.5%, but a yr/yr increase of 32.1%.
The key takeaway from the report is that strong demand for new homes is resulting in higher prices, which in turn impacts affordability.
Looking ahead, investors will receive Durable Goods Orders for September, the Conference Board's Consumer Confidence Index for October, the FHFA Housing Price Index for October, and the S&P Case-Shiller Home Price Index for August on Tuesday.
Nasdaq Composite +26.6% YTD
S&P 500 +5.3% YTD
Dow Jones Industrial Average -3.0% YTD
Russell 2000 -3.8% YTD
Market Snapshot
Dow 27685.65 -649.86 (-2.29%)
Nasdaq 11358.87 -189.34 (-1.64%)
SP 500 3400.95 -64.44 (-1.86%)
10-yr Note +26/32 0.803
NYSE Adv 396 Dec 2636 Vol 826.9 mln
Nasdaq Adv 628 Dec 2784 Vol 3.2 bln
Industry Watch
Strong: Utilities
Weak: Energy, Materials, Financials, Industrials, Information Technology
Moving the Market
-- Steep losses to start the week, S&P 500 falls below its 50-day moving average (3408)
-- Stimulus talks remain deadlocked, U.S. tallies new record in daily coronavirus cases
-- New home sales unexpectedly decreased in September
-- Weakness in the cyclical stocks
Oil prices fall more than 3%, energy stocks lag
26-Oct-20 15:25 ET
Dow -735.02 at 27600.49, Nasdaq -226.95 at 11321.26, S&P -74.49 at 3390.90
[BRIEFING.COM] The S&P 500 continues to trade lower by 2.2%. Interestingly, the benchmark index is still positive for the month with a 0.9% gain.
One last look at the S&P 500 sectors shows energy (-3.6%), industrials (-2.8%), financials (-2.6%), and materials (-2.7%) leading today's decline, while the utilities sector (+0.1%) is above water in a resilient trade.
WTI crude futures settled sharply lower by 3.3%, or $1.30, to $38.58/bbl.
Modest gains to end the week
23-Oct-20 16:20 ET
Dow -28.09 at 28335.51, Nasdaq +42.28 at 11548.21, S&P +11.90 at 3465.39
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 increased 0.3% on Friday in a tight-ranged session that lacked conviction. The Russell 2000 gained 0.6%, and the Nasdaq Composite gained 0.4%. The Dow Jones Industrial Average, however, declined 0.1%.
The underperformance of the Dow was linked to weakness in Intel (INTC 48.20, -5.70, -10.6%) and American Express (AXP 100.99, -3.80, -3.6%) following their earnings reports. Intel warned about operating margin next quarter, and the 10.6% post-earnings decline pressured the top-weighted S&P 500 information technology sector (-0.1%).
The energy sector (-0.6%) was the only other sector that closed lower due to weakness in oil prices ($39.88/bbl, -0.77, -1.9%). A relatively strong finish in the market, meanwhile, was led by the communication services (+1.1%), consumer discretionary (+0.9%), and real estate (+0.7%) sectors.
The Dow Jones Transportation Average (+1.1%) was another area of relative strength amid solid gains in the airline stocks.
In stimulus news, Treasury Mnuchin said there were still significant differences despite meeting with House Speaker Pelosi numerous times this week. White House Chief of Staff Meadows, however, told reporters that he hopes to have a stimulus deal over the weekend.
Separately, Gilead Sciences (GILD 60.79, +0.12, +0.2%) received FDA approval for its remdesivir drug used to treat COVID-19. Shares spiked 5% on the news but ended the session with a 0.2% gain in a sell-the-news reaction.
U.S. Treasuries finished near their flat lines to reclaim early losses. The 2-yr yield increased one basis point to 0.16%, and the 10-yr yield declined one basis point to 0.84% after touching 0.87% at its high. The U.S. Dollar Index declined 0.2% to 92.72.
Reviewing today's economic data: the preliminary Markit Manufacturing PMI increased to 53.3 in October from 53.2 in September. The preliminary Markit Services PMI increased to 56.0 in October from 54.6 in September.
Looking ahead, investors will receive New Home Sales for September on Monday.
Nasdaq Composite +28.7% YTD
S&P 500 +7.3% YTD
Dow Jones Industrial Average -0.7% YTD
Russell 2000 -1.7% YTD
Market Snapshot
Dow 28335.51 -28.09 (-0.10%)
Nasdaq 11548.21 +42.28 (0.37%)
SP 500 3465.39 +11.90 (0.34%)
10-yr Note +2/32 0.840
NYSE Adv 1876 Dec 1097 Vol 721.9 mln
Nasdaq Adv 2113 Dec 1300 Vol 3.1 bln
Industry Watch
Strong: Communication Services, Consumer Discretionary, Real Estate
Weak: Information Technology, Energy
Moving the Market
-- Stock market closes higher in muted session
-- Intel (INTC) shares sold off following earnings report
-- Mixed messaging on stimulus prospects
WTI crude futures fall 2% and weigh on energy stocks
23-Oct-20 15:25 ET
Dow -50.52 at 28313.08, Nasdaq +13.44 at 11519.37, S&P +6.79 at 3460.28
[BRIEFING.COM] The S&P 500 is trading higher by 0.2% and is on pace to end the week with a modest decline. The index is down 0.7% this week, including today's gain.
One last look inside the S&P 500 shows communication services (+0.8%) being carried into the top spot amid gains in Alphabet (GOOG 1634.62, +18.93, +1.2%) and Facebook (FB 283.23, +5.12, +1.9%). The energy sector (-0.9%) remains at the bottom amid a decline in oil prices.
WTI crude futures settled lower by 1.9%, or $0.77, to $39.88/bbl. For the week, crude prices increased just 0.5%.
Stocks close higher on hopeful-sounding stimulus commentary
22-Oct-20 16:15 ET
Dow +152.84 at 28363.60, Nasdaq +21.31 at 11505.93, S&P +17.93 at 3453.49
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 gained 0.5% on Thursday, as hopeful-sounding stimulus commentary contributed to renewed leadership in the value/cyclical/small-cap stocks. Versus the benchmark index, the Russell 2000 outperformed (+1.7%) by a healthy margin, the Dow Jones Industrial Average (+0.5%) performed in-line, and the Nasdaq Composite (+0.2%) underperformed.
Early in the day, the S&P 500 was down 0.6% despite another round of better-than-expected earnings reports and encouraging economic data, which included a 55,000 decline in weekly initial claims to 787,000 (Briefing.com consensus 860,000). Risk sentiment was ostensibly pressured by chatter that the passage of a stimulus deal might have to wait until after the election.
House Speaker Pelosi, meanwhile, noted that a stimulus deal was "just about there" after negotiating with Treasury Mnuchin several times this week. That observation prompted a relatively modest rebound that was led by the cyclically-oriented energy (+4.2%) and financials (+1.9%) sectors.
The health care (+1.5%) and utilities (+1.5%) sectors followed suit, but losses in the information technology (-0.5%), real estate (-0.8%), and consumer staples (-0.2%) sectors limited the rebound effort.
Interestingly, even before Ms. Pelosi's comments, the 10-yr yield was trending higher for the sixth straight day on burgeoning inflation expectations resulting from a large stimulus package. The upwards trajectory in rates was cited as a drag on highly-valued growth stocks, which had benefited from persistently low rates.
The 10-yr yield finished the session higher by three basis points to 0.85%. The 2-yr yield remained unchanged at 0.15% due to the Fed's stance of keeping the fed funds rate near zero for the next few years. The U.S. Dollar Index advanced 0.4% to 92.95. WTI crude futures rose 1.6%, or $0.62, to $40.65/bbl.
Highlighting some of today's earnings movers, Tesla (TSLA 425.79, +3.15, +0.8%), Coca-Cola (KO 50.68, +0.69, +1.4%), AT&T (T 28.29, +1.57, +5.9%), CSX (CSX 81.73, +3.01, +3.8%), and Dow Inc. (DOW 48.82, +0.27, +0.6%) closed higher following their results. Union Pacific (UNP 187.14, -12.34, -6.2%), however, was a notable earnings laggard.
Reviewing Thursday's economic data, which featured the weekly Initial and Continuing Claims report:
Initial claims for the week ending October 17 decreased by 55,000 to 787,000 (Briefing.com consensus 860,000) while continuing claims for the week ending October 10 decreased by 1.024 million to 8.373 million.
The key takeaway is that this is perhaps a better take on things, as California completed its pause in processing of initial claims and reported actual unemployment insurance claims; nonetheless, initial jobless claims remain at unacceptably high levels.
Existing home sales increased 9.4% m/m in September to a seasonally adjusted annual rate of 6.54 million (Briefing.com consensus 6.10 million), bolstered in part by a 34% annual increase in sales in vacation destination counties.
The key takeaway from the report is that it reflects robust demand for existing homes. That is constraining supply even further, which is going to be a pressure point that feeds higher prices, shuts out an increasing number of first-time buyers, and bolsters the prospects for new home sales.
The Conference Board's Leading Economic Index increased 0.7% m/m in September (Briefing.com consensus +0.6%) following an upwardly revised 1.4% increase (from 1.2%) in August.
The key takeaway from the report is that the strength among the leading indicators has become somewhat more widespread, although the slower pace versus August points to a possible slowdown in recovery momentum entering the fourth quarter.
Looking ahead, investors will receive the preliminary Markit Manufacturing and Services PMIs for September on Friday.
Nasdaq Composite +28.2% YTD
S&P 500 +6.9% YTD
Dow Jones Industrial Average -0.6% YTD
Russell 2000 -2.3% YTD
Major indices close slightly lower in indecisive session
21-Oct-20 16:20 ET
Dow -97.97 at 28210.76, Nasdaq -31.80 at 11484.62, S&P -7.56 at 3435.56
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 decreased 0.2% on Wednesday in an indecisive session that was attributed to the uncertain outcome of stimulus talks. The Nasdaq Composite (-0.3%) and Dow Jones Industrial Average (-0.4%) posted comparable declines, while the Russell 2000 underperformed with a 0.9% decline.
After making progress in negotiations yesterday, House Speaker Pelosi said she was feeling optimistic and still wanted an agreement before the election. Negotiations continued today without a clear indication of the next steps, though. On a related note, the Senate failed to pass a $500 billion stimulus bill today, as expected.
Essentially, stimulus was a non-story today. One of the more interesting developments was the strong performance of the communication services sector (+1.3%), which was powered by Alphabet (GOOG 1593.31, +37.38, +2.4%), Facebook (FB 278.73, +11.17, +4.2%), and Twitter (TWTR 50.23, +3.88, +8.4%) following stellar earnings results from Snap (SNAP 36.50, +8.05, +28.3%).
Obfuscated was the 7% decline in Netflix (NFLX 489.05, -36.37, -6.9%), which missed subscriber estimates. Elsewhere, the energy sector dropped 2.0% amid lower oil prices ($40.03/bbl, -$1.48, -3.6%), and the industrials sector fell 1.0% amid broad-based selling.
Separately, Verizon (VZ 56.75, -0.50, -0.9%), Abbott Labs (ABT 105.93, -2.43, -2.2%), and Texas Instruments (TXN 146.13, -4.70, -3.2%) closed lower despite each reporting better-than-expected earnings results and providing upbeat guidance. PayPal (PYPL 213.07, +11.11, +5.5%) pleasantly surprised investors by implementing cryptocurrency services.
In the Treasury market, the 10-yr yield increased for the fifth straight session, closing two basis point higher at 0.82% on growing expectations for inflation resulting from another stimulus package. The 2-yr yield was unchanged at 0.15%. The U.S. Dollar Index fell 0.5% to 92.64.
Wednesday's economic data was limited to the weekly MBA Mortgage Applications Index, which decreased 0.6% following a 0.7% decline in the prior week. Looking ahead, investors will receive the weekly Initial and Continuing Claims report, Existing Home Sales for September, and the Conference Board's Leading Economic Index for September on Thursday.
Nasdaq Composite +28.0% YTD
S&P 500 +6.3% YTD
Dow Jones Industrial Average -1.2% YTD
Russell 2000 -3.9% YTD
Market Snapshot
Dow 28210.76 -97.97 (-0.35%)
Nasdaq 11484.62 -31.80 (-0.28%)
SP 500 3435.56 -7.56 (-0.22%)
10-yr Note -3/32 0.817
NYSE Adv 1036 Dec 1968 Vol 849.4 mln
Nasdaq Adv 1277 Dec 2147 Vol 3.4 bln
Industry Watch
Strong: Communication Services, Consumer Staples
Weak: Energy, Industrials, Consumer Discretionary
Moving the Market
-- Major indices close slightly lower in indecisive session; stimulus uncertainty
-- Strength in the communications services sector after Snap (SNAP) delivered strong earnings report
WTI crude futures settle sharply lower while yields increase
21-Oct-20 15:30 ET
Dow +31.74 at 28340.47, Nasdaq +43.91 at 11560.33, S&P +11.71 at 3454.83
[BRIEFING.COM] The S&P 500 is up 0.2% while investors continue to await any news out of stimulus talks. The move in longer-dated Treasuries over the past week has been noteworthy.
The 10-yr yield is up two basis points to 0.82% after touching 0.69% on Oct. 15, which is indicative of investors starting to anticipate inflation caused by a large stimulus package. There is chatter if a sustained increase in yields will undercut shares of growth stocks, but so far this has yet to transpire.
WTI crude futures settled sharply lower by 3.6%, or $1.48, to $40.03/bbl.
Stocks edged higher ahead of stimulus update
20-Oct-20 16:20 ET
Dow +113.37 at 28308.73, Nasdaq +37.61 at 11516.42, S&P +16.20 at 3443.12
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 gained 0.5% on Tuesday, although it was up as much as 1.5% ahead of a stimulus meeting between House Speaker Pelosi and Treasury Secretary Mnuchin. The Nasdaq Composite increased 0.3%, the Dow Jones Industrial Average increased 0.4%, and the Russell 2000 increased 0.3%.
Yesterday reports suggested a stimulus deal wasn't looking imminent, but comments from the House Speaker after Monday's close provided the market hope that both sides would get something done soon. Senate Majority Leader McConnell said he would bring a presidentially supported bill to the floor if it passes the House but reportedly wants a deal after the election.
Ms. Pelosi and Mr. Mnuchin were still negotiating at market's close, which may have caused some hedging activity for any disappointment. Nevertheless, ten of the 11 S&P 500 sectors still closed higher, led by the energy (+1.2%), financials (+0.8%), and communication services (+0.8%) sectors, while the consumer staples sector (-0.1%) closed lower.
Energy stocks benefited from higher oil prices ($41.51/bbl, +0.67, +1.6%); financial stocks benefited from curve-steepening activity due to selling on the longer-end of the curve; and Alphabet (GOOG 1555.93, +21.32, +1.4%) was a bright spot in the communication services sector despite the Department of Justice filing an antitrust lawsuit against Google.
Other measures of support included commentary that Moderna's (MRNA 71.31, +0.35, +0.5%) COVID-19 vaccine could be available in December, encouraging housing starts and building permits data for September, and better-than-expected earnings reports from Dow components Procter & Gamble (PG 142.48, +0.57, +0.4%) and Travelers (TRV 118.11, +6.27, +5.6%).
Conversely, notable earnings-related laggards included IBM (IBM 117.37, -8.15, -6.5%) and Philip Morris International (PM 73.33, -4.51, -5.8%). Intel (INTC 53.43, -1.15, -2.1%) struggled after confirming it will sell its NAND memory business to SK Hynix for $9 billion.
Recapping the moves in the Treasury market, selling in longer-dated maturities drove yields higher on the prospects that a large stimulus package would spur economic growth/inflation. The 2-yr yield was flat at 0.15%, while the 10-yr yield rose four basis points to 0.80%. The U.S. Dollar Index fell 0.4% to 93.08.
Reviewing Tuesday's economic data:
Total housing starts increased 1.9% m/m in September to a seasonally adjusted annual rate of 1.415 million units (Briefing.com consensus 1.430 million). Total building permits jumped 5.2% m/m to 1.553 million (Briefing.com consensus 1.510 million).
The key takeaway from the report is that there was robust growth in both single-unit starts (+8.5% m/m) and permits (+7.8% m/m), which reflects underlying strength in the market for single-family homes.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index and the Fed Beige Book for September on Wednesday.
Nasdaq Composite +28.4% YTD
S&P 500 +6.6% YTD
Dow Jones Industrial Average -0.8% YTD
Russell 2000 -3.0% YTD
Market Snapshot
Dow 28308.73 +113.37 (0.40%)
Nasdaq 11516.42 +37.61 (0.33%)
SP 500 3443.12 +16.20 (0.47%)
10-yr Note -2/32 0.796
NYSE Adv 2002 Dec 953 Vol 755.3 mln
Nasdaq Adv 1835 Dec 1562 Vol 3.4 bln
Industry Watch
Strong: Financials, Energy, Communication Services
Weak: Consumer Staples
Moving the Market
-- Stocks edged higher ahead of stimulus update
-- Earnings reports were mostly better than expected
-- Energy and financial stocks outperformed amid higher oil prices, curve-steepening activity
WTI crude futures settle higher to support energy stocks
20-Oct-20 15:25 ET
Dow +152.09 at 28347.45, Nasdaq +56.13 at 11534.94, S&P +21.92 at 3448.84
[BRIEFING.COM] The S&P 500 is up 0.5% to further decline from prior highs as the stimulus meeting between House Speaker Pelosi and Treasury Secretary Mnuchin gets underway.
One last look at the S&P 500 sectors shows energy (+1.1%) claiming today's top spot and is the only sector trading higher by at least 1.0%. The consumer staples sector (-0.1%) trades lower amid a disappointing earnings reaction in Philip Morris International (PM 73.46, -4.35, -5.6%).
WTI crude futures settled higher by 1.6%, or $0.67, to $41.51/bbl. The higher oil prices have provided the energy sector a boost.
Stocks falter amid disappointing stimulus update
19-Oct-20 16:20 ET
Dow -410.89 at 28195.36, Nasdaq -192.67 at 11478.81, S&P -56.89 at 3426.92
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 fell 1.6% on Monday, as risk sentiment was pressured by headlines indicating a stimulus deal doesn't appear imminent. The Nasdaq Composite fell 1.7%, the Dow Jones Industrial Average fell 1.4%, and the Russell 2000 fell 1.2%.
The day did start on a positive note before the major indices quickly embarked on a steady decline on no specific news. In the afternoon, the stimulus news appeared to have an algorithmic effect on the market considering House Speaker Pelosi gave the White House until Tuesday to reach a deal in order to get it done before the election.
The news wasn't necessarily surprising, as both sides had been divided on key issues for some time, but the update combined with the negative price action beforehand kept buyers sidelined. Every sector in the S&P 500 closed lower with losses ranging from 0.9% (utilities) to 2.1% (energy). The information technology sector fell 1.9%.
Moreover, today's slate of positive-sounding news was largely brushed aside. One exception was the airline stocks did rise on news that daily airline passenger levels reached one million for the first time since March. The U.S. Global Jets ETF (JETS 17.68, +0.19, +1.1%) increased 1%.
Other encouraging news included the NAHB Housing Market Index increasing to a new all-time high of 85 in October (Briefing.com consensus 83), China reporting hopeful economic data, and commentary that AstraZeneca's (AZN 52.44, -0.59, -1.1%) vaccine candidate could be available soon after Christmas.
In M&A activity, Intel (INTC 54.58, +0.42, +0.8%) was reported to be nearing a $10 billion agreement to sell its NAND memory unit to SK Hynix (HXSCL), and Concho Resources (CXO 27.26, -1.34, -2.8%) confirmed it will be acquired by ConocoPhillips (COP 32.70, -1.07, -3.2%) in an all-stock transaction valued at $9.7 billion.
Longer-dated Treasuries faced selling pressure despite the weakness in equities, which was reflective of cash-raising efforts. The 2-yr yield finished flat at 0.15%, while the 10-yr yield increased two basis points to 0.76%. The U.S. Dollar Index declined 0.3% to 93.44. WTI crude futures finished little changed at $40.84/bbl.
Looking ahead, the Housing Starts and Building Permits report for September is scheduled to be released on Tuesday.
Nasdaq Composite +27.9% YTD
S&P 500 +6.1% YTD
Dow Jones Industrial Average -1.2% YTD
Russell 2000 -3.3% YTD
Market Snapshot
Dow 28195.36 -410.89 (-1.44%)
Nasdaq 11478.81 -192.67 (-1.65%)
SP 500 3426.92 -56.89 (-1.63%)
10-yr Note -2/32 0.766
NYSE Adv 814 Dec 2174 Vol 834.0 mln
Nasdaq Adv 1089 Dec 2321 Vol 3.4 bln
Industry Watch
Strong: Utilities
Weak: Energy, Information Technology, Communication Services
Moving the Market
-- Stocks retreat in broad-based decline
-- Reports indicated that a stimulus deal did not appear imminent
WTI crude futures settle little changed while equities extend weakness
19-Oct-20 15:25 ET
Dow -448.86 at 28157.39, Nasdaq -208.67 at 11462.81, S&P -61.15 at 3422.66
[BRIEFING.COM] The S&P 500 is down 1.7% to trade at session lows as sellers retain control of the market. The Russell 2000 is down 1.3%.
One last look at the S&P 500 sectors shows information technology (-1.9%), health care (-1.9%), and communication services (-2.1%) leading the retreat with 2% declines. Apple (AAPL 116.29, -2.74, -2.3%) is exerting influential pressure on the major indices after holding up well earlier in the session.
WTI crude futures settled little changed at $40.84/bbl. It was a relatively uneventful day for crude prices.
S&P 500 closes flat in mixed session
16-Oct-20 16:20 ET
Dow +112.11 at 28606.25, Nasdaq -42.32 at 11671.48, S&P +0.47 at 3483.81
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 (+0.01%) finished little changed on Friday after being up as much as 0.9% early in the day. The Dow Jones Industrial Average outperformed with a 0.4% gain, while the Nasdaq Composite (-0.4%) and Russell 2000 (-0.3%) slipped into negative territory as selling picked up into the close on no specific news.
The strong start was mainly attributed to news that Pfizer (PFE 37.96, +1.41, +3.9%) may file for emergency use authorization for its COVID-19 vaccine by the end of November, and retail sales increasing 1.9% m/m in September (Briefing.com consensus +0.6%). The retail sales data had overshadowed an unexpected 0.6% decline in industrial production for September (Briefing.com consensus +0.6%).
Fittingly, the health care sector (+1.0%) was among today's sector leaders, right behind utilities (+1.1%). The consumer discretionary sector (-1.0%), however, really took a hit during the last hour of trading amid broad-based selling, joining the information technology (-0.3%) and real estate (-0.4%) sectors in the red.
The energy sector (-2.3%) and Dow Jones Transportation Average (-1.3%) were consistent laggards today amid disappointing reactions to mixed earnings reports from Schlumberger (SLB 14.97, -1.45, -8.8%), J.B. Hunt Transport (JBHT 128.04, -13.80, -9.7%), and Kansas City Southern (KSU 179.01, -5.00, -2.7%).
The weakness in the transportation space was mitigated in the industrials sector (+0.7%) by nice gains in Boeing (BA 167.35, +3.11, +1.9%) and Caterpillar (CAT 168.75, +3.71, +2.3%). Boeing's 737 MAX was deemed safe to fly by EU regulators, and CAT was upgraded to Overweight from Equal Weight at Wells Fargo.
Evidently, the session was mixed with conflicting trading narratives that made it hard to identify a clear theme. It was a stock picker's kind of day and certainly one for options traders amid monthly options expiration activity.
U.S. Treasuries finished the session on a lower note. The 2-yr yield increased two basis points to 0.15%, and the 10-yr yield increased one basis point to 0.74%. The U.S. Dollar Index declined 0.2% to 93.71. WTI crude futures declined 0.3%, or $0.11, to $40.85/bbl.
Reviewing Friday's economic data, which featured Retail Sales for September:
Total retail sales increased 1.9% m/m in September (Briefing.com consensus +0.6%). Excluding autos, retail sales were up 1.5% m/m (Briefing.com consensus +0.3%). On a yr/yr basis, total retail sales were up 5.4%. Excluding autos, they were up 4.0%.
The key takeaway from the report is that the sales gains were broad based and driven by increases in discretionary categories, which will validate expectations for a huge rebound in GDP growth in the third quarter.
Industrial production declined 0.6% m/m in September, which was well below expectations (Briefing.com consensus +0.6%). Total capacity utilization of 71.5% also disappointed (Briefing.com consensus 71.9%).
The key takeaway from the report is that it defied the rebound momentum that had been building in the third quarter. It was the first decline in five months, but despite the September decline, industrial production increased at an annual rate of 39.8% for the third quarter.
The preliminary University of Michigan's Index of Consumer Sentiment for October checked in at 81.2 (Briefing.com consensus 82.0). That was a bit weaker than expected, but an improvement from the final September reading of 80.4.
The key takeaway from the report is that concerns about current conditions, which were linked to slowing employment growth, a pickup in COVID-19 infections, and the lack of additional stimulus, were offset mostly by an improvement in attitudes about prospects for the year ahead.
The Treasury Budget showed a $200.1 bln deficit in August. The budget data is not seasonally adjusted, so the August deficit cannot be compared to the July deficit of $63.0 bln. The deficit in August 2019 was $200.3 bln.
The key takeaway from the report is that while outlays and receipts showed little yr/yr change in August, the year-to-date deficit climbed above $3 trillion.
Business inventories increased 0.1% in August (Briefing.com consensus 0.4%) following a 0.1% increase in July.
Looking ahead, investors will receive the NAHB Housing Market Index for October on Monday.
Nasdaq Composite +30.1% YTD
S&P 500 +7.8% YTD
Dow Jones Industrial Average +0.2% YTD
Russell 2000 -2.1% YTD
Market Snapshot
Dow 28606.25 +112.11 (0.39%)
Nasdaq 11671.48 -42.32 (-0.36%)
SP 500 3483.81 +0.47 (0.01%)
10-yr Note -1/32 0.745
NYSE Adv 1209 Dec 1779 Vol 887.8 mln
Nasdaq Adv 1629 Dec 1785 Vol 3.1 bln
Industry Watch
Strong: Health Care, Utilities, Industrials
Weak: Energy, Consumer Discretionary, Information Technology, Real Estate
Moving the Market
-- Stocks close mixed in lackluster trading session
-- September retail sales beat expectations, lingering vaccine optimism
-- Disappointing earnings reactions in the energy and transportation spaces
WTI crude futures settle lower, pare weekly gain
16-Oct-20 15:25 ET
Dow +190.32 at 28684.46, Nasdaq +11.29 at 11725.09, S&P +12.43 at 3495.77
[BRIEFING.COM] The S&P 500 is up 0.4% and is on pace to end the week higher by 0.5%.
One last look at the S&P 500 sector standings today shows health care (+1.2%), utilities (+1.2%), and industrials (+1.0%) atop the leaderboard, while the energy (-2.0%) and consumer discretionary (-0.3%) sectors underperform in the red.
WTI crude futures settled the session lower by 0.3%, or $0.11, t
Stocks stage rebound from early lows
15-Oct-20 16:15 ET
Dow -19.80 at 28494.14, Nasdaq -54.86 at 11713.80, S&P -5.33 at 3483.34
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 battled back from an early 1.4% decline on Thursday to close lower by just 0.2%. Value-oriented stocks led the rebound effort at the expense of their growth-oriented peers, evident by the 1.1% gain in the Russell 2000 and 0.5% decline in the Nasdaq Composite.
The Dow Jones Industrial Average declined 0.1%, while one of its lowest-priced components in Walgreens Boots Alliance (WBA 37.64, +1.73, +4.8%) rose 5% following its earnings report.
The early weakness was attributed to ostensible growth concerns caused by renewed lockdowns in Europe amid rising cases of coronavirus and by a 53,000 increase in weekly jobless claims to 898,000 (Briefing.com consensus 830,000). In addition, disappointing revenue guidance from Fastly (FSLY 89.70, -33.48, -27.2%) did take some steam out of many growth-oriented stocks.
Investors, however, steadily bought the dip throughout the day that lifted every sector off its low and notably pushed the S&P 500 energy (+1.2%), financials (+0.8%), real estate (+0.5%), and industrials (+0.4%) sectors into positive territory. Note, these sectors are among five S&P 500 sectors still down for the year.
The information technology (-0.4%), communication services (-0.7%), and health care (-0.7%) sectors were among the day's laggards.
Earnings-driven gains in Morgan Stanley (MS 51.33, +0.68, +1.3%) and Charles Schwab (SCHW 39.03, +1.91, +5.2%) provided the lift for the financials sector, which had struggled this week amid lackluster/disappointing reactions to previous earnings reports. United Airlines (UAL 34.25, -1.36, -3.8%) reported worse-than-expected results, which kept the airline stocks grounded today.
U.S. Treasuries finished near their flat lines after starting the session with modest gains. The 2-yr yield was unchanged at 0.13%, and the 10-yr yield increased one basis point to 0.73%. The U.S. Dollar Index advanced 0.5% to 93.83 amid relative weakness in the British pound. WTI crude futures declined 0.2%, or $0.06, to $40.96/bbl.
Reviewing Thursday's economic data:
Initial claims for the week ending October 10 increased by 53,000 to 898,000 (Briefing.com consensus 830,000). Continuing claims for the week ending October 3 declined by 1.165 million to 10.018 million.
The key takeaway from the report is that the exceedingly high level of initial claims will contribute to the view that the recovery in the labor market is slowing and speaks to the need for more stimulus to keep it from getting worse.
The Philadelphia Fed Index climbed to 32.3 in October (Briefing.com consensus 16.0) from 15.0 in September.
The Empire State Manufacturing Survey for October decreased to 10.5 (Briefing.com consensus 14.0) following the prior month's reading of 17.0.
Import prices increased 0.3% in September; and prices excluding oil increased 0.6%. Export prices increased 0.6% in September; and prices excluding agriculture increased 0.3%.
Looking ahead to Friday, investors will receive Retail Sales for September, Industrial Production and Capacity Utilization for September, the preliminary University of Michigan Index of Consumer Sentiment for October, Business Inventories for August, and Net Long-term TIC Flows for August.
Nasdaq Composite +30.6% YTD
S&P 500 +7.8% YTD
Dow Jones Industrial Average -0.2% YTD
Russell 2000 -1.8% YTD
Market Snapshot
Dow 28494.14 -19.80 (-0.07%)
Nasdaq 11713.80 -54.86 (-0.47%)
SP 500 3483.34 -5.33 (-0.15%)
10-yr Note 0/32 0.730
NYSE Adv 1698 Dec 1306 Vol 758.4 mln
Nasdaq Adv 1850 Dec 1532 Vol 3.3 bln
Industry Watch
Strong: Real Estate, Financials, Energy, Industrials
Weak: Information Technology, Communication Services, Health Care
Moving the Market
-- Stocks staged rebound off early lows
-- Value stocks outperformed growth stocks
-- Growth concerns were attributed to the early weakness
WTI crude futures settle slightly lower
15-Oct-20 15:30 ET
Dow +4.16 at 28518.10, Nasdaq -36.61 at 11732.05, S&P -2.93 at 3485.74
[BRIEFING.COM] The S&P 500 is now down just 0.1% after being down as much as 1.4% early in the day. The rebound effort has been steady throughout the day.
One last look at the S&P 500 sectors shows energy (+0.6%), financials (+0.7%), and real estate (+0.8%) up the most, followed by modest gains in four other sectors. The health care (-0.7%) and communication services (-0.6%) sectors still underperform but are only down modestly.
WTI crude futures settled lower by 0.2%, or $0.06, to $40.96/bbl.
Stocks close lower amid disappointing earnings reactions
14-Oct-20 16:25 ET
Dow -165.81 at 28513.94, Nasdaq -95.17 at 11768.66, S&P -23.26 at 3488.67
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 lost 0.7% on Wednesday for its second straight decline, as the market appeared influenced by disappointing earnings reactions and some consolidation activity. The Nasdaq Composite declined 0.8%, the Dow Jones Industrial Average declined 0.6%, and the Russell 2000 declined 0.9%.
Shares of UnitedHealth (UNH 321.85, -9.57, -2.9%), Bank of America (BAC 23.62, -1.33, -5.3%), and Wells Fargo (WFC 23.25, -1.49, -6.0%) fell between 3-6% despite the companies reporting mixed-to-positive earnings results. Goldman Sachs (GS 211.23, +0.42, +0.2%) was little changed despite reporting blowout quarterly results.
BAC and WFC contributed to the underperformance of the financials sector (-1.1%), which joined the consumer discretionary (-1.4%), communication services (-1.2%), and real estate (-1.2%) sectors as today's laggards. The industrials (+0.5%), materials (+0.4%), and energy (+0.3%) sectors closed higher.
Some attributed today's decline in part to Treasury Secretary Mnuchin expressing some doubt about a stimulus package before the election, and France announcing night-time restrictions to curb a "second wave" of coronavirus in the region.
The market might not have been so distraught by these latter developments since several cyclical sectors did finish in positive territory. The energy space particularly benefited from higher oil prices ($41.02, +0.83, +2.1%) and M&A speculation surrounding Concho Resources (CXO 48.66, +4.52, +10.2%).
Therefore, it's reasonable to think that the market needed to find reasons to cool down from a hot start to the month, including the rally on Monday.
U.S. Treasuries finished with small gains amid the decline in equities and cautious-minded economic commentary from Goldman Sachs. The 2-yr yield declined two basis points to 0.13%, and the 10-yr yield declined one basis point to 0.72%. The U.S. Dollar Index decreased 0.2% to 93.38.
Reviewing Wednesday's economic data:
The Producer Price Index for final demand increased 0.4% m/m (Briefing.com consensus +0.1%) while the index for final demand, less food and energy, also increased 0.4% (Briefing.com consensus +0.3%).
The key takeaway from the report is that the monthly surprises were tempered by the absence of any nettlesome inflation pressure on a year-over-year basis. The index for final demand was up just 0.4% yr/yr while the index for final demand, less food and energy, was up 1.2%.
The weekly MBA Mortgage Applications Index decreased 0.7% following a 4.6% increase in the prior week.
Looking ahead to Thursday, investors will receive the weekly Initial and Continuing Claims report, the Philadelphia Fed Index for October, the Empire State Manufacturing Index for October, Import and Export Prices for September, and possibly the Treasury Budget for September, which has been delayed for fiscal year end reconciliation.
Nasdaq Composite +31.2% YTD
S&P 500 +8.0% YTD
Dow Jones Industrial Average -0.1% YTD
Russell 2000 -2.8% YTD
Market Snapshot
Dow 28513.94 -165.81 (-0.58%)
Nasdaq 11768.66 -95.17 (-0.80%)
SP 500 3488.67 -23.26 (-0.66%)
10-yr Note +22/32 0.728
NYSE Adv 1165 Dec 1825 Vol 764.4.1 mln
Nasdaq Adv 1139 Dec 2192 Vol 3.4 bln
Industry Watch
Strong: Energy, Industrials, Materials
Weak: Consumer Discretionary, Information Technology, Communication Services
Moving the Market
-- Stock market trades lower, consolidates recent gains
-- Underwhelming earnings reactions
-- Stimulus talks drag on
-- Cyclical sectors outperform
WTI crude futures gain 2%, energy stocks outperform
14-Oct-20 15:25 ET
Dow -106.10 at 28573.65, Nasdaq -70.82 at 11793.01, S&P -16.45 at 3495.48
[BRIEFING.COM] The S&P 500 is down 0.5% to trade well off session lows (-0.9%). The Russell 2000 is also down 0.5%.
One last look at the sector performances shows eight trading lower and three trading higher. Consumer discretionary (-1.1%) and communication services (-1.0%) are down at least 1.0%, while the industrials (+1.0%), energy (+0.6%), and materials (+0.6%) sectors sport decent gains on this down index day.
WTI crude futures settled higher by 2.1%, or $0.83, to $41.02/bbl.
Market snaps winning streak amid sell-the-news events
13-Oct-20 16:15 ET
Dow -157.71 at 28679.75, Nasdaq -12.36 at 11863.83, S&P -22.29 at 3511.93
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The major indices snapped four-session winning streaks on Tuesday, as discouraging health developments and cautious-minded commentary from high-profile banks tempered investor enthusiasm. The S&P 500 (-0.6%), Dow Jones Industrial Average (-0.6%) and Russell 2000 (-0.7%) declined around 0.6%, while Nasdaq Composite declined 0.1%.
Weakness was found primarily in value-oriented and cyclical sectors like financials (-1.9%), real estate (-1.7%), energy (-1.6%), and industrials (-1.1%). The communication services (+0.3%) and consumer discretionary (+0.03%) sectors closed slightly higher.
JPMorgan Chase (JPM 100.78, -1.66, -1.6%), Citigroup (C 43.63, -2.25, -4.9%), and Johnson & Johnson (JNJ 148.36, -3.48, -2.3%) kicked off the Q3 earnings-reporting season with better-than-expected quarterly results, but their reports were a seeming afterthought for the market.
That's because JPMorgan said another fiscal relief package, which has been elusive, would simply improve the odds of better economic outcomes; Citigroup said it expects a somewhat more muted and slower recovery in both unemployment and GDP through 2022; and JNJ paused its COVID-19 vaccine trials due to an unexpected illness in a patient.
The S&P 500 fell to session lows (-0.9%) shortly after it was reported that Eli Lilly (LLY 150.08, -4.41, -2.9%) paused its antibody trial for safety reasons, but the benchmark index found support at the 3500 level.
For some perspective, the set-up wasn't good for the banks or the market. The SPDR S&P Bank ETF (KBE 32.25, -0.95, -2.9%) was up 17.7% since Sept. 23, versus a 9.2% gain in the S&P 500, suggesting there might have been a sell-the-news mindset. The same could be said of Apple (AAPL 121.10, -3.30), which declined 2.7% after it rose more than 6% yesterday in front of today's iPhone 12 event.
Within the communication services sector, Walt Disney (DIS 128.96, +3.99, +3.2%) announced a strategic reorganization for its media and entertainment businesses while Netflix (NFLX 554.09, +14.28, +2.7%) reportedly removed free trial offerings for U.S. subscribers. Shareholders liked both news.
U.S. Treasuries ended the session with gains that caused some curve-flattening activity. The 2-yr yield declined one basis point to 0.15%, and the 10-yr yield declined five basis points to 0.73%. The U.S. Dollar Index gained 0.5% to 93.53. WTI crude futures increased 2.2%, or $0.85, to $40.19/bbl.
Reviewing Tuesday's economic data:
Total CPI and core CPI, which excludes food energy, were both up 0.2% m/m in September, as expected. That left the yr/yr readings at 1.4% and 1.7%, respectively, which is to say they are hanging on the Fed's average 2.0% inflation target like a wet blanket.
The key takeaway from the report is that there are pockets of inflation excess, but overall, the inflation rate isn't going to be ringing any tightening alarm bells at the Federal Reserve.
The NFIB Small Business Optimism Index increased 104.0 in September following a 100.2 reading in August.
Looking ahead, investors will receive the Producer Price Index for September, the Fed Beige Book for September, and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +32.2% YTD
S&P 500 +8.7% YTD
Dow Jones Industrial Average +0.5% YTD
Russell 2000 -1.9% YTD
Mega-caps resume the leadership in Monday rally
12-Oct-20 16:20 ET
Dow +250.62 at 28837.46, Nasdaq +296.32 at 11876.19, S&P +57.09 at 3534.22
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 rose 1.6% on Monday in a steady advance driven by the mega-cap stocks. The Nasdaq Composite outperformed with a 2.6% gain, while the Dow Jones Industrial Average (+0.9%) and Russell 2000 (+0.7%) underperformed with gains under 1.0%.
Apple (AAPL 124.42, +7.45, +6.4%) and Amazon (AMZN 3442.93, +156.28, +4.8%) stood out with impressive gains in anticipation of their iPhone 12 and Prime Day events on Tuesday. Those were the attributed catalysts, but the stimulus impasse in Washington may have also contributed to the transition of recent leadership to the mega-caps from the cyclical stocks.
Accordingly, the S&P 500 information technology (+2.7%), communication services (+2.4%), and consumer discretionary (+2.2%) sectors, which are home to the mega-caps, finished atop the sector standings. No other sector outperformed the benchmark index, and the materials sector (-0.2%) closed lower.
Briefly recapping the latest on stimulus, House Democrats and Senate Republicans rejected the $1.8 trillion offer from the White House for different reasons. Based on the relatively broad-based advance in the market, investors presumably remained in agreement that a deal will eventually be reached, either under the current administration or new leadership in 2021.
The financials sector (+1.1%), undeterred by the lack of deal, had a solid outing ahead of earnings reports from several big banks tomorrow morning. Elsewhere, PepsiCo (PEP 142.13, +3.69, +2.7%) was upgraded to Buy from Neutral at Citigroup, and Twilio (TWLO 329.72, +23.48, +7.7%) agreed to acquire Segment for approximately $3.2 billion in stock.
With the U.S. Treasury market closed for Columbus Day, commentary mainly focused on the bullish price action in equities. Consequently, it's reasonable to believe that a fear of missing out on further gains was another factor that fueled the positive momentum in the market. The S&P 500 closed within 1.5% of its all-time high.
WTI crude futures fell 3.1%, or $1.26, to $39.34/bbl. The U.S. Dollar Index finished flat at 93.05.
Investors did not receive any economic data on Monday. Looking ahead, the Consumer Price Index for September, the Treasury Budget for September, and the NFIB Small Business Optimism Index for September are scheduled for Tuesday. Note, the September Treasury Budget is often delayed to allow more time for fiscal year end reconciliation.
Nasdaq Composite +32.4% YTD
S&P 500 +9.4% YTD
Dow Jones Industrial Average +1.1% YTD
Russell 2000 -1.2% YTD
Market Snapshot
Dow 28837.46 +250.62 (0.88%)
Nasdaq 11876.19 +296.32 (2.56%)
SP 500 3534.22 +57.09 (1.64%)
10-yr Note 0/32 0.777
NYSE Adv 1821 Dec 1176 Vol 746.8 mln
Nasdaq Adv 1956 Dec 1333 Vol 3.8 bln
Industry Watch
Strong: Information Technology, Consumer Discretionary, Communication Services
Weak: Materials, Energy
Moving the Market
-- Apple (AAPL) and Amazon (AMZN) set the leadership pace ahead of iPhone 12, Prime Day events tomorrow
-- Stimulus impasse in Washington helped mega-caps regain leadership from the cyclical stocks
-- Momentum trading, fear of missing out
WTI crude futures lose 3% in value
12-Oct-20 15:25 ET
Dow +312.51 at 28899.35, Nasdaq +324.26 at 11904.13, S&P +65.57 at 3542.70
[BRIEFING.COM] The S&P 500 is up 1.9% and has extended its October gain to 5.4% and yearly gain to 9.7%.
One last look at the S&P 500 sectors shows information technology (+2.8%), communication services (+2.7%), and consumer discretionary (+2.3%) up more than 2.0%, while the materials sector (-0.01%) trades fractionally below its flat line.
WTI crude futures settled lower by 3.1%, or $1.26, to $39.34/bbl.
Stocks end strong week on positive note
09-Oct-20 16:15 ET
Dow +161.39 at 28586.84, Nasdaq +158.96 at 11579.87, S&P +30.31 at 3477.13
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 rose 0.9% on Friday and ended the week with a 3.8% gain, as investors remained enthused by reported progress in stimulus talks and positive corporate commentary. The Nasdaq Composite outperformed with a 1.4% gain, followed by 0.6% gains in the Dow Jones Industrial Average (+0.6%) and Russell 2000 (+0.6%).
The White House was reportedly drafting a $1.8 trillion stimulus bill, up from a prior $1.6 trillion and representing an about-face from the previous stance aimed at standalone relief bills. President Trump advocated in a radio interview for a bigger stimulus package than what both sides are offering.
Truthfully, the reaction in the market wasn't that impressive considering the news contributed to only a small bump in the S&P 500, which was already trading higher before the headlines. That might have been because Senate Majority Leader McConnell said beforehand that a deal might not happen before the election or perhaps the market was gassed out after a strong week.
Sector leaders today included consumer discretionary (+1.5%) and information technology (+1.5%) amid solid gains in the mega-caps and semiconductor stocks. The Philadelphia Semiconductor Index rose 1.8%. The energy (-1.6%), real estate (-0.3%), and utilities (-0.04%) sectors closed lower.
Within the semiconductor space, Xilinx (XLNX 120.94, +14.95, +14.1%) was reported to be in talks to be acquired by AMD (AMD 83.10, -3.41, -3.9%) for $30 billion, NXP Semi (NXPI 141.53, +6.70, +5.0%) raised Q3 revenue guidance above consensus, and Teradyne (TER 86.10, +3.62, +4.4%) was upgraded to Buy from Hold at Stifel.
Separately, Gilead Sciences (GILD 63.84, +0.52, +0.8%) said trial data for its remdesivir drug shortened the recovery time of COVID-19 patients by five days and significantly reduced death rates. The news strengthened the market's optimism surrounding coronavirus treatments and their potential impact on consumer sentiment.
U.S. Treasured ended the session on a lower note. The 2-yr yield increased three basis points to 0.16%, and the 10-yr yield increased one basis points to 0.78%. The U.S. Dollar Index fell 0.6% to 93.06. WTI crude futures fell 1.3%, or $0.54, to $40.64/bbl.
Friday's economic data was limited to wholesale inventories for August, which increased 0.4% (Briefing.com consensus 1.0%) following a revised 0.2% decline in July (from -0.3%). Investors will not receive any notable data on Monday.
Nasdaq Composite +29.1% YTD
S&P 500 +7.6% YTD
Dow Jones Industrial Average +0.2% YTD
Russell 2000 -1.9% YTD
Market Snapshot
Dow 28586.84 +161.39 (0.57%)
Nasdaq 11579.87 +158.96 (1.39%)
SP 500 3477.13 +30.31 (0.88%)
10-yr Note +1/32 0.771
NYSE Adv 1505 Dec 1460 Vol 851.3 mln
Nasdaq Adv 1957 Dec 1470 Vol 3.4 bln
Industry Watch
Strong: Information Technology, Consumer Discretionary, Health Care
Weak: Energy, Real Estate, Utilities, Financials
Moving the Market
-- White House will reportedly increase stimulus proposal to $1.8 trillion, versus a prior $1.6 trillion
-- Mega-caps, semiconductor stocks were among the day's leaders
-- Another round of upbeat corporate news
WTI crude futures trim weekly gains
09-Oct-20 15:30 ET
Dow +176.86 at 28602.31, Nasdaq +149.34 at 11570.25, S&P +31.22 at 3478.04
[BRIEFING.COM] The S&P 500 is up 0.9% and is on track to end the week higher by 3.9%.
One last look at the S&P 500 sectors shows consumer discretionary (+1.6%), information technology (+1.4%), and consumer staples (+0.9%) leading the market in gains, while the energy (-1.4%), real estate (-0.2%), and utilities (-0.1%) sectors trade lower. Every sector remains higher for the week.
WTI crude futures settled lower by 1.3%, or $0.54, to $40.64/bbl. For the week, the oil contract appreciated 9.9%, or $3.59.
Value stocks led the way on Thursday
08-Oct-20 16:20 ET
Dow +122.05 at 28425.45, Nasdaq +56.38 at 11420.91, S&P +27.38 at 3446.82
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 gained 0.8% on Thursday in a broad-based advance led by the value stocks. The Russell 2000 (+1.1%) outperformed once again, while the Nasdaq Composite (+0.5%) and Dow Jones Industrial Average (+0.4%) posted more modest gains.
Today felt like one of those lackluster days in a bull market in which nothing spectacular happened, but the net sum of developments helped preserve sentiment and trading momentum. News that House Speaker Pelosi will not support a standalone bill for airlines unless the White House commits to a larger stimulus package had the potential to rattle markets, but it didn't.
Airline stocks did decline from prior highs, but still closed higher like every sector in the S&P 500. Leadership was transferred to the value-oriented energy (+3.8%), utilities (+1.8%), real estate (+1.6%), and financials (+1.4%) sectors. The information technology sector (+0.5%) was an influential laggard.
IBM (IBM 131.49, +7.42, +6.0%) and the semiconductor stocks kept the tech sector afloat. IBM rose 6% after announcing plans to spin off its IT infrastructure unit, so it could focus on its hybrid cloud growth strategy. Taiwan Semiconductor (TSM 87.80, +0.88, +1.0%) sparked buying interest in the chip space after reporting strong revenue growth in September.
The Philadelphia Semiconductor Index rose 1.2% and got an added boost from On Semiconductor (ON 26.04, +2.69, +11.5%) after Starboard Value added the stock to its portfolio.
In other positive developments, crude prices ($41.18/bbl, +$1.22, +3.1%) rose 3%, Regeneron (REGN 599.88, +8.19, +1.4%) requested emergency use authorization for its COVID-19 antibody therapy, and Boeing (BA 168.00, +3.39, +2.1%) was reported to be in talks with Alaska Airlines (ALK 38.63, +1.61, +4.4%) for a potential 737 Max order.
Separately, Morgan Stanley (MS 49.00, +0.29, +0.6%) said it will acquire Eaton Vance (EV 60.65, +19.71, +48.1%) for approximately $7 billion, or $56.50 per share, in cash and stock.
U.S. Treasuries edged higher in a steady advance despite the gains in equities, which meant yields moved lower. The 2-yr yield decline two basis points to 0.13%, and the 10-yr yield declined two basis points to 0.77%. The U.S. Dollar Index finished little changed at 93.59.
Thursday's economic data featured the weekly initial claims report, which didn't produce any headline surprises:
Initial claims for the week ending October 3 decreased by 9,000 to 840,000 (Briefing.com consensus 830,000) from an upwardly revised 849,000 (from 837,000) in the prior week. Continuing claims for the week ending September 26 decreased by 1.003 million to 10.976 million from an upwardly revised 11.979 million (from 11.767 million) in the prior week.
The key takeaway from the report is that it isn't a complete picture since California is working through backlogged claims, but setting that point aside, the number of initial claims at this juncture is still exceedingly high and indicative of the ongoing demand challenges faced by U.S. businesses.
Looking ahead, investors will receive Wholesale Inventories for August on Friday.
Nasdaq Composite +27.3% YTD
S&P 500 +6.7% YTD
Dow Jones Industrial Average -0.4% YTD
Russell 2000 -2.4% YTD
Market Snapshot
Dow 28425.45 +122.05 (0.43%)
Nasdaq 11420.91 +56.38 (0.50%)
SP 500 3446.82 +27.38 (0.80%)
10-yr Note +3/32 0.766
NYSE Adv 2267 Dec 747 Vol 798.8 mln
Nasdaq Adv 2273 Dec 1132 Vol 3.5 bln
Industry Watch
Strong: Energy, Real Estate, Financials, Utilities
Weak: Information Technology, Consumer Discretionary
Moving the Market
-- Value stocks led broad-based advance
-- Encouraging round of corporate news supported recovery/coronavirus treatment optimism
-- Market was not bothered by negative-sounding stimulus news
WTI crude rallied 3%
08-Oct-20 15:25 ET
Dow +94.69 at 28398.09, Nasdaq +46.45 at 11410.98, S&P +24.94 at 3444.38
[BRIEFING.COM] The S&P 500 is up 0.7% and is now up 2.8% this week. The gains remain broad, although there are some tech laggards like Apple (AAPL 114.89, -0.19, -0.2%).
One last look at the S&P 500 sectors shows four sectors up at least 1.0%, including a 3.6% gain in the energy sector. The information technology sector is a rare underperformer with a 0.3% gain, which has limited today's index gains.
WTI crude futures settled higher by 3.1%, or $1.22, to $41.18/bbl.
Stocks rebound on stimulus, coronavirus optimism
07-Oct-20 16:20 ET
Dow +530.70 at 28293.46, Nasdaq +210.00 at 11364.53, S&P +58.50 at 3419.47
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 rose 1.7% on Wednesday, primarily driven by renewed stimulus hopes and secondarily coronavirus-related optimism. The Nasdaq Composite gained 1.9%, the Dow Jones Industrial Average gained 1.9%, and the Russell 2000 gained 2.1%.
After President Trump said he called off stimulus negotiations yesterday, he later clarified that he still wanted stimulus but in the form of standalone bills for airlines, small businesses, and citizens ($1200 payments). This jump-started the futures market, and news that Eli Lilly (LLY 148.96, +4.83, +3.4%) requested emergency use authorization for its COVID-19 antibody treatment supported the rebound effort.
Accordingly, airline and retail stocks were some of today's biggest gainers, but the wealth spread around to every sector in the S&P 500 and every Dow component. The cyclical materials (+2.6%), consumer discretionary (+2.5%), and industrials (+2.2%) sectors rose more than 2.0%. The real estate sector (+0.3%) underperformed.
Inside the communication services sector (+0.9%), Netflix (NFLX 534.66, +28.79, +5.7%) rallied nearly 6% after Pivotal Research Group raised its price target on the stock to a Street-high $650 from $600. Facebook (FB 258.12, -0.54, -0.2%) was excluded from today's gains amid antitrust concerns stemming from a report from the House antitrust committee.
Essentially, today was a reset to yesterday's highs before President Trump upset the market with tweets. The S&P 500 closed back above its ascending 50-day moving average (3372).
Separately, the FOMC Minutes for the Sept. 15-16 meeting provided no surprises. Fed officials expressed concerns regarding a recovery if there is no more fiscal stimulus and remained in agreement that the current environment is disinflationary.
U.S. Treasuries finished lower on the longer-end of the curve, sending those yields back to their highest levels of the week. The 2-yr yield finished unchanged at 0.15%, while the 10-yr yield increased four basis points to 0.79%. The U.S. Dollar Index finished flat at 93.64. WTI crude declined 1.8%, or $0.71, to $39.96/bbl.
Reviewing Wednesday's economic data:
Consumer credit contracted by $7.2 billion in August (Briefing.com consensus $14.1 billion) after increasing an upwardly revised $14.7 bln (from $12.3 billion) in July.
The key takeaway from the report is that August marked the sixth straight monthly contraction in revolving credit, which is something that hasn't happened since late 2010 - early 2011, underscoring the more restrictive credit stance adopted by lenders in the wake of the COVID shutdown and rise in unemployment.
The weekly MBA Mortgage Applications Index increased 4.6% following a 4.8% decline in the prior week.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index and the NFIB Small Business Optimism Index for September on Thursday.
Nasdaq Composite +26.7% YTD
S&P 500 +5.8% YTD
Dow Jones Industrial Average -0.8% YTD
Russell 2000 -3.4% YTD
Market Snapshot
Dow 28293.46 +530.70 (1.91%)
Nasdaq 11364.53 +210.00 (1.88%)
SP 500 3419.47 +58.50 (1.74%)
10-yr Note -4/32 0.785
NYSE Adv 21718 Dec 819 Vol 879.0 mln
Nasdaq Adv 2549 Dec 797 Vol 3.9 bln
Industry Watch
Strong: Materials, Financials, Industrials, Consumer Discretionary
Weak: Communication Services, Energy, Real Estate
Moving the Market
-- President Trump says he still wants standalone relief bills for airlines, small businesses, and citizens
-- Coronavirus treatment optimism
-- Stocks rebound, Treasuries decline
-- Cyclical leadership
WTI crude pulls back modestly
07-Oct-20 15:30 ET
Dow +577.27 at 28340.03, Nasdaq +211.58 at 11366.11, S&P +62.10 at 3423.07
[BRIEFING.COM] The S&P 500 continues to trade higher by 1.8% in a steady, broad-based advance. The Russell 2000 is up 2.3%, extending its monthly outperformance.
One last look at the S&P 500 sectors shows green across the board. Five sectors are up at least 2.0%, including materials (+2.8%), while the real estate sector (+0.7%) continues to lag with a 0.7% gain.
WTI crude futures settled lower by 1.8%, or $0.71, to $39.96/bbl.
Stocks fall on disappointing stimulus news
06-Oct-20 16:20 ET
Dow -375.88 at 27762.76, Nasdaq -177.88 at 11154.53, S&P -47.66 at 3360.94
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 fell 1.4% on Tuesday after President Trump said he called off stimulus negotiations until after the election. Prior to the news, the benchmark index was up 0.7% late in the day amid leadership from its cyclical sectors on growing expectations for a fiscal relief bill.
The Nasdaq Composite declined 1.6%, and the Dow Jones Industrial Average declined 1.3%. The Russell 2000 declined just 0.3% after rallying as much as 2.4% intraday.
Specifically, President Trump said the Republican $1.6 trillion bill was "very generous" but was upset that House Speaker Pelosi was not negotiating in "good faith." Whether the president felt emboldened by the rising stock market to flex a negotiating tactic is debatable, but the prospect of waiting even longer for stimulus because of political wrangling was detrimental for sentiment and stock performance.
The energy sector, which was up as much as 2.0% amid higher oil prices ($40.67/bbl, +1.38, +3.5%), relinquished its leadership position and declined 1.5%. The influential losses, however, came from the information technology (-1.6%), consumer discretionary (-2.1%), and communication services (-2.0%) sectors due to the daylong underperformance in their mega-cap components.
Investors returned to the Treasury market where longer-dated yields had been on the rise on stimulus hopes. The 2-yr yield increased one basis point to 0.15%, while the 10-yr yield declined two basis points to 0.74% after touching 0.79% at its intraday high. The U.S. Dollar Index increased 0.2% to 93.70.
Fed Chair Powell made it clear today, if not already, of the need for further fiscal relief. There is still hope among some investors that the president will change his tune, and it's worth pointing out the S&P 500 remained positive for the week. The benchmark index, however, did close back below its 50-day moving average (3368).
Separately, Boeing (BA 159.54, -11.66, -6.8%) and General Electric (GE 6.17, -0.24, -3.7%) were pressured by additional headwinds. Boeing cut its demand forecast for commercial airplanes in the next decade by 11%, versus 2019 estimates. GE disclosed the SEC could take action against the company for possible violations of securities laws.
NVIDIA (NVDA 549.46, +3.76, +0.7%) was a notable exception today after its price target was raised to $650 from $565 at BMO Capital Markets.
Reviewing Tuesday's economic data:
The trade deficit widened to $67.1 billion in August (Briefing.com consensus -$66.2 billion) from an upwardly revised $63.4 billion (from -$63.6 billion) in July. The widening deficit was a function of imports increasing more than exports.
The key takeaway from the report is the understanding that it reflects a pickup in trade activity from the pandemic lows, yet it is also a reminder of just how damaging the pandemic has been on trade activity. Year-over-year, average exports decreased $44.8 billion from the three months ending August 2019 while average imports decreased $34.7 billion.
August job openings decreased to 6.493 mln from a revised 6.697 mln in July (from 6.618 mln).
Looking ahead, investors will receive the FOMC Minutes from the Sept. 15-16 meeting, Consumer Credit for August, and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +24.3% YTD
S&P 500 +4.0% YTD
Dow Jones Industrial Average -2.7% YTD
Russell 2000 -5.5% YTD
Market Snapshot
Dow 27762.76 -375.88 (-1.34%)
Nasdaq 11154.53 -177.88 (-1.57%)
SP 500 3360.94 -47.66 (-1.40%)
10-yr Note +4/32 0.747
NYSE Adv 1158 Dec 1818 Vol 992.0 mln
Nasdaq Adv 1394 Dec 1945 Vol 4.3 bln
Industry Watch
Strong: Utilities
Weak: Consumer Discretionary, Communication Services, Information Technology, Energy
Moving the Market
-- Stocks fall after President Trump said he called off stimulus negotiations until after election
-- Mega-caps underperformed all session, well before the disappointing stimulus news
-- Small-caps outperformed on a relative basis
WTI crude future settle above $40 per barrel
06-Oct-20 15:25 ET
Dow -339.94 at 27798.70, Nasdaq -156.47 at 11175.94, S&P -42.75 at 3365.85
[BRIEFING.COM] The S&P 500 is down 1.3% and is trading near session lows. The Russell 2000 is down 0.1% after trading higher by more than 2.0% a short time ago.
One last look at the S&P 500 sectors shows consumer discretionary (-2.0%), energy (-1.5%), and communication services (-1.8%) leading the decline, while the utilities sector (+0.6%) continues to outperform in positive territory. The energy sector was up 2.0% earlier.
WTI crude futures settled higher by 3.5%, or $1.38, to $40.67/bbl. Prices have retraced some gains after the President's stimulus tweet.
Stocks rise and Treasuries fall in risk-on day
05-Oct-20 16:15 ET
Dow +465.83 at 28138.64, Nasdaq +257.47 at 11332.41, S&P +60.18 at 3408.60
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 rose 1.8% on Monday in a risk-on trade, as investors received positive news on President Trump's health, stimulus talks, and economic data. The Dow Jones Industrial Average (+1.7%) kept pace with the benchmark index, but the advantage today belonged to the Nasdaq Composite (+2.3%) and Russell 2000 (+2.8%).
Briefly, President Trump said he would leave the hospital tonight after responding well to several coronavirus treatments, including one from Regeneron (REGN 605.08, +40.28, +7.1%); House Speaker Pelosi and Treasury Secretary Mnuchin reportedly made progress on relief talks; and the ISM Non-Manufacturing Index for September increased to 57.8% (Briefing.com consensus 55.6%) from 56.9% in August.
The news cycle fueled a growth mindset that lifted all 11 S&P 500 sectors into positive territory, boosted small-cap stocks, buoyed crude prices ($39.29/bbl, +2.24, +6.1%) by 6%, and steepened the U.S. Treasury yield curve amid selling in longer-dated maturities.
The energy (+2.9%), information technology (+2.3%), and health care (+2.1%) sectors claimed today's leadership positions with gains over 2.0%. The real estate sector underperformed with a 0.6% gain, but the rate-sensitive space had traded lower for most of the session amid the higher Treasury yields.
The 2-yr yield increased one basis point to 0.14%, while the 10-yr yield rose six basis points to 0.76% -- its highest closing level since June. The U.S. Dollar Index fell 0.4% to 93.46.
Another positive factor for trading sentiment was the S&P 500 clearing its 50-day moving average (3365) at the open and never looking back the rest of the session. The benchmark index also topped the 3400 level for the first time since mid-September.
In corporate news, Bristol Myers Squibb (BMY 59.20, +0.48, +0.8%) agreed to acquire MyoKardia (MYOK 220.34, +80.74, +57.8%) for approximately $13 billion, or $225.00/share, in cash.
Reviewing Monday's economic data:
The ISM Non-Manufacturing Index for September increased to 57.8% (Briefing.com consensus 55.6%) from 56.9% in August. Notably, the September index eclipsed the 57.3% reading registered in February.
The key takeaway from the report is that it had all the right undertones to promote recovery views: new orders increased, the backlog of orders decreased, supplier deliveries slowed, prices were up, albeit at a slower pace, and employment levels grew following six months of contraction.
The Markit Services PMI for September increased to 54.6 from 55.0 in August.
Looking ahead, investors will receive the Trade Balance report for August and the JOLTS - Job Openings report for August on Tuesday.
Nasdaq Composite +26.3% YTD
S&P 500 +5.5% YTD
Dow Jones Industrial Average -1.4% YTD
Russell 2000 -5.2% YTD
Market Snapshot
Dow 28138.64 +465.83 (1.68%)
Nasdaq 11332.41 +257.47 (2.32%)
SP 500 3408.60 +60.18 (1.80%)
10-yr Note -29/32 0.771
NYSE Adv 2255 Dec 763 Vol 849.2 mln
Nasdaq Adv 2584 Dec 889 Vol 3.5 bln
Industry Watch
Strong: Energy, Information Technology, Health Care, Materials
Weak: Real Estate
Moving the Market
-- Risk-on day following positive news on President Trump's health, stimulus talks, economic data
-- Strength in the energy, technology, and health care sectors
-- WTI crude futures rebound 6%, Treasury curve steepens due to selling on longer-end of curve
WTI crude futures rebound 6%
05-Oct-20 15:25 ET
Dow +450.93 at 28123.74, Nasdaq +240.98 at 11315.92, S&P +57.82 at 3406.24
[BRIEFING.COM] The S&P 500 is trading at fresh session highs with a 1.7% gain and above the 3400 level.
One last look at the S&P 500 sectors shows all 11 groups trading higher, with real estate (+0.4%) emerging into positive territory this afternoon. The energy (+2.4%), materials (+2.2%), information technology (+2.1%), and health care (+2.1%) sectors are up more than 2.0%.
Energy stocks are drawing additional support from the sharp increase in oil prices. WTI crude futures settled sharply higher by 6.1%, or $2.24, to $39.29/bbl.
Down day for large-caps after President Trump tests positive for coronavirus
02-Oct-20 16:15 ET
Dow -134.09 at 27672.81, Nasdaq -251.59 at 11074.94, S&P -32.38 at 3348.42
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 fell 1.0% on Friday, but it was down as much as 1.7% after President Trump said he tested positive for COVID-19. Stimulus optimism boosted many value/cyclical stocks, which partially offset weakness in the information technology sector (-2.6%).
The Nasdaq Composite underperformed with a 2.2% decline, clipped by steep losses in mega-caps like Apple (AAPL 113.02, -3.77, -3.2%) and Tesla (TSLA 415.09, -33.07, -7.4%). The Dow Jones Industrial Average declined 0.5%, while the Russell 2000 gained 0.5%.
Generally, the market was caught up in the uncertainty on what President Trump's diagnosis would mean for the economy and other political issues. House Speaker Pelosi said the situation changed the dynamic on fiscal relief, which some investors interpreted a motivating factor to get a deal done, especially after a relatively disappointing September employment report.
Cyclical sectors showed relative outperformance early in the day and later gained steam on hopeful-sounding stimulus commentary that suggested Ms. Pelosi and Treasury Secretary Mnuchin were making serious progress towards a deal. Talks could continue this weekend with differences still remaining.
The industrials (+1.1%), energy (+1.0%), materials (+0.8%), and financials (+0.7%) sectors represented the cyclical gains. The real estate sector (+1.6%) advanced the most, though. Conversely, the same enthusiasm didn't apply to the mega-caps and other technology stocks, which outperformed the previous day.
Touching on the jobs data, which was understandably drowned out in today's health concerns and stimulus news, the headline nonfarm payrolls figure was 661,000 (Briefing.com consensus 800,000). The unemployment rate declined to 7.9% (Briefing.com consensus 8.2%) from 8.4% in August, but the labor force participation rate fell to 61.4% from 61.7%.
Longer-dated Treasuries moved higher following the report but pulled back into negative territory during the day. The 2-yr yield was flat at 0.13%, and the 10-yr yield increased two basis points to 0.70% after touching 0.65% at its low. The U.S. Dollar Index increased 0.1% to 93.84.
In other interesting developments, the S&P 500 closed below its 50-day moving average (3362), and WTI crude futures dropped 4.3%, or $1.66, to $37.05/bbl -- but the weaker prices didn't drag on the energy stocks.
Reviewing Friday's economic data:
The September employment report was relatively disappointing. Granted the unemployment rate dropped to 7.9% from 8.4%, but the offset to that seemingly good news is that the labor force participation rate fell to 61.4% from 61.7%. September nonfarm payrolls increased by 661,000 (Briefing.com consensus 800,000).
The key takeaway from the report is that it will contribute to concerns that the labor market recovery process is becoming more arduous and that the risk of permanent job losses is increasing with the absence of a stimulus plan and lower aggregate demand at small businesses.
The final University of Michigan Index of Consumer Sentiment for September ticked up to 80.4 (Briefing.com consensus 79.0) from the preliminary reading of 78.9. The final reading for August was 74.1.
The key takeaway from the report is that the improvement was attributed largely to improved attitudes about the outlook for the economy among upper-income households.
Factory orders in August increased 0.7% m/m (Briefing.com consensus 1.2%) following an upwardly revised 6.5% increase (from 6.4%) in July.
The key takeaway from the report is the affirmation that business spending continued to increase in August, evidenced by a 1.9% increase in new orders for nondefense capital goods excluding aircraft, versus a 2.6% increase in July.
Looking ahead, investors will receive the ISM Non-Manufacturing Index for September on Monday.
Nasdaq Composite +23.4% YTD
S&P 500 +3.6% YTD
Dow Jones Industrial Average -3.0% YTD
Russell 2000 -7.7% YTD
Market Snapshot
Dow 27672.81 -134.09 (-0.48%)
Nasdaq 11074.94 -251.59 (-2.22%)
SP 500 3348.42 -32.38 (-0.96%)
10-yr Note -1/32 0.692
NYSE Adv 1866 Dec 1135 Vol 901.1 mln
Nasdaq Adv 1609 Dec 1675 Vol 3.7 bln
Industry Watch
Strong: Materials, Industrials, Financials, Energy, Real Estate, Utilities
Weak: Information Technology, Communication Services, Consumer Discretionary
Moving the Market
-- Down day for large-caps after President Trump tests positive for COVID-19
-- Hopeful-sounding stimulus commentary boosts value/cyclical stocks
-- Pronounced weakness in the information technology sector
-- September nonfarm payrolls increased by 661,000 (Briefing.com consensus 800,000), unemployment rate was 7.9% (Briefing.com consensus 8.2%)
WTI crude drops 4%, but energy stocks still outperforming
02-Oct-20 15:30 ET
Dow -42.91 at 27763.99, Nasdaq -213.68 at 11112.85, S&P -20.71 at 3360.09
[BRIEFING.COM] The S&P 500 continues to trade lower by 0.6% in a mixed trading session. Advancing issues outpace declining issues at the NYSE but not in the Nasdaq.
One last look at the S&P 500 sectors shows the top-weighted information technology down 2.2%, which is weighing heavily on the performance of the benchmark index. Conversely, the energy (+1.4%), materials (+1.4%), real estate (+1.6%), and utilities (+1.4%) sectors are up the most.
WTI crude futures settled sharply lower by 4.3%, or $1.66, to $37.05/bbl.
Tech stocks lift market amid stimulus bill uncertainty
01-Oct-20 16:15 ET
Dow +35.20 at 27806.90, Nasdaq +159.00 at 11326.53, S&P +17.80 at 3380.80
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 gained 0.5% on Thursday, as strength in technology stocks outweighed losses in cyclical stocks amid stimulus bill uncertainty. The tech-sensitive Nasdaq Composite rose 1.4%, and the small-cap Russell 2000 rose 1.6%. The Dow Jones Industrial Average increased just 0.1%.
The session highs for the S&P 500 (+1.0%) came shortly after the open on reports that suggested Treasury Secretary Mnuchin and House Speaker Pelosi were narrowing their stimulus disagreements. Follow-up reports, however, indicated that distance remains between both sides. The benchmark index wavered with smaller gains for the rest of the day.
Technology stocks weren't hit by the stimulus headlines, as investors presumably bid up shares to find growth in case there is no stimulus or to benefit from growth if there is stimulus. Many of these stocks were found in the consumer discretionary (+1.5%), communication services (+1.4%), and information technology (+1.0%) sectors.
Amazon (AMZN 3221.26, +72.53, +2.3%) outperformed, aided by Pivotal Research Group raising its AMZN price target to a Street-high $4500. The Philadelphia Semiconductor Index (+2.1%) got an added boost from STMicroelectronics (STM 33.21, +2.52, +8.2%) after it issued upside revenue guidance.
The stimulus uncertainty, however, negatively affected the cyclical stocks on worries that extended time without fiscal relief could slow down a recovery. The energy sector dropped 3.1% amid reeling oil prices ($38.71/bbl, -1.50, -3.7%), followed by materials (-1.4%) and industrials (-0.3%). The health care sector (-0.5%) also closed lower.
In addition, today's economic data didn't instill confidence in these sectors. Weekly jobless claims remained elevated at 837,000 (Briefing.com consensus 850,000), personal income declined 2.7% m/m in August (Briefing.com consensus -2.0%), and the ISM Manufacturing Index for September decelerated to 55.4% (Briefing.com consensus 56.0%) from 56.0% in August.
For what it's worth, the S&P 500 found support at its ascending 50-day moving average (3359) after it briefly dipped into negative territory. It closed above the technical level for the second straight day.
U.S. Treasuries finished little changed, with longer-dated maturities reclaiming their early losses. The 2-yr yield was flat at 0.13%, and the 10-yr yield was flat at 0.68%. The U.S. Dollar Index declined 0.2% to 93.70.
Reviewing Thursday's economic data, which included several key reports on unemployment, manufacturing, and inflation:
The ISM Manufacturing Index for September checked in at 55.4% (Briefing.com consensus 56.0%) versus 56.0% in August.
The key takeaway from the report is that it underscores the view that the manufacturing sector continues to recover after its sharp downturn in the April-May period when the index was running at 41.5% and 43.1%, respectively.
Initial claims for the week ending September 26 declined by 36,000 to 837,000 (Briefing.com consensus 850,000) while continuing claims for the week ending September 19 decreased by 980,000 to 11.767 million.
The key takeaway from the report remains the same: initial claims continue to run at excessively high levels that speak to the ongoing challenges businesses face getting back to pre-pandemic levels.
Personal income declined 2.7% m/m in August (Briefing.com consensus -2.0%) following an upwardly revised 0.5% increase (from 0.4%) in July. Personal spending increased 1.0% (Briefing.com consensus 0.6%) following a downwardly revised 1.5% increase (from 1.9%) in July. The PCE Price Index and Core PCE Price Index were both up 0.3% m/m, as expected. That left the year-over-year increases for the Fed's preferred inflation gauge at 1.4% and 1.6%, respectively.
The expiration of enhanced unemployment benefits helps explain the big drop in personal income, yet the key takeaway from the report is that consumers appear to be spending more out of savings now, evidenced by the increase in spending and the concurrent drop in the personal savings rate (to 14.1% from 17.7%).
Total construction spending increased 1.4% m/m in August (Briefing.com consensus +0.8%) on the heels of an upwardly revised 0.7% increase (from +0.1%) in July. The key takeaway from the report is that total construction spending, despite the economic challenges posed by the coronavirus, was up 2.5% year-over-year.
Looking ahead to Friday, investors will receive the Employment Situation Report for September, the revised University of Michigan Index of Consumer Sentiment for September, Factory Orders for August, and auto and truck sales for September.
Nasdaq Composite +26.2% YTD
S&P 500 +4.6% YTD
Dow Jones Industrial Average -2.5% YTD
Russell 2000 -8.2% YTD
Market Snapshot
Dow 27806.90 +35.20 (0.13%)
Nasdaq 11326.53 +159.00 (1.42%)
SP 500 3380.80 +17.80 (0.53%)
10-yr Note +1/32 0.677
NYSE Adv 2039 Dec 933 Vol 859.1 mln
Nasdaq Adv 2213 Dec 1141 Vol 3.9 bln
Industry Watch
Strong: Information Technology, Communication Services, Consumer Discretionary, Real Estate
Weak: Energy, Materials, Health Care, Industrials
Moving the Market
-- Technology stocks lift market amid stimulus bill uncertainty
-- Cyclical sectors lagged, additionally pressured by mixed economic data
-- Technical support
WTI crude falls nearly 4%, hit energy stocks
01-Oct-20 15:25 ET
Dow -44.29 at 27727.41, Nasdaq +133.30 at 11300.83, S&P +7.96 at 3370.96
[BRIEFING.COM] The S&P 500 is up 0.3%, while the Russell 2000 outperforms with a 1.3% gain.
One last look at the sectors shows mixed results. The consumer discretionary (+1.4%) and communication services (+1.3%) sectors are up more than 1.0%, while the energy (-3.6%) and materials (-1.2%) sectors are down more than 1.0%. Energy stocks have gotten hit by another decline in oil prices.
WTI crude futures settled sharply lower by 3.7%, or $1.50, to $38.71/bbl. Investors remained concerned about future demand.
Quarter ends on positive note
30-Sep-20 16:20 ET
Dow +329.04 at 27771.70, Nasdaq +82.26 at 11167.53, S&P +27.53 at 3363.00
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 gained 0.8% on Wednesday in a busy news day, wrapping up a negative month and a positive third quarter. The Dow Jones Industrial Average outperformed with a 1.2% gain, the Russell 2000 underperformed with a 0.2% gain, and the Nasdaq Composite (+0.7%) performed comparably to the benchmark index.
The session opened modestly higher, as the futures market shook off any residential weakness that followed the first presidential debate. Cyclical sectors were leaders throughout the morning and early afternoon, largely due to better-than-expected economic data and renewed stimulus optimism.
The stimulus optimism was stirred by hopeful-sounding commentary from House Speaker Pelosi, White House Chief of Staff Meadows, and Treasury Secretary Mnuchin, but the market later got upset on news that Senate Majority Leader McConnell said both sides remain far apart. Ms. Pelosi and Mr. Mnuchin met for 90 minutes but did not agree to a deal.
In about one hour of trading, the S&P 500 cut its gain to 0.2% from 1.7% with the industrials (-0.3%) and energy (-0.2%) sectors slipping into negative territory. Buyers stepped in, though, and helped the S&P 500 close above its 50-day moving average (3357), which was an important observation for traders.
The health care (+1.7%), consumer staples (+1.2%), financials (+1.2%), and information technology (+0.9%) sectors were among today's biggest winners.
Regarding today's data, the ADP Employment Change Report for September, the Chicago PMI for September, and the Pending Home Sales report for August each came in stronger than expected. While not typically market-moving events by themselves, the batch of data did finally contribute to some movement in U.S. Treasuries (to the downside).
The 2-yr yield increased two basis points to 0.13%, and the 10-yr yield increased three basis points to 0.68%. The U.S. Dollar Index declined 0.1% to 93.84. WTI crude futures rose 2.6%, or $1.01, to $40.21/bbl.
In key corporate news, Walt Disney (DIS 124.13, -1.27, -1.0%) announced plans to lay off 28,000 employees due to the coronavirus still negatively impacting its business. Micron (MU 46.96, -3.75, -7.4%) issued downside EPS guidance for its fiscal first quarter.
Reviewing Wednesday's economic data:
The third estimate for Q2 GDP produced a slight upward revision to -31.4% q/q annualized (Briefing.com consensus -31.7%) from the second estimate of -31.7%. The GDP Price Deflator was also revised higher to -1.8% (Briefing.com consensus -2.0%) from -2.0%.
The key takeaway from the report is that it won't matter to the market given its dated nature, but it still matters in the sense that, despite the slight revision, the second quarter of 2020 marked the biggest downturn for the U.S. economy on record.
The ADP Employment Change report for September estimated 749,000 jobs were added to private-sector payrolls (Briefing.com consensus 600,000). The August reading was revised higher to 481,000 from 428,000.
The Chicago PMI for September surged above expectations to 62.4% (Briefing.com consensus 53.0%) from 51.2% in August.
Pending home sales jumped 8.8% in August (Briefing.com consensus 3.2%) following a 5.9% increase in July.
The weekly MBA Mortgage Applications declined 4.8% following a 6.8% increase in the prior week.
Looking ahead, investors will receive the ISM Manufacturing Index for September, the Personal Income and Spending report for August, the weekly Initial and Continuing Claims report, and Construction Spending for August on Thursday.
Nasdaq Composite +24.5% YTD
S&P 500 +4.1% YTD
Dow Jones Industrial Average -2.7% YTD
Russell 2000 -9.6% YTD
Market Snapshot
Dow 27771.70 +329.04 (1.20%)
Nasdaq 11167.53 +82.26 (0.74%)
SP 500 3363.00 +27.53 (0.83%)
10-yr Note -3/32 0.682
NYSE Adv 1546 Dec 1422 Vol 1.3 bln
Nasdaq Adv 1580 Dec 1714 Vol 4.2 bln
Industry Watch
Strong: Health Care, Consumer Staples, Financials
Weak: Industrials, Energy
Moving the Market
-- Stocks close mostly higher, wrap up negative month and positive quarter
-- Back-and-forth on stimulus prospects
-- Better-than-expected economic data
No deal on stimulus but talks will continue -- CNBC
30-Sep-20 15:25 ET
Dow +201.33 at 27643.99, Nasdaq +36.24 at 11121.51, S&P +13.02 at 3348.49
[BRIEFING.COM] The S&P 500 is trading near session lows with a 0.3% gain and back below its 50-day moving average (3357).
According to CNBC, House Speaker Pelosi and Treasury Secretary Mnuchin failed to reach an agreement on a stimulus deal, but talks will continue. Both met for 90 minutes, and although the market wasn't expecting a deal today, the negative-sounding headline has fueled the recent downturn.
WTI crude futures settled higher by 2.6%, or $1.01, to $40.21/bbl.
Stocks close lower ahead of presidential debate
29-Sep-20 16:15 ET
Dow -131.40 at 27442.66, Nasdaq -32.28 at 11085.27, S&P -16.13 at 3335.47
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 0.5% on Tuesday in a relatively lackluster session. The Nasdaq Composite (-0.3%), Dow Jones Industrial Average (-0.5%), and Russell 2000 (-0.4%) didn't stray too far away from the benchmark index.
The session was lackluster in the sense that there appeared to be a tacit agreement among participants to restrain conviction until tonight's presidential debate. Trading volume was lighter than usual. In another sense, today was a consolidation day following a two-day rebound in the market.
Sellers, meanwhile, made their presence known in the S&P 500 energy (-2.7%) and financials (-1.2%) sectors, more so the energy space given its outsized decline amid weaker oil prices ($39.20, -1.34, -3.3%). The communication services sector (+0.3%) was the only sector that closed higher, thanks to a 2% gain in Facebook (FB 261.79, +4.97, +1.9%).
The Philadelphia Semiconductor Index (+0.2%) also eked out a gain. Micron (MU 50.71, +0.99, +2.0%) rose 2% ahead of its earnings report after the close.
In other developments, the S&P 500's 50-day moving average (3355) provided technical resistance for the second straight day, the Conference Board's Consumer Confidence Index jumped to 101.8 in September (Briefing.com consensus 88.5) from an upwardly revised 86.3 (from 84.8) in August, and House Democrats introduced a $2.2 trillion stimulus bill.
While the $2.2 trillion price tag is still considered too high by Republicans, reports indicated that House Speaker Pelosi will continue talks with Treasury Secretary Mnuchin on Wednesday. With that said, the lack of a fiscal relief bill did not suppress consumer confidence this month due to an improving economy and lower coronavirus infection rates.
Elsewhere, defensive positions were taken in U.S. Treasuries, which pushed yields lower, and gold futures ($1903.20, +21.20, +1.1%). The 2-yr yield declined three basis points to 0.11%, and the 10-yr yield declined two basis points to 0.65%. The U.S. Dollar Index fell 0.4% to 93.91.
Reviewing Tuesday's economic data:
The Conference Board's Consumer Confidence Index jumped to 101.8 in September (Briefing.com consensus 88.5) from an upwardly revised 86.3 (from 84.8) in August. In February 2020, the index stood at 132.6.
The key takeaway from the report is the disclosure that consumers, bolstered by improved business and labor market conditions, expressed greater optimism about their short-term financial prospects, which could be a welcome support factor for consumer spending activity in the fourth quarter.
The S&P Case-Shiller Home Price Index increased 3.9% in July (Briefing.com consensus 3.9%) following a 3.5% increase in June.
The advance international trade in goods deficit totaled $82.9 bln in August following a $80.1 bln deficit in July. Advance wholesale inventories increased 0.5% in August following a 0.1% decline in July. Advance retail inventories increased 0.9% following a revised 1.2% increase in July (from +0.6%).
Looking ahead, investors will receive the ADP Employment Change Report for September, the Chicago PMI for September, the third estimate for Q2 GDP, Pending Home Sales for August, and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +23.6% YTD
S&P 500 +3.2% YTD
Dow Jones Industrial Average -3.8% YTD
Russell 2000 -9.8% YTD
Market Snapshot
Dow 27442.66 -131.40 (-0.48%)
Nasdaq 11085.27 -32.28 (-0.29%)
SP 500 3335.47 -16.13 (-0.48%)
10-yr Note +2/32 0.645
NYSE Adv 1105 Dec 1876 Vol 701.0 mln
Nasdaq Adv 1637 Dec 1764 Vol 3.3 bln
Industry Watch
Strong: Communication Services, Utilities
Weak: Energy, Financials, Industrials
Moving the Market
-- Stock market trades lower after rising sharply over past two sessions
-- Wait-and-see mindset ahead of tonight's presidential debate
-- Trading volume was lighter than usual
WTI crude falls back below $40/bbl
29-Sep-20 15:30 ET
Dow -69.29 at 27504.77, Nasdaq -22.87 at 11094.68, S&P -9.71 at 3341.89
[BRIEFING.COM] The S&P 500 continues to trade lower by 0.3% and has traded lower for most of the session.
One last look at the S&P 500 sectors shows energy down 2.5%, easily claiming today's laggard position over the financials sector (-0.8%). The utilities (+0.3%), communication services (+0.2%), and health care (+0.1%) sectors edge higher.
WTI crude futures settled back below $40/bbl, falling 3.3% (-$1.34) to $39.20/bbl.
Stocks rise in broad-based advance
28-Sep-20 16:20 ET
Dow +410.10 at 27574.06, Nasdaq +203.96 at 11117.55, S&P +53.14 at 3351.60
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 rose 1.6% on Monday in a broad-based advance. The small-cap Russell 2000 (+2.4%) and S&P MidCap 400 (+2.4%) outperformed with 2.4% gains, followed by the Nasdaq Composite (+1.9%) and Dow Jones Industrial Average (+1.5%).
All 11 sectors within the S&P 500 ended the day in positive territory, with energy (+2.3%), financials (+2.3%), consumer discretionary (+2.2%), and information technology (+1.9%) finishing atop the standings. The utilities sector (+0.3%) was today's laggard.
Value/cyclical stocks had a nice advantage for most of the day, until the technology stocks narrowed the gap later in the session. Apple (AAPL 114.96, +2.68, +2.4%), for instance, finished higher by 2.4% after being up just 0.5% in the morning.
Analyst upgrades, M&A activity, and another positive vaccine update from Johnson & Johnson (JNJ 147.11, +1.45, +1.0%) were corporate-related drivers of sentiment for many cyclical stocks. Other positive factors were House Speaker Pelosi saying a stimulus bill is still possible and quarter-end rebalancing, which favored the financial and energy sectors.
A separate viewpoint was rooted more in technical observation than news. The lack of volatility, and market-moving events, suggested today was a momentum trade from Friday, with performance aided by a recognition the S&P 500 and Dow had declined for four straight weeks.
Notably, the S&P 500 closed below its 50-day moving average (3353) despite spending a healthy portion of the afternoon above the key technical level.
U.S. Treasuries were stagnant during today's stock market gains. The 2-yr yield increased one basis point to 0.14%, and the 10-yr yield was unchanged at 0.66%. The U.S. Dollar Index declined 0.4% to 94.27. WTI crude futures rose 0.7%, or $0.29, to $40.54/bbl.
Investors did not receive any economic data on Monday. The Conference Board's Consumer Confidence Index for September, the S&P Case-Shiller Home Price Index for July, and the Advance August reports for Intl Trade in Goods, Retail Inventories, and Wholesale Inventories will be released on Tuesday.
Nasdaq Composite +23.9% YTD
S&P 500 +3.7% YTD
Dow Jones Industrial Average -3.3% YTD
Russell 2000 -9.5% YTD
Market Snapshot
Dow 27574.06 +410.10 (1.51%)
Nasdaq 11117.55 +203.96 (1.87%)
SP 500 3351.60 +53.14 (1.61%)
10-yr Note 0/32 0.663
NYSE Adv 2546 Dec 467 Vol 845.5 mln
Nasdaq Adv 2520 Dec 811 Vol 3.5 bln
Industry Watch
Strong: Energy, Financials, Information Technology, Consumer Discretionary
Weak: Utilities
Moving the Market
-- Broad-based gains to start the week
-- Analyst upgrades, M&A activity, quarter-end rebalancing, and vaccine news help lift cyclical stocks
-- General trading momentum
WTI crude stays above $40 per barrel
28-Sep-20 15:25 ET
Dow +460.60 at 27624.56, Nasdaq +200.23 at 11113.82, S&P +58.14 at 3356.60
[BRIEFING.COM] The S&P 500 is up 1.7% in a relatively benign advance. Unlike last week, there hasn't been that much volatility today.
One last look at the S&P 500 sectors shows all 11 sectors still trading higher. Energy (+2.8%), financials (+2.6%), and consumer discretionary (+2.3%) remain in the lead, while the utilities sector (+0.6%) continues to lag. The Philadelphia Semiconductor Index also shows strength with a 2.7% gain.
WTI crude futures settled higher by 0.7%, or $0.29, to $40.54/bbl.
S&P 500 ends negative week on high note
25-Sep-20 16:15 ET
Dow +358.52 at 27163.96, Nasdaq +241.30 at 10913.59, S&P +51.87 at 3298.46
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 gained 1.6% on Friday in a technology-led advance, ending a negative week on a high note. The Nasdaq Composite rose 2.3%, the Dow Jones Industrial Average rose 1.3%, and the Russell 2000 rose 1.6%.
The session started mixed, little changed, choppy, and without leadership amid a host of ongoing uncertainties in the market. Those uncertainties, some of which pertain to politics and the economy, weren't cleared up today due to few macro developments, but it appeared the market wasn't going to get dismayed by the unknown.
On no specific news, Apple (AAPL 112.29, +4.07, +3.8%), Microsoft (MSFT 207.82, +4.63, +2.3%), and NVIDIA (NVDA 514.95, +21.03, +4.3%) -- to name few technology mega-caps -- assumed their old leadership roles. The gains broadened out to ten of the 11 S&P 500 sectors by the close.
The top-weighted information technology sector (+2.4%) finished atop the standings with a 2.4% gain, followed by real estate (+2.0%), health care (+1.7%), and consumer discretionary (+1.6%). The energy sector (-0.1%) briefly turned positive late in the day but was unable to close positive, reflecting a lack of investor confidence in the space.
The cruise line industry, meanwhile, could be on the verge of an inflection point, according to Barclays. The firm upgraded Royal Caribbean (RCL 64.59, +4.62, +7.7%), Carnival (CCL 15.07, +1.33, +9.7%), and Norwegian (NCLH 16.63, +2.00, +13.7%) to Overweight from Equal Weight on a favorable risk/reward profile.
Costco (COST 342.58, -4.42, -1.3%) was a notable exception today despite the company beating earnings estimates and reporting in-line revenue and comparable sales results. On a related note, Telsey Advisory Group raised its price target on the stock to $390 from $385.
The U.S. Treasury market remained uneventful. The 2-yr yield finished flat at 0.13%, and the 10-yr yield declined one basis point to 0.66%. The U.S. Dollar Index advanced 0.3% to 94.59. WTI crude futures shed 0.2%, or $0.09, to settle at $40.22/bbl.
Reviewing Friday's economic data:
Durable goods orders increased 0.4% m/m in August (Briefing.com consensus +0.9%) following an upwardly revised 11.7% increase (from 11.2%) in July. Excluding transportation, orders were also up 0.4% (Briefing.com consensus 1.0%) following an upwardly revised 3.2% increase (from 2.4%) in July.
The key takeaway from the report is that order increases were seen across most categories, as manufacturing needs continued to recover from their pandemic depression, yet total orders are still down 11.3% yr/yr (down 3.0%, ex-transportation).
Looking ahead, the Conference Board's Consumer Confidence Index for September, the S&P Case-Shiller Home Price Index for July, and the Advance August readings for Intl Trade in Goods, Retail Inventories, and Wholesale Inventories will be released on Monday.
Nasdaq Composite +21.6% YTD
S&P 500 +2.1% YTD
Dow Jones Industrial Average -4.8% YTD
Russell 2000 -11.6% YTD
Market Snapshot
Dow 27163.96 +358.52 (1.34%)
Nasdaq 10913.59 +241.30 (2.26%)
SP 500 3298.46 +51.87 (1.60%)
10-yr Note +1/32 0.658
NYSE Adv 2138 Dec 831 Vol 800.0 mln
Nasdaq Adv 2381 Dec 934 Vol 3.7 bln
Industry Watch
Strong: Information Technology, Real Estate, Health Care, Industrials
Weak: Energy
Moving the Market
-- S&P 500 ends negative week on high note
-- Mega-caps and technology stocks resumed leadership
-- Investors looked past the market uncertainty
Stocks eke out gains in uneven session
24-Sep-20 16:15 ET
Dow +52.31 at 26805.44, Nasdaq +39.28 at 10672.29, S&P +9.67 at 3246.59
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market oscillated between gains and losses on Thursday, with the S&P 500 ultimately closing higher by 0.3%. The Nasdaq Composite increased 0.4%, the Dow Jones Industrial Average increased 0.2%, and the Russell 2000 finished flat.
The S&P 500 started the day lower by 0.9%, extending the month's pullback and briefly turning negative for the year, before the dip buyers stepped in. By the afternoon, the benchmark index was up 1.2% but sellers regained control on no specific news. The inability to sustain another rebound was disappointing for the bulls but not necessarily bearish.
Ten of the 11 S&P 500 sectors finished in positive territory, even as declining issues edged out advancing issues at both the NYSE and Nasdaq. The utilities (+1.2%), consumer staples (+0.8%), and information technology (+0.6%) sectors outperformed in a defensive-minded trade that excluded the health care sector (-0.5%).
Generally, investors remained nervous about election volatility, the prospects for another fiscal relief bill, the trajectory of the coronavirus, and U.S.-China relations. On stimulus, House Speaker Pelosi (D-CA) will reportedly introduce a $2.4 trillion relief bill, but it's unlikely to have the support of Republicans.
Regarding the economy, the labor market remained in poor standing as weekly jobless claims increased by 4,000 to 870,000 (Briefing.com consensus 825,000). New home sales, however, rose 4.8% m/m in August to a seasonally adjusted annual rate of 1.011 million (Briefing.com consensus 875,000) -- its highest rate since November 2006.
Interestingly, a pair of analysts turned bullish on some battered financial stocks. Goldman Sachs (GS 195.11, +8.99, +4.8%) was upgraded to Buy from Hold at UBS, and Wells Fargo (WFC 23.32, +0.49, +2.2%) was added to the Fresh Pick List at Robert W. Baird.
U.S. Treasuries traded within another narrow range and closed little changed. The 2-yr yield was unchanged at 0.13%, and the 10-yr yield decreased one basis point to 0.67%. The U.S. Dollar Index declined 0.1% to 94.33. WTI crude futures gained 0.9%, or $0.37, to $40.31/bbl.
Reviewing Thursday's economic data:
Jobless claims for the week ending September 19 increased by 4,000 to 870,000 (Briefing.com consensus 825,000) while continuing claims for the week ending September 12 decreased by 167,000 to 12.580 million.
The key takeaway from the report is that initial jobless claims remain at stunningly high levels that point to the ongoing challenges U.S. businesses face getting back on a pre-pandemic track. In the same period a year ago, initial jobless claims were 215,000.
New home sales in August did something they haven't done since November 2006 -- exceed a seasonally adjusted annual rate of 1.0 million. Specifically, they rose 4.8% m/m to 1.011 million (Briefing.com consensus 875,000) and were up 43.2% yr/yr.
The key takeaway from the report is that it reflects strong demand for new homes at more affordable price points, as the South region, which is the largest homebuilding region and features lower average prices, saw sales increase 13.4% m/m.
Looking ahead, investors will receive Durable Goods Orders for August on Friday.
Nasdaq Composite +18.9% YTD
S&P 500 +0.5% YTD
Dow Jones Industrial Average -6.0% YTD
Russell 2000 -13.0% YTD
Market Snapshot
Dow 26805.44 +52.31 (0.20%)
Nasdaq 10672.29 +39.28 (0.37%)
SP 500 3246.59 +9.67 (0.30%)
10-yr Note +1/32 0.664
NYSE Adv 1439 Dec 1513 Vol 928.0 mln
Nasdaq Adv 1356 Dec 1928 Vol 4.0 bln
Industry Watch
Strong: Information Technology, Real Estate, Communication Services, Consumer Discretionary
Weak: Energy, Health Care, Industrials
Moving the Market
-- Stocks attempt a rebound
-- Mega-caps and semiconductor stocks show relative strength
-- Weekly initial claims increased by 4,000 to 870,000 (Briefing.com consensus 825,000)
Stocks suffer steep losses as investors raise cash
23-Sep-20 16:15 ET
Dow -525.05 at 26753.13, Nasdaq -330.65 at 10633.01, S&P -78.65 at 3236.92
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 dropped 2.4% on Wednesday in a broad-based retreat that reflected cash-raising efforts. The Nasdaq Composite fell 3.0%, the Russell 2000 fell 3.0%, and the Dow Jones Industrial Average fell 1.9%.
All 11 S&P 500 sectors closed sharply lower between 1.1% (health care) and 4.6% (energy), and traditional safe-haven assets did not see the usual appreciation in times of equity weakness. U.S. Treasuries were little changed, gold futures fell 2.0% to $1868.90/ozt, and the Japanese yen fell 0.5% against the dollar (94.35, +0.36, +0.4%).
It didn't start this way. The session had begun on a high note, as the market reacted positively to Johnson & Johnson (JNJ 144.44, +0.23, +0.2%) advancing its COVID-19 vaccine candidate to Phase 3 trials and Nike (NKE 127.11, +10.24, +8.8%) blowing past quarterly results and raising its FY21 revenue guidance.
An initial weakness in the mega-cap stocks, however, gradually spilled over to the broader market, and the negative price action appeared to reinforce the idea that the market's recent pullback may not yet have run its course. The CBOE Volatility Index increased 6.4% to 28.58, which was a relatively modest gain.
Losses steepened in the afternoon without much interest to buy the dip. Shares of Apple (AAPL 107.12, -4.69, -4.2%) fell 4% while Tesla (TSLA 380.36, -43.87, -10.3%) fell 10% post-Battery Day. On a related note, UBS resumed coverage on Apple with a Neutral rating, versus a prior Buy rating.
Separately, the House passed a government funding bill through Dec. 11 that the Senate is expected to pass later this week. Notwithstanding this piece of good news, general uncertainty surrounding the election, the coronavirus, and the economy likely increased the cash appeal.
U.S. Treasuries, as previously mentioned, finished near their flat lines. The 2-yr yield was unchanged at 0.13%, and the 10-yr yield increased one basis point to 0.68%. WTI crude futures gained 1.0%, or $0.39, to $39.94/bbl but retraced those gains after the settlement time.
Reviewing Wednesday's economic data:
The FHFA Housing Price Index for September increased 1.0% following an upwardly revised 1.0% increase in August (from +0.9%).
The weekly MBA Mortgage Applications Index increased 6.8% following a 2.5% decline in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report and New Home Sales for August on Thursday.
Nasdaq Composite +18.5% YTD
S&P 500 +0.2% YTD
Dow Jones Industrial Average -6.2% YTD
Russell 2000 -13.0% YTD
Market Snapshot
Dow 26753.13 -525.05 (-1.92%)
Nasdaq 10633.01 -330.65 (-3.02%)
SP 500 3236.92 -78.65 (-2.37%)
10-yr Note 0/32 0.674
NYSE Adv 318 Dec 2648 Vol 1.0 bln
Nasdaq Adv 523 Dec 2852 Vol 4.0 bln
Industry Watch
Strong: Health Care
Weak: Information Technology, Energy, Communication Services, Materials
Moving the Market
-- Stocks suffer steep losses amid general uncertainty, cash-raising efforts
-- Broad-based retreat, mega-caps were an influential drag
-- Encouraging vaccine update from Johnson & Johnson (JNJ)
Mega-caps help market snap losing streak
22-Sep-20 16:20 ET
Dow +140.48 at 27278.18, Nasdaq +184.84 at 10963.66, S&P +34.51 at 3315.57
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 gained 1.1% on Tuesday, snapping a four-session losing streak alongside the Nasdaq Composite (+1.7%), which got an added boost from the mega-caps. The Dow Jones Industrial Average (+0.5%) and Russell 2000 (+0.8%) followed behind.
Amazon (AMZN 3128.99, +168.52) set the mega-cap pace with a 5.7% gain after the stock was upgraded to Outperform from Mkt Perform at Bernstein, although Apple (AAPL 111.81, +1.73, +1.6%) appeared to be the more influential mega-cap today. AAPL led the the S&P 500 into negative territory in the morning, but as the stock turned around on no news, so did the broad market.
From a sector perspective, the consumer discretionary sector (+3.0%) set the winning pace on the backs of Amazon and Nike (NKE 116.87, +3.50, +3.1%), which rallied ahead of its earnings report after the close. The communication services (+1.9%), information technology (+1.7%), real estate (+1.3%), and industrial (+1.0%) sectors followed suit.
Conversely, the energy (-1.0%), financials (-0.8%), and health care (-0.2%) sectors closed lower, limiting today's market rebound.
Tesla (TSLA 424.23, -25.16, -5.6%) was another exception after CEO Elon Musk tempered expectations for its Battery Day event today. Mr. Musk said yesterday that new products will not reach serious high-volume production until 2022.
In other developments, Fed Chair Powell and Treasury Secretary Mnuchin testified on the CARES Act before the House Financial Services Committee, and existing home sales increased 2.4% m/m in August to a seasonally adjusted annual rate of 6.00 million, in-line with the Briefing.com consensus estimate.
Market reaction was muted to both of these events, but it's worth noting that Mr. Powell reiterated the Fed will do whatever it takes to support the economy for as long as is needed.
U.S. Treasuries had another quiet session, finishing with small gains. The 2-yr yield declined one basis point to 0.13%, and the 10-yr yield declined one basis point to 0.66%. The U.S. Dollar Index gained 0.3% to 93.94. WTI crude futures gained 0.6%, or $0.25, to $39.55/bbl.
Reviewing Tuesday's economic data:
Existing home sales increased 2.4% m/m in August to a seasonally adjusted annual rate of 6.00 million, in-line with the Briefing.com consensus estimate. August marked the third consecutive month of positive sales gains. Total sales in August were up 10.5% from a year ago.
The key takeaway from the report is that it reflects robust demand for existing homes. That is constraining supply even further, which is going to be a pressure point that feeds higher prices and bolsters the prospects for new home sales.
Looking ahead, investors will receive the FHFA Housing Price Index for September and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +22.2% YTD
S&P 500 +2.6% YTD
Dow Jones Industrial Average -4.4% YTD
Russell 2000 -10.3% YTD
Market Snapshot
Dow 27278.18 +140.48 (0.52%)
Nasdaq 10963.66 +184.84 (1.71%)
SP 500 3315.57 +34.51 (1.05%)
10-yr Note 0/32 0.672
NYSE Adv 1671 Dec 1292 Vol 947.3 mln
Nasdaq Adv 1698 Dec 1647 Vol 3.5 bln
Industry Watch
Strong: Consumer Discretionary, Communication Services, Information Technology
Weak: Energy, Financials, Health Care
Moving the Market
-- Mega-caps outperformed, led market rebound
-- S&P 500 and Nasdaq snap four-session losing streaks
-- Fed Chair Powell and Treasury Secretary Mnuchin testified on the CARES Act
Cyclical stocks lead market lower, but tech stocks limit decline
21-Sep-20 16:15 ET
Dow -509.72 at 27137.70, Nasdaq -14.48 at 10778.82, S&P -38.41 at 3281.06
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 1.2% on Monday, although it was down as much as 2.7% intraday as increased uncertainty on the political, trade, and health fronts fueled economic growth concerns. The Nasdaq Composite declined just 0.1% amid relative strength in technology stocks, while the Dow Jones Industrial Average (-1.8%) and Russell 2000 (-3.4%) underperformed.
Political uncertainty was a big theme following the passing of Supreme Court Justice Ginsburg, as many suggested lawmakers would focus less on stimulus talks and more on a new appointee. Trade uncertainty was based on China updating its trade blacklist without naming any affected companies. Health uncertainty stemmed from the rising COVID-19 cases in Europe, raising the specter of shutdowns.
The ensuing weakness disproportionately affected the cyclical sectors -- industrials (-3.4%), materials (-3.4%), and energy (-3.3%) -- but the information technology sector (+0.8%) did partially benefit from the growth concerns. The tech sector, led by Apple (AAPL 110.08, +3.24, +3.0%), was the only sector to close higher on Monday.
Notably, at its low today, the S&P 500 was down 10.0% from the record high it set earlier this month -- a decline often described as a "correction." This might have been the green light for many investors and traders to buy the dip in the last hour of trading.
Within the financials sector (-2.5%), banks were under pressure amid reports that several global institutions, including JPMorgan Chase (JPM 95.31, -3.04, -3.1%) and Deutsche Bank (DB 8.34, -0.75, -8.3%), moved more than $2 trillion in illicit funds for a period of nearly 20 years despite red flags.
Separately, shares of Oracle (ORCL 60.82, +1.07, +1.8%) and Walmart (WMT 137.07, +1.78, +1.3%) gained more than 1% on expectations that a TikTok deal will be approved. Microsoft (MSFT 202.54, +2.15, +1.1%) agreed to acquire ZeniMax Media for $7.5 billion in cash. Illumina (ILMN 270.13, -25.37, -8.6%) agreed to acquire Grail for $8 billion in cash and stock.
U.S. Treasuries finished higher on the longer-end of the curve. The 2-yr yield increased one basis point to 0.14%, while the 10-yr yield declined two basis points to 0.67%. The U.S. Dollar Index rose 0.7% to 93.56. WTI crude futures fell 3.9%, or $1.63, to $39.69/bbl.
Investors did not receive any economic on Monday. Looking ahead, the Existing Home Sales report for August will be released on Tuesday.
Nasdaq Composite +20.1% YTD
S&P 500 +1.6% YTD
Dow Jones Industrial Average -4.9% YTD
Russell 2000 -11.0% YTD
Market Snapshot
Dow 27137.70 -509.72 (-1.84%)
Nasdaq 10778.82 -14.48 (-0.13%)
SP 500 3281.06 -38.41 (-1.16%)
10-yr Note +3/32 0.672
NYSE Adv 439 Dec 2556 Vol 1.2 bln
Nasdaq Adv 639 Dec 2666 Vol 3.8 bln
Industry Watch
Strong: Information Technology
Weak: Energy, Materials, Industrials, Financials, Real Estate
Stocks end week on risk-averse note
18-Sep-20 16:15 ET
Dow -244.56 at 27647.42, Nasdaq -116.99 at 10793.30, S&P -37.54 at 3319.47
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 fell 1.1% on this quadruple-witching expiration Friday, as losses spread out from technology stocks to all 11 S&P 500 sectors. The Nasdaq Composite also declined 1.1%, followed by the Dow Jones Industrial Average (-0.9%) and Russell 2000 (-0.4%).
At first, losses were concentrated in the mega-cap/growth/momentum stocks in a continuation trade from the past few sessions. Options-expiration related activity was a likely factor that exacerbated the downwards momentum, but the most obvious factor was the U.S. prohibiting downloads of TikTok and WeChat after Sunday.
Many viewed the download ban as a negotiation tactic to get a revised deal between Oracle (ORCL 59.75, -0.43, -0.7%) and TikTok that better protects U.S. data. Tencent's WeChat called the decision "unfortunate" and said it will continue to discuss solutions with the U.S., but there were still concerns about potential retaliation against U.S. technology companies.
The information technology sector (-1.7%) exerted influential weakness as a result, and an early rotational trade into cyclical/value stocks lost some stream as tech stocks accelerated losses. The materials (-1.7%), utilities (-1.8%), and real estate (-2.0%) sectors were other laggards, while the health care (-0.1%) and financials (-0.2%) sectors outperformed on a relative basis.
The market did close off session lows, thanks to a buy-the-dip mindset in the afternoon, but it's worth noting that the S&P 500 closed below its 50-day moving average (3343).
Tesla (TSLA 442.15, +18.72, +4.4%) was a notable exception to the negative trend, rising 4.4% after Piper Sandler raised its price target on the stock to $515 from $480 ahead of its Battery Day event next week.
U.S. Treasuries finished little changed in a tight-ranged session. The 2-yr yield remained unchanged at 0.13%, and the 10-yr yield increased one basis point to 0.69%. The U.S. Dollar Index was flat at 92.95. WTI crude futures increased 0.2% to $41.09/bbl, bringing its weekly gain to 10%.
Reviewing Friday's economic data:
The final University of Michigan Index of Consumer Sentiment for August ticked up to 74.1 (Briefing.com consensus 72.8) from the preliminary reading of 72.8. The final reading for July was 72.5.
The key takeaway from the report is that consumer sentiment has been slow to rebound and that the incremental improvement seen has been based simply on the view that things couldn't get worse than they were at the depths of the shutdown period.
The Conference Board's Leading Economic Index (LEI) increased 1.2% in August (Briefing.com consensus 1.4%) following an upwardly revised 2.0% increase (from 1.4%) in July. The increase for August represents the fourth straight month the index has been positive after declining 7.4% in March and 6.3% in April.
The key takeaway from the report is the understanding that, despite four straight increases, more repair work is necessary. At 106.5, the index is still 4.7% below the level seen in February.
The current account deficit for the second quarter totaled $170.5 billion (Briefing.com consensus -$146.3 billion). The first quarter deficit was revised to $111.5 billion from $104.2 billion.
Investors will not receive any notable economic data on Monday.
Nasdaq Composite +20.3% YTD
S&P 500 +2.8% YTD
Dow Jones Industrial Average -3.1% YTD
Russell 2000 -7.9% YTD
Market Snapshot
Dow 27647.42 -244.56 (-0.88%)
Nasdaq 10793.30 -116.99 (-1.07%)
SP 500 3319.47 -37.54 (-1.12%)
10-yr Note 0/32 0.694
NYSE Adv 1019 Dec 1917 Vol 3.2 bln
Nasdaq Adv 1594 Dec 1649 Vol 5.7 bln
Industry Watch
Strong: Financials, Health Care
Weak: Information Technology, Real Estate, Utilities, Materials
Moving the Market
-- Stocks end week on lower note, broad-based losses
-- Influential weakness in the tech sector amid TikTok download ban, options-expiration activity, valuation concerns
-- Financial stocks outperformed on a relative basis
Down day for market, but cyclical sectors outperform
17-Sep-20 16:20 ET
Dow -130.40 at 27891.98, Nasdaq -140.19 at 10910.29, S&P -28.48 at 3357.01
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 0.8% on Thursday, as relative weakness in the mega-caps overshadowed signs of life in more cyclical areas of the market. The Nasdaq Composite declined 1.3%, the Dow Jones Industrial Average declined 0.5%, and the Russell 2000 declined 0.6%.
The communication services (-1.8%), consumer discretionary (-1.6%), and information technology (-0.8%) sectors represented the mega-cap losses, but the real estate sector (-2.2%) declined the most. The cyclical materials (+0.8%), industrials (+0.2%), and energy (+0.2%) sectors outperformed all day and closed higher.
A 10% decline in Snowflake (SNOW 227.54, -26.39, -10.4%) following yesterday's remarkable IPO might have stirred valuation concerns, or profit-taking activity, in many of the mega-cap/growth/momentum stocks. Apple (AAPL 110.34, -1.79) fell 1.6% but it was down as much as 3.1% intraday.
Conversely, factors that contributed to the outperformance of cyclical and value stocks included an inclination to buy cheaper stocks amid the mega-cap weakness, higher oil prices ($40.99, +0.82, +2.0%) that favored energy stocks, Nucor (NUE 48.97, +1.41, +3.0%) issuing upside Q3 EPS guidance, and follow-through buying interest in General Electric (GE 7.05, +0.30, +4.4%) after an 11% gain yesterday.
Notably, the 50-day moving average (3340) in the S&P 500 proved to be an area of technical support. The benchmark index traded slightly below the key technical level for parts of the day but closed above it, which was good for sentiment reasons. For what it's worth, each of the major indices also closed off session lows.
In Washington, House Speaker Pelosi (D-CA) repeated that a stimulus deal must be at least $2.2 trillion, throwing cold water on a $1.5 trillion relief bill proposed by centrist lawmakers that President Trump said he liked.
U.S. Treasuries finished the session little changed. The 2-yr yield decreased one basis point to 0.13%, and the 10-yr yield was flat at 0.68%. The U.S. Dollar Index declined 0.4% to 92.89.
Reviewing Thursday's economic data:
Initial claims for the week ending September 12 decreased by 33,000 to 860,000 (Briefing.com consensus 830,000). Continuing claims for the week ending September 5 decreased by 916,000 to 12.628 million.
The key takeaway from the report is that initial claims remain excessively high six months after the employment crash of the COVID pandemic. In the same week a year ago, initial claims were 211,000.
Housing Starts for August declined 5.1% m/m to a seasonally adjusted annual rate of 1.416 million units (Briefing.com consensus 1.489 million) but were up 2.8% yr/yr. Building Permits declined 0.9% m/m to 1.470 million (Briefing.com consensus 1.520 million) and were down 0.1% yr/yr.
The key takeaway from the report is that there was continued strength in single-family units, with starts up 4.1% m/m (+12.1% yr/yr) and permits up 6.0% m/m (+15.6% yr/yr) amid strong demand.
The Philadelphia Fed Index decreased to 15.0 in September (Briefing.com consensus 13.0) from 17.2 in August.
Looking ahead, investors will receive the preliminary University of Michigan Index of Consumer Sentiment for September, the Conference Board's Leading Economic Index for August, and the Q2 Current Account Balance on Friday.
Nasdaq Composite +21.6% YTD
S&P 500 +3.9% YTD
Dow Jones Industrial Average -2.2% YTD
Russell 2000 -7.5% YTD
Mega-caps weigh down market, Fed stays accommodative
16-Sep-20 16:25 ET
Dow +36.78 at 28022.38, Nasdaq -139.85 at 11050.48, S&P -15.71 at 3385.49
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 0.5% on Wednesday due to weakness in the mega-cap stocks, while the Fed signaled rates will remain near zero through 2023 as inflation is expected to remain muted. The Nasdaq Composite fell 1.3%, while the Dow Jones Industrial Average (+0.1%) and Russell 2000 (+0.9%) finished higher.
The Fed left the fed funds rate unchanged, and the policy statement noted they'll remain there until the economy achieves maximum employment and an average 2.0% inflation rate is reached for some time. Note, two FOMC members preferred slightly different stances on how inflation guidance should be communicated. The central bank also raised its GDP forecast for 2020 but lowered its projections for 2021 and 2022.
The S&P 500 rose to session highs (+0.8%) following the statement, but then turned negative during Fed Chair Powell's press conference. Some criticized the Fed chair for not clearly explaining his thinking on future monetary policy, but one shouldn't attribute the intraday weakness to Mr. Powell.
Mega-cap stocks were weak all day, and their weakness was manifested in the declines in the S&P 500 information technology (-1.6%), communication services (-1.2%), and consumer discretionary (-1.0%) sectors. The cyclical energy (+4.1%), financials (+1.1%), and industrials (+1.0%) sectors had strong outings.
Shares of Facebook (FB 263.52, -8.90, -3.3%) fell 3% amid reports that the FTC is preparing a possible antitrust suit against the company. Adobe (ADBE 476.00, -21.67, -4.4%) fell 4% despite beating top and bottom-line quarterly estimates.
In other corporate news, FedEx (FDX 250.30, +13.63, +5.8%) provided better-than-expected earnings results, Snowflake (SNOW 253.93, +133.93, +111.6%) surged 100% in the largest software IPO in history, and General Electric (GE 6.75, +0.65, +10.7%) predicted it will be cash-flow positive in the second-half of this year.
Separately, White House Chief of Staff Meadows, who is a lead negotiator in the coronavirus relief talks, sounded uncharacteristically optimistic in a CNBC interview regarding the prospects for another round of fiscal stimulus. President Trump tweeted that Republicans should "go for the much higher numbers" on stimulus.
U.S. Treasuries gave up their modest gains following the release of the FOMC policy statement. The 2-yr yield increased one basis point to 0.14%, and the 10-yr yield increased one basis point to 0.69%. The U.S. Dollar Index increased 0.1% to 93.17. WTI crude futures rose 4.9%, or $1.87, to $40.17/bbl.
Reviewing Wednesday's economic data:
Total sales were up 0.6% m/m in August (Briefing.com consensus 1.0%), following a downwardly revised 0.9% increase (from 1.2%) in July, and were up 2.6% yr/yr. Excluding autos, sales were up 0.7% (Briefing.com consensus 1.0%), following a downwardly revised 1.3% increase (from 1.9%) in July, and were up 2.1% yr/yr.
The key takeaway from the report is that it points to some slowing in retail spending activity following the expiration of enhanced unemployment benefits, but, importantly, it didn't reveal a spending contraction as increases were seen in many categories.
The NAHB Housing Market Index increased to a new all-time high of 83 in September (Briefing.com consensus 78) following the previous all-time high of 78 in August.
Business inventories increased 0.1% in July following a 1.1% decline in June.
Looking ahead, investors will receive weekly Initial and Continuing claims, Housing Starts and Building Permits for August, and the Philadelphia Fed Index for September on Thursday.
Nasdaq Composite +23.2% YTD
S&P 500 +4.8% YTD
Dow Jones Industrial Average -1.8% YTD
Russell 2000 -7.0% YTD
Tech leadership prevails
15-Sep-20 16:20 ET
Dow +2.27 at 27985.60, Nasdaq +133.67 at 11190.33, S&P +17.66 at 3401.20
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 gained 0.5% on Tuesday, although it started the day up as much as 1.1% in a relatively broad-based continuation of the prior day's rebound. The mega-caps and growth stocks generally outperformed their value-oriented peers.
The Nasdaq Composite advanced 1.2%, reflecting the tech-oriented leadership, while the Russell 2000 (+0.1%) and Dow Jones Industrial Average (unch) finished little changed.
Apple (AAPL 115.54, +0.19, +0.2%) was the exception to the mega-cap excellence despite the company revealing a new watch with added fitness and health capabilities, a new iPad, and new subscription plans. Shares opened higher by 3.0% but briefly turned negative after the conclusion of its product event in the afternoon, weighing on the major indices.
Most components in the top-weighted S&P 500 information technology sector (+1.0%) still showed relative strength, though, and gains in the communication services (+1.7%), real estate (+1.4%), and consumer discretionary (+1.0%) sectors supported the market. Conversely, the financials (-1.4%), energy (-0.8%), and consumer staples (-0.1%) sectors closed lower.
Losses were broad in the financials sector, but JPMorgan Chase (JPM 99.28, -3.19, -3.1%) particularly weighed on sentiment after lowering its FY20 net interest income guidance to $55 bln from prior guidance of $56 bln. Citigroup (C 44.81, -3.34, -6.9%) fell another 7% after falling 5% yesterday on news of a potential penalty from federal regulators.
Other notable laggards included Caterpillar (CAT 148.60, -4.91, -3.2%) after providing disappointing sales figures for August, Lennar (LEN 75.90, -3.10, -3.9%) despite reporting better-than-expected earnings results, and Carnival (CCL 15.93, -1.92, -10.8%) after disclosing a $1 billion stock offering.
Shares of NextEra Energy (NEE 295.70, +13.78, +4.9%) rose 5% after the utilities company increased its EPS guidance for 2021 and announced a 4:1 stock split.
U.S. Treasuries finished mixed and little changed. The 2-yr yield declined one basis point to 0.13%, and the 10-yr yield increased one basis point to 0.68%. The U.S. Dollar Index was flat at 93.08. WTI crude futures rose 2.9%, or $1.08, to $37.22/bbl.
Reviewing Tuesday's economic data:
Industrial production increased 0.4% m/m in August (Briefing.com consensus +1.0%) after increasing an upwardly revised 3.5% (from 3.0%) in July. The capacity utilization rate increased to 71.4% (Briefing.com consensus 71.7%) from an upwardly revised 71.1% (from 70.6%).
The key takeaway from the report is the understanding that gains for most manufacturing industries have gradually slowed since June.
The Empire State Manufacturing Survey for September was better than expected, checking in at 17.0 (Briefing.com consensus 5.9) versus 3.7 in August.
Import prices increased 0.9% in August; and prices, excluding oil, increased 0.7%. Export prices increased 0.5% in August; and prices, excluding agriculture, increased 0.8%.
Looking ahead to Wednesday, investors will receive Retail Sales for August, the FOMC Rate Decision, the NAHB Housing Market Index for September, Business Inventories for August, Net Lon-Term TIC Flows for July, and the weekly MBA Mortgage Applications Index.
Nasdaq Composite +24.7% YTD
S&P 500 +5.3% YTD
Dow Jones Industrial Average -1.9% YTD
Russell 2000 -7.8% YTD
Market Snapshot
Dow 27985.60 +2.27 (0.01%)
Nasdaq 11190.33 +133.67 (1.21%)
SP 500 3401.20 +17.66 (0.52%)
10-yr Note 0/32 0.676
NYSE Adv 1626 Dec 1352 Vol 844.0 mln
Nasdaq Adv 1810 Dec 1521 Vol 3.7 bln
Broad-based gains spurred by M&A activity, vaccine optimism
14-Sep-20 16:15 ET
Dow +327.69 at 27983.33, Nasdaq +203.11 at 11056.66, S&P +42.57 at 3383.54
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 rose 1.3% on Monday, as a spate of corporate deals and encouraging vaccine news helped the market rebound from back-to-back weekly declines. The Nasdaq Composite gained 1.9%, and the Dow Jones Industrial Average gained 1.2%. The Russell 2000 outperformed with a 2.7% gain.
The gains were broad and steady, with all 11 S&P 500 sectors finishing in positive territory, including seven that rose at least 1.0%. The information technology sector's 2.1% gain was the most influential, but the real estate sector (+2.2%) eked out the top spot. The communication services sector (+0.1%) underperformed.
Starting with the key M&A news, NVIDIA (NVDA 514.89, +28.31, +5.8%) agreed to acquire Arm Holdings from Softbank for $40 bln in cash and stock; Gilead Sciences (GILD 66.34, +1.44, +2.2%) agreed to acquire Immunomedics (IMMU 83.65, +41.40, +98.0%) for about $21 bln, or $88.00 per share, in cash; and Verizon (VZ 60.32, +0.53, +0.9%) agreed to acquire Tracfone for $6.25 bln in cash and stock.
Separately, Oracle (ORCL 59.46, +2.46, +4.3%) reportedly formed a partnership with TikToK U.S. after Microsoft's (MSFT 205.41, +1.38, +0.7%) acquisition bid was rejected. Walt Disney's (DIS 131.20, -0.55, -0.4%) ESPN entered into two separate multi-year agreements with Caesars Entertainment (CZR 55.39, +5.28, +10.5%) and DraftKings (DKNG 48.62, +7.16, +17.3%).
As for today's dose of vaccine news, AstraZeneca (AZN 54.02, +0.29, +0.5%) resumed its COVID-19 vaccine trials in the UK. Pfizer (PFE 37.01, +0.94, +2.6%) for its part reiterated expectations to have conclusive results from its Phase 3 COVID-19 vaccine trial in October while also planning to expand enrollment.
Citigroup (C 48.15, -2.85, -5.6%) was a notable laggard after its CFO issued a revenue warning and The Wall Street Journal reported that the company could get reprimanded for failing to improve its risk-management systems. Shares of Citigroup fell 5.6%, versus a 1.3% gain in the S&P 500 financials sector.
The U.S. Treasury market was rather quiet today despite the bullish action in the stock market. The 2-yr yield increased one basis point to 0.14%, and the 10-yr yield was flat at 0.67%. The U.S. Dollar Index declined 0.3% to 93.06. WTI crude futures decreased 0.3%, or $0.12, to $37.22/bbl.
Investors did not receive any economic data on Monday. Looking ahead to Tuesday, investors will receive Industrial Production and Capacity Utilization for August, the Empire State Manufacturing Survey for September, and Import and Export Prices for August.
Nasdaq Composite +23.2% YTD
S&P 500 +4.7% YTD
Dow Jones Industrial Average -1.9% YTD
Russell 2000 -7.9% YTD
Market Snapshot
Dow 27983.33 +327.69 (1.18%)
Nasdaq 11056.66 +203.11 (1.87%)
SP 500 3383.54 +42.57 (1.27%)
10-yr Note -1/32 0.679
NYSE Adv 2416 Dec 572 Vol 860.0 mln
Nasdaq Adv 2599 Dec 731 Vol 3.7 bln
S&P 500 ekes out gain amid cyclical leadership
11-Sep-20 16:20 ET
Dow +131.06 at 27655.64, Nasdaq -66.05 at 10853.55, S&P +1.78 at 3340.97
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 increased 0.1% on this 19th anniversary of 9/11 but continued selling in the mega-caps limited the upside. The Dow Jones Industrial Average gained 0.5%, while the Nasdaq Composite (-0.6%) and Russell 2000 (-0.7%) closed lower.
Similar to the days before, today's price action was technically-oriented given the absence of market-moving news and the losses in stocks like Apple (AAPL 112.00, -1.49, -1.3%), Amazon (AMZN 3116.22, -58.89, -1.9%), and Microsoft (MSFT 204.03, -1.34, -0.7%) on no specific corporate news. Apple shares fell 7.4% this week.
The difference today was that their losses were offset by relative strength in the cyclical sectors, namely industrials (+1.4%), materials (+1.3%), and financials (+0.8%). Still, when Apple and Amazon are down more than 1.0%, there must be more winners than losers to make a meaningful difference.
There were more of the latter on Friday, as declining issues outpaced advancing issues at the NYSE and Nasdaq. The information technology (-0.8%), consumer discretionary (-0.3%), and communication services (-0.3%) sectors ended the day in negative territory due to their exposure to the mega-cap stocks.
Interestingly, the S&P 500 was down as much as 0.9% intraday and fell below its 50-day moving average (3322). A broad rebound in the afternoon, however, helped the benchmark index turn positive and close above the key technical level.
Shares of Oracle (ORCL 57.00, -0.33, -0.6%), Peloton (PTON 84.04, -3.71, -4.2%), and Kroger (KR 34.37, -0.37, -1.1%) finished lower following their earnings reports. Note, ORCL shares were up as much as 7.9%, and PTON shares were up as much as 11.8%.
U.S. Treasuries finished on a higher note. The 2-yr yield declined one basis point to 0.13%, and the 10-yr yield declined two basis points to 0.67%. The U.S. Dollar Index declined 0.1% to 93.28. WTI crude futures increased 0.2%, or $0.07, to $37.34/bbl.
Reviewing Friday's economic data:
Total CPI increased 0.4% m/m in August (Briefing.com consensus +0.3%) while core CPI, which excludes food and energy, also rose 0.4% (Briefing.com consensus +0.2%). The gains in August left total CPI up 1.3% yr/yr and core CPI up 1.7% yr/yr.
The key takeaway from the report, which featured the largest increase in the index for used cars and trucks (+5.4%) since March 1969, is that the increase in the all items index was broad-based; nonetheless, annual inflation rates are still running well below 2.0%, so there is still more noise than bothersome policy signal in the August report.
The Treasury Budget showed a $200.1 bln deficit in August. The budget data is not seasonally adjusted, so the August deficit cannot be compared to the July deficit of $63.0 bln. The deficit in August 2019 was $200.3 bln.
The key takeaway from the report is that while outlays and receipts showed little yr/yr change in August, the year-to-date deficit climbed above $3 trillion.
There are no notable economic reports scheduled for Monday.
Nasdaq Composite +21.0% YTD
S&P 500 +3.4% YTD
Dow Jones Industrial Average -3.1% YTD
Russell 2000 -10.3% YTD
Renewed selling sweeps market
10-Sep-20 16:15 ET
Dow -405.89 at 27524.58, Nasdaq -221.97 at 10919.60, S&P -59.77 at 3339.19
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 fell 1.8% on Thursday in a broad-based retreat led by shares of technology and energy companies. The Nasdaq Composite declined 2.0%, the Dow Jones Industrial Average declined 1.5%, and the Russell 2000 declined 1.2%.
The day started with the S&P 500 up 0.8%, and briefly surpassing yesterday's intraday high, on the back of leadership from the mega-caps and growth stocks. The latter might have benefited from an underwhelming weekly initial jobless claims report, which was unchanged at 884,000 (Briefing.com consensus 813,000).
On no specific news, though, these stocks quickly turned around and the selling carried over to the broad market throughout the day. All 11 S&P 500 sectors finished in red, and 29 of the 30 Dow components finished lower.
The information technology (-2.3%) and energy (-3.7%) sectors declined more than the S&P 500, while the materials sector (-0.9%) was a relative outperformer. At one point today, the influential tech sector was up 2.6%.
Some factors that might have pressured sentiment included the inability to sustain yesterday's rebound, suggesting that there was still more selling ahead, and news that the Senate failed to pass its $300 billion coronavirus relief bill. Granted, no one was expecting that bill to get very far, but it reflected the burgeoning pessimism surrounding another relief bill.
As equities steepened losses throughout the afternoon, money flowed into longer-dated U.S. Treasuries in a safety trade. The 2-yr yield increased one basis point to 0.14%, while the 10-yr yield decreased two basis points to 0.69%. The U.S. Dollar Index advanced 0.2% to 93.41. WTI crude futures fell 2.1%, or $0.78, to $37.27/bbl.
Bucking the trend today was RH (RH 385.46, +64.38, +20.1%) after the furniture and home accessories company exceeded quarterly expectations. RH shares surged 20% to fresh record highs.
Reviewing Thursday's economic data:
Initial claims for the week ending September 5 were unchanged at 884,000 (Briefing.com consensus 813,000). Continuing claims for the week ending August 29 increased by 93,000 to 13.385 million.
The key takeaway from the report is that there is nothing worth celebrating about initial claims being under one million when they are just barely under 900,000 nearly six months following the shock of the COVID shutdown phase in March. In the same week a year ago, initial claims were 208,000.
The Producer Price Index for final demand increased 0.3% m/m in August, as expected. The index for final demand, excluding food and energy, increased 0.4% m/m (Briefing.com consensus +0.2%). That left the yr/yr changes at -0.2% and 0.6%, respectively.
The key takeaway from the report is that the soft year-over-year readings will overshadow the stronger month-over-month readings, because the year-over-year numbers play into the Fed's view that it isn't even thinking about thinking about thinking about raising rates.
Wholesale inventories decreased 0.3% in July (Briefing.com consensus -0.1%), versus a prior decline of 1.3% in June.
Looking ahead, investors will receive the Consumer Price Index for August and the Treasury Budget for August on Friday.
Nasdaq Composite +21.7% YTD
S&P 500 +3.4% YTD
Dow Jones Industrial Average -3.5% YTD
Russell 2000 -9.6% YTD