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Stock Market Update
Large-cap indices lose reopening momentum
28-Apr-20 16:20 ET
Dow -32.23 at 24101.55, Nasdaq -122.43 at 8607.74, S&P -15.09 at 2863.39
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 0.5% on Tuesday in a mixed session. Large-cap technology and health care stocks lagged, while reopening enthusiasm continued to flow into the small-cap Russell 2000 (+1.3%) and S&P MidCap 400 (+1.0%). The Dow Jones Industrial Average shed 0.1%, while the Nasdaq Composite fell 1.4%.
The day started with broad gains that lifted the S&P 500 as much as 1.5% shortly after the open, as part of the reopening momentum from Monday. That broad momentum quickly dissipated, presumably due to valuation concerns, but lingered in areas of the market that had underperformed when the shutdown angst was rampant.
Some of those included the small-cap and mid-cap stocks, as previously noted, but also the cyclical S&P 500 energy (+2.2%), materials (+2.0%), industrials (+1.8%), and financials (+0.9%) sectors.
Conversely, the large-cap stocks that were deemed as relatively safe, and thus outperformed over the past few months, lost some of their appeal today and heavily dragged on the broader market. Those were found in the health care (-2.1%), communication services (-1.9%), and information technology (-1.4%) sectors.
The health care space also had some negative catalysts despite the reported progress on the coronavirus front. For instance, Johnson & Johnson (JNJ 151.39, -2.90, -1.9%) was downgraded to Neutral from Buy at UBS, while Pfizer (PFE 37.91, -0.42, -1.1%) and Merck (MRK 81.18, -2.80, -3.3%) declined after reporting earnings.
In other earnings news, shares of Caterpillar (CAT 115.46, +0.26, +0.2%), 3M (MMM 157.61, +3.96, +2.6%), and PepsiCo (PEP 136.32, +1.4%) finished higher, even after the companies withdrew full-year guidance, while shares of UPS (UPS 96.43, -6.12, -6.0%) faltered after the company missed profit estimates.
U.S. Treasuries reclaimed most of yesterday's losses, driving yields lower across the curve. The 2-yr yield declined three basis points to 0.20%, and the 10-yr yield declined five basis points to 0.61%. The U.S. Dollar Index declined 0.2% to 99.88. WTI crude declined 4.6%, or $0.60, to $12.37/bbl, although it was down as much as 22% at one point during the session.
Reviewing Tuesday's economic data:
The Conference Board's Consumer Confidence Index for April plunged to 86.9 (Briefing.com consensus 86.5) from a downwardly revised 118.8 (from 120.0) for March. The April reading is the lowest since June 2014.
The key takeaway from the report is that consumers, while thinking positively about things reopening again, are still less optimistic about their financial prospects, which could be a headwind for spending activity during the recovery phase.
The advance goods trade deficit totaled $64.2 bln in March after a $59.9 bln deficit in February. Advance retail inventories declined 1.3% in March after decreasing 0.3% in February. Advance wholesale inventories decreased 1.0% in March after decreasing 0.7% in February.
The S&P Case-Shiller Home Price Index for February increased 3.5% (Briefing.com consensus 3.7%).
Looking ahead, investors will receive the advance estimate for Q1 GDP, Pending Home Sales for March, and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite -4.1% YTD
S&P 500 -11.4% YTD
Dow Jones Industrial Average -15.6% YTD
Russell 2000 -22.0% YTD
Market Snapshot
Dow 24101.55 -32.23 (-0.13%)
Nasdaq 8607.74 -122.43 (-1.40%)
SP 500 2863.39 -15.09 (-0.52%)
10-yr Note +27/32 0.616
NYSE Adv 2080 Dec 816 Vol 1.0 bln
Nasdaq Adv 1878 Dec 1343 Vol 3.6 bln
Industry Watch
Strong: Energy, Financials, Industrials, Materials
Weak: Health Care, Information Technology, Communication Services
Moving the Market
-- Large-cap indices lose reopening momentum
-- Relative weakness in technology and health care companies
-- Small-caps, mid-caps, and most cyclical sectors outperform amid lingering reopening enthusiasm
WTI crude settles down well off session lows
28-Apr-20 15:25 ET
Dow +79.38 at 24213.16, Nasdaq -66.10 at 8664.07, S&P +2.35 at 2880.83
[BRIEFING.COM] The S&P 500 continues to trade flat amid weakness in the mega-cap technology/value stocks.
One last look at the S&P 500 sectors shows eight of the 11 sectors trading in positive territory, including 2%+ gains in energy (+2.3%), industrials (+2.2%), and materials (+2.0%). The health care (-1.6%) and communication services (-1.4%) sectors are down more than 1.0%.
WTI crude settled lower by $0.60 (-4.6%) to $12.37/bbl, which was a relatively good finish considering futures were down more than 20% at one point during the session.
Stock Market Update
Stocks gain on reopening efforts, small-caps outperform
27-Apr-20 16:20 ET
Dow +359.51 at 24134.78, Nasdaq +95.64 at 8730.17, S&P +41.74 at 2878.48
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 gained 1.5% on Monday, as investors showed optimism in reopening efforts indicated by more states and countries. The Dow Jones Industrial Average (+1.5%) and Nasdaq Composite (+1.1%) also advanced more than 1.0%, while the Russell 2000 outperformed with a 4.0% gain.
At least nine U.S. states had their economies partially reopened as of Monday, according to The New York Times, while other states like New York, Texas, and Ohio announced plans to gradually reopen in the coming weeks. The prospective increase in economic activity, even without a confirmed COVID-19 treatment, had investors piling into previously-neglected cyclical sectors.
For instance, all 11 S&P 500 sectors ended the day higher, but strength was found in the S&P 500 financials (+3.6%) and materials (+2.6%) sectors, the Dow Jones Transportation Average (+2.8%), and the SPDR S&P Retail ETF (XRT 36.36, +1.82, +5.3%).
Even the energy sector (+2.1%) outperformed despite the 24% plunge in oil prices ($12.97, -4.05, -23.8%) and news of Diamond Offshore (DO), a small-cap company, filing for Chapter 11 bankruptcy protection. The bullish price action in the face of bad news suggested for investors that the sector may have already seen its bottom.
Likewise, Caterpillar (CAT 115.20, +1.16, +1.0%) overcame an analyst downgrade at Morgan Stanley, and General Motors (GM 22.45, +0.50, +2.3%) overcame a dividend suspension update.
Perhaps most noteworthy about today's action was that the market's most recognizable, and widely-held, mega-cap technology stocks did not participate in the broader advance. Instead, small-caps, as represented by the Russell 2000, welcomed renewed buying interest.
Overseas, Italy, France, Spain initiated steps to reopen their economies, but some attention should also be given to the Bank of Japan. The central bank lifted the cap on its JGB bond purchases, which some attributed to the initial gains in stocks, and said it will be increasing its purchases of corporate bonds and commercial paper.
U.S. Treasuries finally showed some weakness amid the bullish price action in equities. The 2-yr yield increased three basis points to 0.23%, and the 10-yr yield increased six basis points to 0.66%. The U.S. Dollar Index declined 0.3% to 100.07.
Investors did not receive economic data on Monday. Looking ahead to Tuesday, investors will receive the Conference Board's Consumer Confidence Index for April, the S&P Case-Shiller Home Price Index for February, and the Advance March reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories.
Nasdaq Composite -2.7% YTD
S&P 500 -10.9% YTD
Dow Jones Industrial Average -15.4% YTD
Russell 2000 -23.2% YTD
Market Snapshot
Dow 24134.78 +359.51 (1.51%)
Nasdaq 8730.17 +95.64 (1.11%)
SP 500 2878.48 +41.74 (1.47%)
10-yr Note -27/32 0.657
NYSE Adv 2303 Dec 634 Vol 969.6 mln
Nasdaq Adv 2565 Dec 697 Vol 3.6 bln
Industry Watch
Strong: Financials, Industrials
Weak: Consumer Staples
Moving the Market
-- Major indices trade higher, extend gains
-- Sharp drop in oil prices (-27%), but energy stocks trade mostly higher
-- State economies start to reopen
WTI crude plummets 24%
27-Apr-20 15:25 ET
Dow +414.40 at 24189.67, Nasdaq +109.76 at 8744.29, S&P +47.83 at 2884.57
[BRIEFING.COM] The S&P 500 is up at session highs with a 1.6% gain.
One last look at the S&P 500 sectors shows all trading higher, led by financials (+3.7%), industrials (+3.0%), and materials (+2.9%). The consumer staples (+0.5%) and communication services (+0.8%) sectors underperform.
WTI crude settled today's session sharply lower by 23.8%, or $4.06, to $12.97/bbl on no new catalyst.
Stocks end negative week on positive note
24-Apr-20 16:20 ET
Dow +260.01 at 23775.27, Nasdaq +139.77 at 8634.53, S&P +38.94 at 2836.74
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 increased 1.4% on Friday, wrapping up a negative week on a positive note amid a resurgence in buyers during the afternoon. The Dow Jones Industrial Average rose 1.1%, the Nasdaq Composite rose 1.7%, and the Russell 2000 rose 1.6%.
Investors started the day parsing a mixed batch of earnings reports, including those from a trio of Dow components. Price action was muted from an index level, though, as the market appeared disinterested, even as oil prices ($17.03, +0.23, +1.4%) continued to rebound and the $484 billion coronavirus relief bill was signed by President Trump.
Stocks then started to gain traction in afternoon trade, presumably pulling in reluctant investors, who were fearful of missing out on additional gains given the market's recent resiliency despite the negative economic environment. From a sector level, the gains were broad, with all 11 S&P 500 sectors closing in positive territory.
The information technology sector (+2.1%) led the advance, followed by the materials sector (+1.6%). The energy sector (+0.2%) underperformed today.
As hinted earlier, Dow components Intel (INTC 59.26, +0.22, +0.4%), Verizon (VZ 57.93, +0.34, +0.6%), and American Express (AXP 83.17, +0.71, +0.9%) reported mixed earnings results, but shares were able to close higher despite early losses.
Facebook (FB 190.07, +4.94, +2.7%) was a notable standout after the company announced the launch of Messenger Rooms, a competing service to Zoom Video (ZM 158.80, -10.29, -6.1%).
In other corporate news, Boeing (BA 128.98, -8.76, -6.4%) will reportedly cut its 787 Dreamliner production in half and announce job cuts as a result. Alphabet (GOOG 1279.31, +3.00, +0.2%) will reportedly cut its marketing budgets by as much as half in the second half of the year. AT&T (T 29.71, +0.21, +0.7%) CEO Randall Stephenson will retire on July 1.
U.S. Treasuries ended the session with modest gains, pushing yields slightly lower. The 2-yr yield and 10-yr yield both declined two basis points each to 0.20% and 0.60%, respectively. The U.S. Dollar Index declined 0.2% to 100.24. On a related note, the Fed will reduce its Treasury purchases to $10 billion/day next week from $15 billion/day this week.
Reviewing Friday's economic data:
Durable goods orders declined 14.4% m/m in March (Briefing.com consensus -10.0%). Excluding transportation, durable goods orders declined 0.2% (Briefing.com consensus -4.0%).
The key takeaway from the report is that business spending was up slightly in March, yet that condition isn't expected to persist into April when COVID-19 shutdown measures hit in full force and corporate capex cut announcements accelerated.
The final reading for the University of Michigan Index of Consumer Sentiment for March was revised up to 71.8 (Briefing.com consensus 66.5) from the preliminary reading of 71.0. The final reading for March was 89.1.
The key takeaway from the report is that the downturn in the Expectations Index has not been as severe as the downturn in the Current Economic Conditions Index, which suggests consumers are clearly concerned about the outlook but still clinging to some rebound hope with anticipated reopenings of state economies.
Investors will not receive any notable economic data on Monday.
Nasdaq Composite -3.8% YTD
S&P 500 -12.2% YTD
Dow Jones Industrial Average -16.7% YTD
Russell 2000 -26.1% YTD
Market Snapshot
Dow 23775.27 +260.01 (1.11%)
Nasdaq 8634.53 +139.77 (1.65%)
SP 500 2836.74 +38.94 (1.39%)
10-yr Note +2/32 0.588
NYSE Adv 1799 Dec 1085 Vol 1.1 bln
Nasdaq Adv 2102 Dec 1112 Vol 3.6 bln
Industry Watch
Strong: Information Technology, Materials, Consumer Discretionary
Weak: Energy, Real Estate, Utilities
Moving the Market
-- S&P 500 closes near session highs, still ends week lower
-- Relative strength in information technology sector despite underwhelming guidance from Intel (INTC)
-- Oil prices extend rebound, $484 billion coronavirus relief bill signed by President Trump
WTI crude extends rebound to third day
24-Apr-20 15:25 ET
Dow +216.26 at 23731.52, Nasdaq +113.53 at 8608.29, S&P +33.10 at 2830.90
[BRIEFING.COM] The S&P 500 is up 1.2%, and the Russell 2000 is up 1.4%.
One last look at the S&P 500 sectors shows green across the board. The information technology sector (+1.6%) ekes out the top spot, while the utilities sector (+0.4%) sits at the bottom of the standings.
WTI crude futures settled up $0.23 (+1.4%) to $17.03/bbl.
Stock market gives up gains after negative remdesivir report
23-Apr-20 16:20 ET
Dow +39.44 at 23515.26, Nasdaq -0.63 at 8494.76, S&P -1.51 at 2797.80
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 advanced as much as 1.6% on Thursday after the number of weekly initial claims declined to about 4.4 million, but stocks gave up gains following a negative report regarding a potential COVID-19 treatment. The benchmark index finished just below its flat line with a 0.1% decline.
The Dow Jones Industrial Average (+0.2%) and Nasdaq Composite (unch) also closed little changed, while the Russell 2000 (+1.0%) outperformed.
The Financial Times reported that Gilead's (GILD 77.78, -3.53, -4.3%) remdesivir drug flopped in its first randomized clinical trial in China, according to draft documents published accidentally by the World Health Organization (WHO). The news unnerved the market, and wiped out gains, as Stat News reported last Friday that the drug showed promising signs in one Chicago trial.
Gilead defended the results, saying WHO had an inappropriate characterization of the study and the data still suggested the drug had a "potential benefit," according to Stat News. Shares of Gilead still declined, and the broader market struggled the rest of the session, as the report reminded investors of the medical breakthroughs still needed to restore consumer confidence.
The S&P 500 sectors finished mixed with six closing higher and five closing lower. The energy sector (+3.0%) outperformed amid a 21.7% spike in WTI crude futures ($16.80/bbl, +3.00), which are now up 45% since Tuesday's settlement price. The utilities (-1.8%), real estate (-1.2%), and consumer staples (-1.0%) sectors underperformed.
As for the jobs data, initial claims for the week ending April 18 decreased by 810,000 to 4.427 million (Briefing.com consensus 4.0 million), which helped the market's thinking that the worst of the labor market data might be in the past.
The latter can be rationalized by states getting ready to reopen their economies, but it likely won't be as swift as the market's month-long rally. Illinois, for instance, extended its stay-at-home order through the end of May.
On the earnings front, Union Pacific (UNP 152.29, +5.19, +3.5%), Eli Lilly (LLY 159.93, +3.22, +2.1%), and CSX (CSX 64.47, +0.58, +1.0%) stood out with positive results and/or guidance.
U.S. Treasuries traded near their flat lines during the session. The 2-yr yield increased one basis point to 0.22%, while the 10-yr yield declined one basis point to 0.61%. The U.S. Dollar Index increased 0.1% to 100.50.
Reviewing Thursday's economic data:
Initial claims for the week ending April 18 decreased by 810,000 to 4.427 million (Briefing.com consensus 4.0 million). Continuing claims for the week ending April 11 increased by 4,064,000 to 15.976 million (a record high).
The key takeaway from this report, which covers the period in which the survey for the April Employment Situation Report was conducted, is that it presents some hope that the peak of the layoffs following the COVID-19 shutdowns has passed. Nonetheless, it is also a reminder of how bad things are on the labor front.
New home sales decreased 15.4% m/m in March to a seasonally adjusted annual rate of 627,000 units (Briefing.com consensus 655,000) from a downwardly revised 741,000 (from 765,000) in February. On a yr/yr basis, new home sales, which are counted when a contract is signed, were down 9.5%.
The key takeaway from the report is that it isn't as bad as feared, although COVID-19 shutdown issues didn't ramp up until the latter half of the month, which is harbinger presumably of decidedly weaker activity in April.
Looking ahead, investors will receive Durable Goods Orders for March and the revised University of Michigan Index of Consumer Sentiment for April on Friday.
Nasdaq Composite -5.3% YTD
S&P 500 -13.4% YTD
Dow Jones Industrial Average -17.6% YTD
Russell 2000 -27.2% YTD
Market Snapshot
Dow 23515.26 +39.44 (0.17%)
Nasdaq 8494.76 -0.63 (-0.01%)
SP 500 2797.80 -1.51 (-0.05%)
10-yr Note +2/32 0.602
NYSE Adv 1757 Dec 1104 Vol 1.1 bln
Nasdaq Adv 1931 Dec 1256 Vol 3.7 bln
Industry Watch
Strong: Energy, Industrials
Weak: Consumer Staples, Real Estate
Moving the Market
-- Stocks pare gains on disappointing Remdesivir update
-- Weekly initial claims decreased by 810,000 to 4.427 million (Briefing.com consensus 4.0 million).
-- WTI crude futures spike 25% to $17/bbl
WTI crude futures rise 22%
23-Apr-20 15:25 ET
Dow +59.68 at 23535.50, Nasdaq +5.71 at 8501.10, S&P +0.94 at 2800.25
[BRIEFING.COM] The S&P 500 is trading near session lows with a 0.1% gain. The Russell 2000 is up 1.8%.
One last look at the S&P 500 sectors shows energy (+3.2%), industrials (+0.8%), and health care (+0.8%) atop the standings, while the utilities (-1.8%) and real estate (-1.1%) sectors extend losses.
WTI crude futures settled higher by $3.00 (+21.7%) to $16.80/bbl. Including today's finish, WTI futures are now up 45% since Tuesday's settlement price.
Stocks recoup some weekly losses in broad-based advance
22-Apr-20 16:15 ET
Dow +456.94 at 23475.82, Nasdaq +232.15 at 8495.39, S&P +62.75 at 2799.31
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 advanced 2.3% on Wednesday, recouping some of its weekly decline, as sentiment benefited from a reprieve in the oil futures market and more stimulus action. The Nasdaq Composite outperformed with a 2.8% gain, followed by the Dow Jones Industrial Average (+2.0%) and Russell 2000 (+1.3%).
Specifically, WTI crude futures gained 19.3%, or $2.23, to $13.80/bbl after a two-day collapse, and the Senate passed a $484 billion stimulus bill targeted for small businesses, hospitals, and COVID-19 testing. What's interesting, though, is that stocks were already indicated for a higher start as oil futures initially traded lower, and the market barely reacted to the initial news of a stimulus agreement yesterday.
To be fair, the reprieve in oil prices might have warranted follow-through buying after the open, and the stimulus bill is now one step closer to providing much-needed relief. A general observation that the S&P 500 declined 4.8% over the past two days, thus presenting a suitable entry point for some investors, likely contributed to the gains, too.
The advance was steady and broad-based, with all 11 S&P 500 sectors closing in positive territory. The information technology sector (+3.9%) leaped ahead amid strength in the semiconductor stocks, which rallied around a positive earnings report from Texas Instruments (TXN 111.98, +5.14, +4.8%). The consumer staples sector (+1.1%) underperformed.
Facebook (FB 182.28, +11.48, +6.7%) and Alphabet (GOOG 1263.21, +46.87, +3.9%) also did some heavy lifting, partially due to the overwhelmingly positive response to Snap's (SNAP 16.95, +4.51, +36.3%) revenue results.
Chipotle Mexican Grill (CMG 882.26, +95.57, +12.2%) was another earnings standout, while shares of Netflix (NFLX 421.42, -12.41, -2.9%) and AT&T (T 29.47, -0.40, -1.3%) declined following their results.
U.S. Treasuries finished on a lower note with longer-dated maturities backtracking from their recent advance. The 2-yr yield increased one basis point to 0.21%, and the 10-yr yield increased five basis points to 0.62%. The U.S. Dollar Index increased 0.1% to 100.40.
Reviewing Wednesday's economic data:
The FHFA Housing Price Index for April rose 0.7% after increasing an upwardly revised 0.5% in March (from +0.3%).
The weekly MBA Mortgage Applications Index declined 0.3% following a 7.3% increase in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report and the New Home Sales report for March on Thursday.
Nasdaq Composite -5.3% YTD
S&P 500 -13.4% YTD
Dow Jones Industrial Average -17.7% YTD
Russell 2000 -28.0% YTD
Market Snapshot
Dow 23475.82 +456.94 (1.99%)
Nasdaq 8495.39 +232.15 (2.81%)
SP 500 2799.31 +62.75 (2.29%)
10-yr Note -4/32 0.614
NYSE Adv 2051 Dec 854 Vol 1.0 bln
Nasdaq Adv 2163 Dec 1060 Vol 3.0 bln
Industry Watch
Strong: Information Technology, Energy
Weak: Consumer Staples, Financials
Moving the Market
-- Stocks recoup some weekly losses in broad-based advance
-- WTI crude spikes 19% to $13.80/bbl
-- Senate passes $484 billion stimulus bill for small businesses, hospitals, and COVID-19 testing
WTI crude futures bounce 19%
22-Apr-20 15:30 ET
Dow +521.38 at 23540.26, Nasdaq +252.76 at 8516.00, S&P +69.89 at 2806.45
[BRIEFING.COM] The S&P 500 currently trades higher by 2.6%, while the Russell 2000 trades higher by 1.5%.
One last look at the S&P 500 sectors shows gains across the board with the information technology sector (+4.0%) out in front and the consumer staples sector (+1.3%) in the back.
WTI crude futures rose $2.23 (+19.3%) to $13.80/ozt, providing a reprieve from the turmoil over the past two days.
Stock Market Update
Stocks extend weekly decline amid continued turmoil in oil market
21-Apr-20 16:15 ET
Dow -631.56 at 23018.88, Nasdaq -297.50 at 8263.24, S&P -86.60 at 2736.56
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 fell 3.1% on Tuesday, closing near session lows for its second straight decline, as risk sentiment remained suppressed by the ongoing turmoil in the oil futures market. The Dow Jones Industrial Average declined 2.7%, the Nasdaq Composite declined 3.5%, and the Russell 2000 declined 2.3%.
The May WTI contract officially expired at $10.01/bbl after falling negative yesterday, but the fundamental problems that drove the contract into negative territory continued to plague the rest of the WTI futures curve. The June WTI contract plunged 43.0%, or $8.70, to $11.57/bbl, although it did touch $6.50/bbl at its low.
Remarkably, the S&P 500 energy sector (-1.7%) performed relatively well despite the risking risks of credit defaults, dividend cuts, and job losses facing many of its components. President Trump may have alleviated some worries on the jobs front after vowing to protect energy companies with appropriate funding.
As for the broader market, there might have been a general sense that it was due for a breather following the incredible rally from the March 23 lows, with the angst in the oil market allowing for some rethinking about the economic outlook.
The information technology sector (-4.1%) underperformed in a rare outing amid broad-based selling, which included an earnings-related decline in IBM (IBM 116.76, -3.65, -3.0%). The utilities (-1.6%) and real estate (-1.6%) sectors declined the least today.
In other earnings news, Dow components Coca-Cola (KO 45.31, -1.22, -2.6%) and Travelers (TRV 101.78, unch) finished mixed following their earnings reports.
Separately, news that Congressional leaders and the Trump administration reached a stimulus bill agreement, which reportedly includes $310 billion in small business funding, was encouraging but not market moving. The Senate and House will still need to vote on the bill.
In the U.S. Treasury market, longer-dated tenors continued to exhibit strength in a safety trade. The 2-yr yield declined one basis point to 0.20%, and the 10-yr yield declined six basis points to 0.57%. The U.S. Dollar Index increased 0.2% to 100.17.
Reviewing Tuesday's economic data:
Existing home sales declined 8.5% m/m in March to a seasonally adjusted annual rate of 5.27 million (Briefing.com consensus 5.35 million). Total sales were up 0.8% year-over-year, marking the ninth straight month that they have increased on a year-over-year basis.
The key takeaway from the report is that it showed existing home sales activity was relatively soft before the COVID-19 impact, with low inventory and high prices crimping sales. Existing home sales are counted when the deals are closed, so the sales activity for March is predicated mostly on contracts signed in January and February.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index and the FHFA Housing Market Index for April on Wednesday.
Nasdaq Composite -7.9% YTD
S&P 500 -15.3% YTD
Dow Jones Industrial Average -19.3% YTD
Russell 2000 -29.0% YTD
Market Snapshot
Dow 23018.88 -631.56 (-2.67%)
Nasdaq 8263.24 -297.50 (-3.48%)
SP 500 2736.56 -86.60 (-3.07%)
10-yr Note +4/32 0.562
NYSE Adv 588 Dec 2275 Vol 1.0 bln
Nasdaq Adv 803 Dec 2418 Vol 3.7 bln
Industry Watch
Strong: Energy, Utilities, Real Estate
Weak: Information Technology
Moving the Market
-- Stocks extend weekly declines, close near session lows
-- WTI crude contract for June tanks 43% to $11.57/bbl
-- Relative weakness in the information technology sector
June WTI contract tanks 43%
21-Apr-20 15:30 ET
Dow -499.77 at 23150.67, Nasdaq -243.77 at 8316.97, S&P -71.87 at 2751.29
[BRIEFING.COM] The S&P 500 is down 2.6%, extending its weekly decline to 4.4%.
One last look at the S&P 500 sectors shows energy (-0.7%) down the least despite the turmoil in the oil futures market. The information technology sector (-3.5%) remains at the bottom of the standings amid broad-based selling interest.
WTI crude futures (June) tanked $8.70 (-43.0%) to $11.57/bbl amid the same issues that took the May WTI contract negative yesterday.
Stocks close lower, as oil contract turns negative
20-Apr-20 16:15 ET
Dow -592.05 at 23650.44, Nasdaq -89.41 at 8560.74, S&P -51.40 at 2823.16
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 1.8% on Monday, although that was relatively modest given the implosion in the oil market where the expiring May contract for WTI crude closed negative for the first time ever. The Dow Jones Industrial Average declined 2.4%, the Nasdaq Composite declined 1.0%, and the Russell 2000 declined 1.3%.
Specifically, WTI crude futures for May delivery collapsed 306%, or $55.83, to -$37.63/bbl ahead of tomorrow's expiration, as no one presumably wanted to take physical delivery given the well-documented storage constraints and lack of demand. The negative price also indicated that producers are paying someone to take their oil.
The historic, and mind-boggling, occurrence appeared to spoil an intraday rebound in stocks, which started to accelerate losses heading into the futures settlement time at 2:30 p.m. ET. Around that same time, it was also reported that a vote to replenish the small business loan program was delayed in the Senate due to ongoing negotiations.
All 11 S&P 500 sectors closed in negative territory, near session lows, with the energy (-3.2%), real estate (-3.7%), and utilities (-3.9%) sectors leading the retreat. The health care (-0.8%) and communication services (-0.9%) sectors declined less than 1%.
It should be noted, though, that the WTI futures curve did show escalating prices amid expectations that prices should rebound with production cuts and hopefully increased demand. For instance, the June WTI crude futures contract settled at $20.30/bbl, although that was still an 18.9% decline.
Back to stocks, Walt Disney (DIS 102.26, -4.37, -4.1%) and Boeing (BA 143.61, -10.39, -6.8%) underperformed the broader market following a pair of analyst downgrades and negative-sounding reports. Disney is reportedly suspending pay for 100,000 employees, while a GE leasing subsidiary canceled 69 orders of Boeing's 737 MAX.
U.S. Treasuries finished mixed with longer-dated maturities continuing to show relative strength. The 2-yr yield increased one basis point to 0.21%, while the 10-yr yield declined three basis points to 0.63%. The U.S. Dollar Index increased 0.2% to 99.98.
Investors did not receive any economic data on Monday. Looking ahead, investors will receive Existing Home Sales for March on Tuesday.
Nasdaq Composite -4.6% YTD
S&P 500 -12.6% YTD
Dow Jones Industrial Average -17.1% YTD
Russell 2000 -27.3% YTD
Market Snapshot
Dow 23650.44 -592.05 (-2.44%)
Nasdaq 8560.74 -89.41 (-1.03%)
SP 500 2823.16 -51.40 (-1.79%)
10-yr Note +2/32 0.628
NYSE Adv 675 Dec 2242 Vol 1.1 bln
Nasdaq Adv 1252 Dec 2004 Vol 3.7 bln
Industry Watch
Strong: Health Care, Communication Services
Weak: Energy, Real Estate, Utilities
Moving the Market
-- Stocks close lower as oil contract turns negative
-- WTI crude contract for May collapses to -$37.63/bbl; prices show rebound in later contracts
-- Vote on small business funding delayed in Senate
WTI crude closes at negative $37 in historic session
20-Apr-20 15:30 ET
Dow -580.12 at 23662.37, Nasdaq -74.70 at 8575.45, S&P -49.74 at 2824.82
[BRIEFING.COM] The S&P 500 and Russell 2000 both trade lower by 1.7%.
Oil tanker companies like Frontline (FRO 10.89, +1.29, +13.7%) are showing strength after the negative print in oil prices today, as producers are essentially paying companies to take their oil.
WTI crude for May delivery plunged 306.0% (-$55.83) to -$37.63/bbl, while the June contract fell 18.9% to $20.30/bbl.
Halliburton bucks energy decline after earnings report
20-Apr-20 15:00 ET
Dow -526.60 at 23715.89, Nasdaq -60.39 at 8589.76, S&P -45.66 at 2828.90
[BRIEFING.COM] The S&P 500 is down back at session lows with a 1.6% decline.
All sectors are currently negative with the energy sector (-3.9%) surpassing the utilities sector (-3.7%) at the bottom of the standings. Halliburton (HAL 7.60, +0.03, +0.3%) bucks the energy trend following its earnings results.
Looking ahead in earnings, IBM (IBM 121.03, +0.90, +0.7%) will report results after the close, while Coca-Cola (KO 47.44, -0.63, -1.3%) will report tomorrow morning.
Stocks end positive week near session highs
17-Apr-20 16:15 ET
Dow +704.81 at 24242.49, Nasdaq +117.78 at 8650.15, S&P +75.01 at 2874.56
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 advanced 2.7% on Friday amid hopes for a COVID-19 treatment and optimism about reopening the economy. The Dow Jones Industrial Average (+3.0%) and Russell 2000 (+4.3%) outpaced the benchmark index, while the Nasdaq Composite (+1.4%) had a more modest performance.
A report published by Stat News indicated that most coronavirus patients treated with Gilead Sciences' (GILD 83.99, +7.45, +9.7%) remdesivir showed a rapid recovery in a trial at the University of Chicago Medicine. Note, Gilead did not issue an official statement regarding the trial, which lacked a placebo group for comparison.
The possibility that there might be an effective COVID-19 treatment, though, added to the positive sentiment in the market as it could restore some confidence for consumers when the economy starts to reopen. President Trump said yesterday that some states already satisfied the administration's new guidelines to reopen before May.
While some investors remained cautious, the market continued to price in a better-than-feared economic outlook. All 11 S&P 500 sectors posted gains to end the week with relative strength found in the energy (+10.4%) and financials (+5.6%) sectors.
The information technology sector (+1.4%) underperformed today amid relative weakness in Apple (AAPL 282.80, -3.89, -1.4%), which was downgraded to Sell from Neutral at Goldman Sachs on a view that iPhone sales will take more time to recover than expected.
Boeing (BA 154.00, +19.76, +14.7%) shares rose nearly 15% after the company said it plans to restart production at its Puget Sound facility next week. Procter & Gamble (PG 124.69, +3.19, +2.6%) advanced with the broader market after it beat earnings estimates.
U.S. Treasuries were holding steady despite the stock market gains amid a weak Q1 GDP print out of China and continued weakness in oil prices ($18.20/bbl, -1.67, -8.4%). Longer-dated maturities saw modest selling, though, after the New York Fed stated it will reduce its Treasury purchases next week to ~$75 billion from ~$150 billion this week.
The 2-yr yield increased one basis point to 0.20%, and the 10-yr yield increased four basis points to 0.65%. The U.S. Dollar Index declined 0.2% to 99.78.
Friday's economic data was limited to the Conference Board's Leading Economic Index for March, which declined 6.7% (Briefing.com consensus -7.1%) following a revised 0.2% decline in February (from +0.1%). Investors will not receive any economic data on Monday.
Nasdaq Composite -3.6% YTD
S&P 500 -11.0% YTD
Dow Jones Industrial Average -15.1% YTD
Russell 2000 -26.3% YTD
Market Snapshot
Dow 24242.49 +704.81 (2.99%)
Nasdaq 8650.15 +117.78 (1.38%)
SP 500 2874.56 +75.01 (2.68%)
10-yr Note -3/32 0.650
NYSE Adv 2470 Dec 427 Vol 1.4 bln
Nasdaq Adv 2616 Dec 654 Vol 4.3 bln
Industry Watch
Strong: Financials, Industrials, Energy
Weak: Consumer Staples, Information Technology, Communication Services
Moving the Market
-- Stock market ends week near session highs amid hopes for COVID-19 treatment, optimism about reopening the economy
-- Broad-based advance with relative strength in the energy and financial sectors
-- Gilead Sciences' (GILD) remdesivir shows promising therapeutic signs for COVID-19
WTI crude extends decline by 8%
17-Apr-20 15:30 ET
Dow +498.49 at 24036.17, Nasdaq +63.29 at 8595.66, S&P +53.24 at 2852.79
[BRIEFING.COM] The S&P 500 is up 1.9%, while the Russell 2000 outperforms with a 3.7% gain.
One last look at the S&P 500 sectors shows energy (+8.1%) and financials (+4.7%) firmly atop the standings, while the information technology (+0.6%), communication services (+0.8%), and consumer staples (+0.9%) sectors are up less than 1.0%.
WTI crude futures settled down $1.67 (-8.4%) to $18.20/bbl amid a lack of confidence in the fundamentals, which include weak demand.
Large-cap indices close higher despite more bad data
16-Apr-20 16:20 ET
Dow +33.33 at 23537.68, Nasdaq +139.19 at 8532.37, S&P +16.19 at 2799.55
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market closed mixed on Thursday, as investors responded to another round of weak economic data by continuing to buy shares of technology companies while avoiding distressed sectors like financials and energy. The Nasdaq Composite rose 1.7%, while the S&P 500 (+0.6%) and Dow Jones Industrial Average (+0.1%) posted smaller gains. The Russell 2000 declined 0.5%.
Briefly, weekly jobless claims totaled 5.245 million (Briefing.com consensus 5.000 million), down 1.37 million from the prior week. Housing starts for March declined 22.3% m/m while building permits fell 6.8% m/m. The Philadelphia Fed Index for April plunged 43.9 points to -56.6 (Briefing.com consensus -25.0) for its lowest reading since July 1980.
The data was ugly like yesterday's, but unlike yesterday the stock market was more accepting of the data amid a tapering shock value. Regarding the economic outlook, investors were reminded today that the road ahead may not be as smooth as had hoped after New York extended its economic restrictions until May 15. The White House is expected to release a "flexible" guideline today for states to consider.
This viewpoint didn't dampen risk sentiment, but instead led investors into stocks that have outperformed this year: large-cap technology names like Amazon (AMZN 2408.19, +100.51, +4.4%), Microsoft (MSFT 177.04, +5.16, +3.0%), and many of the semiconductor stocks. The latter drew support from encouraging quarterly results and guidance from Taiwan Semi (TSM 52.40, +2.74, +5.5%).
These gains contributed the outperformance of the S&P 500 consumer discretionary (+1.9%) and information technology (+1.2%) sectors. The health care sector (+2.2%), though, advanced the most after Abbott Labs (ABT 96.00, +5.06, +5.6%) was the latest health care company to beat earnings estimates.
Interestingly, declining issues outpaced advancing issues in both the Nasdaq and NYSE despite the positive indication in the major indices. Laggards were found in areas that have underperformed this year, specifically the energy (-4.0%), financials (-1.7%), and industrials (-0.8%) sectors.
The industrials space was pressured by Boeing (BA 134.24, -11.74, -8.0%) and airline stocks after United Airlines (UAL 28.21, -3.65, -11.5%) provided shareholders a discouraging update. The company said it expects travel demand to remain suppressed for the remainder of 2020 and likely into next year, augmenting worries about a prolonged economic recovery.
U.S. Treasuries continued to show relative strength, pushing yields lower across the curve. The 2-yr yield declined one basis point to 0.19%, and the 10-yr yield declined three basis points to 0.61%. The U.S. Dollar Index increased 0.6% to 100.06. WTI crude declined 0.3% to $19.89/bbl.
Reviewing Thursday's economic data:
Initial claims for the week ending April 11 were "only" 5.245 million (Briefing.com consensus 5.000 million), down 1.37 million from the prior week. Continuing claims for the week ending April 4, meanwhile, were 11.976 million, up 4.53 million from the prior week.
The key takeaway from the report is that the labor market is wrecked right now; and gainful employment with gainful income, which is missing for so many, is what is needed to drive an economy that relies heavily on consumer spending.
Housing starts declined 22.3% m/m in March to a seasonally adjusted annual rate of 1.216 million (Briefing.com consensus 1.300 million). Building permits were down 6.8% m/m to a seasonally adjusted annual rate of 1.353 million (Briefing.com consensus 1.297 million).
Building permits were better than expected because of increases for multi-unit dwellings, yet the key takeaway for this leading indicator is that permits for single-unit housing were down between 6.4% and 20.2% across all regions.
The Philadelphia Fed Index for April plunged to -56.6 (lowest since July 1980) from -12.7 in March.
Looking ahead, investors will receive the Conference Board's Leading Economic Index for March on Friday.
Nasdaq Composite -4.9% YTD
S&P 500 -13.4% YTD
Dow Jones Industrial Average -17.5% YTD
Russell 2000 -29.4% YTD
Market Snapshot
Dow 23537.68 +33.33 (0.14%)
Nasdaq 8532.37 +139.19 (1.66%)
SP 500 2799.55 +16.19 (0.58%)
10-yr Note +3/32 0.610
NYSE Adv 1084 Dec 1803 Vol 1.1 bln
Nasdaq Adv 1438 Dec 1791 Vol 3.9 bln
Industry Watch
Strong: Consumer Discretionary, Information Technology, Health Care
Weak: Energy, Financials, Industrials
Moving the Market
-- Nasdaq outperforms amid strength in technology stocks; S&P 500, Dow inch higher
-- Jobless claims total 5.245 million (Briefing.com consensus 5.0 million); Housing starts for March declined 22.3% m/m while building permits fell 6.8% m/m.
-- Continued weakness in financial and energy sectors
-- Declining issues outpace advancing issues in Nasdaq and NYSE
WTI crude posts slight decline
16-Apr-20 15:30 ET
Dow -38.28 at 23466.07, Nasdaq +89.70 at 8482.88, S&P +8.47 at 2791.83
[BRIEFING.COM] The S&P 500 continues to trade above its flat line with a 0.3% gain, while the Russell 2000 lags with a 1.7% decline.
One last look at the S&P 500 sectors shows health care (+1.9%) and consumer discretionary (+1.3%) remaining atop the standings, while energy (-3.4%) and financials (-2.0%) continue to underperform with noticeable losses.
WTI crude futures settled down $0.06 (-0.3%) to $19.89/bbl.
Stocks close lower amid weak economic data
15-Apr-20 16:20 ET
Dow -445.41 at 23504.35, Nasdaq -122.56 at 8393.18, S&P -62.70 at 2783.36
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 2.2% on Wednesday, as the release of historically weak economic data undercut risk sentiment. The Dow Jones Industrial Average lost 1.9%, the Nasdaq Composite lost 1.4% to snap a four-session winning streak, and the Russell 2000 underperformed with a 4.3% decline.
Highlighting the data: retail sales declined 8.7% m/m in March (Briefing.com consensus -10.0%), industrial production declined 5.4% m/m in March (Briefing.com consensus -3.3%), the Empire State Manufacturing Survey for April plunged 57 points to -78.2 (Briefing.com consensus -32.0), and the NAHB Housing Market Index for April plunged 42 points to 30 (Briefing.com consensus 57).
In addition, more banks bolstered their loan-loss reserves to prepare for tougher times ahead, the Fed's Beige Book for April noted a sharp contraction in economic activity with business contacts expecting conditions to worsen, and The Wall Street Journal reported that the Paycheck Protection Program for small businesses was on pace to run out of money today.
The plethora of reminders that economic conditions are woeful contributed to losses in all 11 S&P 500 sectors, but the S&P 500 remarkably still finished above Monday's closing level. The financials sector (-4.3%) was an influential laggard following earnings reports from Bank of America (BAC 22.19, -1.54, -6.5%), Citigroup (C 42.86, -2.56, -5.6%), and Goldman Sachs (GS 178.52, +0.29, +0.2%).
The energy sector (-4.7%) declined the most, though, as the group remained pressured by lower oil prices after the EIA projected a 9.2 mb/d decline in oil demand in 2020. WTI crude futures settled just below $20.00/bbl, losing 1.3%, or $0.27, to $19.95/bbl.
UnitedHealth (UNH 281.68, +11.18, +4.1%) was a notable standout after the Dow component reported better-than-expected earnings results. Its outperformance limited the decline in the health care sector (-0.5%).
Separately, airline stocks finished mixed after the companies reached individual agreements with the government for payroll relief. Shares of American Airlines (AAL 12.29, +0.35, +2.9%) closed higher, while Delta Air Lines (DAL 24.35, -0.19, -0.8%) closed lower.
Longer-dated U.S. Treasuries exhibited strength in a textbook trade given the negative economic data and decline in stocks. The 2-yr yield declined two basis points to 0.20%, and the 10-yr yield declined 11 basis points to 0.64%. The U.S. Dollar Index increased 0.7% to 99.57.
Reviewing Wednesday's big batch of data:
Retail sales declined 8.7% m/m in March (Briefing.com consensus -10.0%) following an upwardly revised 0.4% decline (from -0.5%) in February. Excluding autos, sales declined 4.5% (Briefing.com consensus -7.6%) following an unrevised 0.4% decline in February.
The key takeaway from the report is that it captured the impact of the COVID-19 shutdown situation, as spending in discretionary categories cratered while spending for essential items accelerated in a big way.
Industrial production declined 5.4% m/m in March (Briefing.com consensus -3.3%) following a downwardly revised 0.5% increase (from 0.6%) in February. Total capacity utilization was 72.7% (Briefing.com consensus 74.1%) following an unrevised 77.0% in February.
The key takeaway from the report is that it captures the severity of the shutdown situation, best reflected in the pronouncement that the downturn in industrial production was the worst since 1946.
The New York Fed's Empire State Manufacturing Survey plummeted 57 points to -78.2 (Briefing.com consensus -32.0).
The NAHB Housing Market Index for April plunged to 30 (Briefing.com consensus 57) from 72 in March.
Business inventories decreased 0.4% in February, as expected, while the January reading was revised down to -0.3% from -0.1%.
The Mortgage Bankers Applications Index increased 7.3% week-over-week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims, Housing Starts and Building Permits for March, and the Philadelphia Fed Index for April on Thursday.
Nasdaq Composite -6.5% YTD
S&P 500 -13..9% YTD
Dow Jones Industrial Average -17.6% YTD
Russell 2000 -29.1% YTD
Market Snapshot
Dow 23504.35 -445.41 (-1.86%)
Nasdaq 8393.18 -122.56 (-1.44%)
SP 500 2783.36 -62.70 (-2.20%)
10-yr Note +12/32 0.633
NYSE Adv 480 Dec 2424 Vol 1.1 bln
Nasdaq Adv 742 Dec 2483 Vol 3.3 bln
Industry Watch
Strong: Health Care
Weak: Financials, Energy, Materials
Moving the Market
-- Stocks retreat following weak economic data
-- Retail sales drop 8.7% m/m in March, Industrial Production declines 5.4% m/m in March
-- More banks bolster loan-loss reserves
-- U.S. Treasuries exhibit strength
WTI crude settles below $20/bbl
15-Apr-20 15:30 ET
Dow -436.09 at 23513.67, Nasdaq -97.09 at 8418.65, S&P -58.83 at 2787.23
[BRIEFING.COM] The S&P 500 currently trades lower by 2.1%, while the Russell 2000 continues to underperform with a disappointing 3.7% loss.
One last look at the S&P 500 sectors shows energy (-4.7%), materials (-4.5%), real estate (-4.4%), and financials (-4.2%) down more than 4.0%, while the health care (-0.3%) and communication services (-0.9%) sectors are down less than 1.0%.
WTI crude futures settled down $0.27 (-1.3%) to $19.95/bbl, as investors remained unconvinced that the upcoming production cuts will be enough to offset the lack of oil demand.
Stock market rises despite tepid bank results
14-Apr-20 16:20 ET
Dow +558.99 at 23949.76, Nasdaq +323.32 at 8515.74, S&P +84.43 at 2846.06
https://www.briefing.com/stock-market-update
[BRIEFING.COM] It was a good day for the stock market on Tuesday, as investors expressed optimism in an economic recovery despite the uncertainty signaled by some of the nation's most influential banks. The Nasdaq Composite rose 4.0%, pulling ahead of the S&P 500 (+3.1%), Dow Jones Industrial Average (+2.4%), and Russell 2000 (+2.1%), for its fourth straight advance.
JPMorgan Chase (JPM 95.50, -2.69, -2.7%) and Wells Fargo (WFC 30.18, -1.25, -4.0%) kicked off the Q1 earnings reporting season with underwhelming quarterly results, but more relevantly, they stirred some concern by substantially increasing their provisions for credit losses. The latter represented the challenges the companies are preparing for given the unprecedented circumstances.
The stock market wasn't concerned with uncertainty today, though, as it remained comforted in the notion that the economy will strategically reopen through a coordinated plan from federal and state officials. In addition, better-than-feared trade data for March out of China may have also aided investor sentiment.
The S&P 500 consumer discretionary (+4.2%) and information technology (+4.2%) sectors outperformed on the back of strong gains from Amazon (AMZN 2283.32, +114.45, +5.3%), Apple (AAPL 287.05, +13.80, +5.1%), and Microsoft (MSFT 173.70, +8.19, +5.0%). The health care sector (+3.3%) was led higher by Johnson & Johnson (JNJ 146.03, +6.26, +4.5%) following its quarterly results.
It appeared, then, that only the financials (+0.3%) and energy (-0.5%) sectors today reflected underlying concerns many investors still have with the economy. The energy space was specifically pressured by a 10% drop in oil prices ($20.22/bbl, -$2.20, -9.8%), as the industry remained burdened by the lack of meaningful oil demand despite the upcoming production cuts.
U.S. Treasuries held firm despite the bullish price action in the stock market. The 2-yr yield declined one basis point to 0.22%, and the 10-yr yield was unchanged at 0.75%. The U.S. Dollar Index declined 0.5% to 98.85.
Tuesday's economic data was limited to Import and Export Prices for March: import prices declined 2.3%, while prices, excluding oil, were unchanged. Export prices declined 1.6% in March, and prices, excluding agriculture, declined 1.5%.
Looking ahead, investors will receive a deluge of reports on Wednesday: Retail Sales for March, Industry Production and Capitalization Utilization for March, the Empire State Manufacturing Index for April, the NAHB Housing Market Index for April, the weekly MBA Mortgage Applications Index, Business Inventories for February, and Net Long-Term TIC Flows for February.
Nasdaq Composite -5.1% YTD
S&P 500 -11.9% YTD
Dow Jones Industrial Average -16.1% YTD
Russell 2000 -25.8% YTD
Market Snapshot
Dow 23949.76 +558.99 (2.39%)
Nasdaq 8515.74 +323.32 (3.95%)
SP 500 2846.06 +84.43 (3.06%)
10-yr Note +24/32 0.747
NYSE Adv 2195 Dec 726 Vol 1.2 bln
Nasdaq Adv 2278 Dec 942 Vol 3.7 bln
Industry Watch
Strong: Consumer Discretionary, Information Technology
Weak: Financials, Energy
Moving the Market
-- Stock market closes firmly higher amid a positive sentiment regarding the economy
-- JPMorgan Chase (JPM) and Wells Fargo (WFC) substantially increase provisions for credit losses, shares fall
-- Strength in mega-cap technology stocks
-- Oil prices drop 10% amid persistent demand problems
WTI crude futures fall 10%
14-Apr-20 15:25 ET
Dow +483.64 at 23874.41, Nasdaq +307.87 at 8500.29, S&P +76.73 at 2838.36
[BRIEFING.COM] The S&P 500 is up 2.8%, while the Russell 2000 underperforms with a 1.7% gain.
One last look at the S&P 500 sectors shows consumer discretionary (+3.9%), consumer staples (+3.8%), and information technology (+3.7%) leading the market in gains, while the energy (-0.7%) and financials (-0.3%) sectors trade lower.
WTI crude futures settled down a disappointing $2.20 (-9.8%) to $20.22/bbl, as the market remained burdened by the lack of oil demand despite the upcoming production cuts.
S&P 500 declines, Nasdaq gains to start the week
13-Apr-20 16:15 ET
Dow -328.60 at 23390.77, Nasdaq +38.85 at 8192.42, S&P -28.19 at 2761.63
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 1.0% on Monday in a slight reversal from last week's rally, while relative strength in the technology stocks helped lift the Nasdaq Composite (+0.5%). The Dow Jones Industrial Average fell 1.4%, and the Russell 2000 fell 2.8%.
There wasn't much conviction in today's session ahead of the Q1 earnings reports from the leading U.S. banks this week. Perhaps some skittishness regarding the loan-loss reserves these banks are accruing contributed to the influential drag from the S&P 500 financials sector (-3.6%).
Sellers were kept in check, though, as stocks drifted sideways for most of the session and closed well off intraday lows after a brief tumble after the open. The S&P 500 real estate sector (-4.6%) declined the most, while the consumer discretionary sector (+1.1%) finished comfortably in positive territory.
Interestingly, a multinational agreement to cut oil production was unable to stir much enthusiasm within the energy sector (-0.4%). Specifically, OPEC and other non-OPEC members agreed to cut production by 9.7 mb/d from May 1-June 30, then 7.7 mb/d from July 1-Dec. 31, and then 5.8 mb/d from Jan. 1, 2021-April 30, 2022.
WTI crude futures struggled for direction and ultimately settled the session down 2.0%, or $0.45, to $22.42/bbl, suggesting that investors were not convinced that the production cuts alone would save an industry still facing demand problems caused by COVID-19. The economy is expected to gradually reopen in May, but the speed and scope of a recovery remained uncertain.
Investors' appetite for growth, meanwhile, continued to lead buyers toward technology companies, including Amazon (AMZN 2168.87, +126.11, +6.2%), Apple (AAPL 273.25, +5.26, +2.0%), and Netflix (NFLX 396.72, +26.00, +7.0%). Amazon stepped up efforts to meet strong customer demand, while Netflix benefited from a positive note in Barron's.
Separately, shares of Caterpillar (CAT 114.14, -10.89, -8.7%) dropped nearly 9% after the stock was downgraded to Underperform from Neutral at Bank of America/Merrill Lynch.
U.S. Treasuries ended the quiet session on a lower note. The 2-yr yield increased one basis point to 0.23%, and the 10-yr yield increased two basis points to 0.75%. The U.S. Dollar Index declined 0.1% to 99.42.
Investors did not receive any economic data on Monday. Looking ahead, investors will receive Import and Export Prices for March on Tuesday.
Nasdaq Composite -8.7% YTD
S&P 500 -14.5% YTD
Dow Jones Industrial Average -18.0% YTD
Russell 2000 -27.4% YTD
Market Snapshot
Dow 23390.77 -328.60 (-1.39%)
Nasdaq 8192.42 +38.85 (0.48%)
SP 500 2761.63 -28.19 (-1.01%)
10-yr Note -2/32 0.755
NYSE Adv 773 Dec 2155 Vol 1.2 bln
Nasdaq Adv 1270 Dec 1979 Vol 3.1 bln
Industry Watch
Strong: Consumer Discretionary, Information Technology, Communication Services
Weak: Financials, Real Estate, Utilities
Moving the Market
-- S&P 500 declines, Nasdaq gains to start the week
-- OPEC and non-OPEC members agree to cut oil production by 9.7 million b/d from May 1-June 30
-- Relative weakness in the financials sector ahead of Q1 earnings reports this week
WTI crude settles lower despite production cut agreement
13-Apr-20 15:25 ET
Dow -396.65 at 23322.72, Nasdaq -3.80 at 8149.77, S&P -38.54 at 2751.28
[BRIEFING.COM] The S&P 500 is currently down 1.3%, while the Nasdaq has returned to its flat line.
One last look at the S&P 500 sectors shows consumer discretionary (+1.0%) as the lone sector trading higher, while the real estate (-4.5%), utilities (-3.5%), and financials (-3.4%) sectors weigh on the broader market.
WTI crude futures settled today's session down $0.45 (-2.0%) to $22.42/bbl despite OPEC and non-OPEC members agreeing to production cuts that last through April 2022.
Shortened Week Ends on Higher Note
09-Apr-20 16:20 ET
Dow +285.80 at 23719.37, Nasdaq +62.67 at 8153.57, S&P +39.84 at 2789.82
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market climbed to end the holiday-shortened week, but the Thursday affair saw some intraday volatility. The S&P 500 gained 1.5%, extending this week's advance to 12.1% while the Nasdaq (+0.8%) underperformed but still gained 10.6% for the week.
The market climbed out of the gate after the release of another horrific weekly initial claims report was masked by news of more unprecedented action from the Fed to help none of the 16 million people who got fired over the past three weeks. Of course, the Fed would protest that direct support is not in its mandate, but neither is the ability to purchase junk bond ETFs or collateralized debt obligations, which can now be acquired by the Fed. The central bank also added another $2.30 trln in emergency lending capacity for businesses and municipalities. Fed Chairman, Jay Powell, said that the central bank will continue using its powers forcefully, proactively, and aggressively.
In Europe, the Bank of England announced that it will begin directly financing the U.K.'s fiscal needs while German Chancellor, Angela Merkel, rejected Italy's demand for the issuance of joint euro debt.
Also of note, the Japanese government will reportedly spend up to $2.20 bln to help Japanese manufacturers move their production facilities out of China.
Equities backpedaled from their highs in the afternoon, but ten out of eleven sectors were able to finish in the green. The gains were paced by groups like financials (+5.2%), real estate (+5.2%), and utilities (+4.8%).
The top-weighted technology sector (UNCH) lagged, which was also the case earlier in the week. The sector climbed 10.6% for the week while chipmakers also underperformed today. The PHLX Semiconductor Index lost 2.3%, narrowing this week's gain to 11.0%.
Costco (COST 300.01, -5.96, -2.0%) reported a 12.1% jump in domestic comparable sales in March, but its stock finished lower since the market had already priced in strong March sales.
The energy sector (-1.1%) turned negative in the afternoon amid volatility in crude oil. That volatility followed conflicting headlines from the OPEC+ meeting, where producers struggled to agree to a large output cut. The Wall Street Journal reported in the late afternoon that daily output in May and June will be reduced by ten million barrels. Crude oil ended the day lower by $2.30, or 9.1%, at $22.87/bbl.
Treasuries finished near their highs, sending the 10-yr yield lower by four basis points to 0.73%.
The U.S. Dollar Index fell 0.6% to 99.50, widening this week's loss to 1.0%.
Reviewing today's economic data:
It was another dismal initial claims report, with 6.606 million jobless claims filed for the week ending April 4 (Briefing.com consensus 5.000 million), bringing the three-week total to 16,780,000 after revisions. Continuing claims for the week ending March 28 hit a record high 7.455 million
The key takeaway from the jobless claims data is that the number of filings is simply astounding and a true sign of the vast impact of the sudden economic stop. Unfortunately, it likely still doesn't capture the fullness of the impact as it's reasonable to assume that the system for filing claims is overwhelmed and not facilitating every effort to file for jobless benefits
The preliminary reading for the University of Michigan's Consumer Sentiment Index for April plummeted to 71.0 (Briefing.com consensus 79.3) from 89.1 in March. This is the largest monthly decline on record
The key takeaway from the report is that the more modest decline in the Expectations Index captures a feeling that the impact of the COVID-19 cases and death rates could soon peak, allowing for a restart of the economy
The Producer Price Index for final demand declined 0.2% m/m in March (Briefing.com consensus -0.4%). Core PPI was up 0.2% (Briefing.com consensus -0.1%)
The key takeaway from the report is that it doesn't fully reflect the impact of the COVID-19 shutdown measures as the pricing date for the survey was March 10
Wholesale inventories decreased by 0.7% in February (Briefing.com consensus -0.4%) after decreasing a revised 0.6% (from -0.4%) in January
There is no data scheduled for Monday.
Nasdaq Composite -9.1% YTD
S&P 500 -13.7% YTD
Dow Jones Industrial Average -16.9% YTD
Russell 2000 -25.3% YTD
Market Snapshot
Dow 23719.37 +285.80 (1.22%)
Nasdaq 8153.57 +62.67 (0.77%)
SP 500 2789.82 +39.84 (1.45%)
10-yr Note +9/32 0.729
NYSE Adv 2495 Dec 418 Vol 1.51 bln
Nasdaq Adv 2502 Dec 735 Vol 4.10 bln
Industry Watch
Strong: Financials, Real Estate, Utilities, Industrials
Weak: Health Care, Consumer Staples, Technology, Communication Services
Moving the Market
Continued volatility in crude oil
Federal Reserve to provide additional $2.30 trln in emergency lending
Crude Oil Ends Sharply Lower
09-Apr-20 15:25 ET
Dow +255.31 at 23688.88, Nasdaq +21.70 at 8112.60, S&P +32.06 at 2782.04
[BRIEFING.COM] The S&P 500 trades higher by 1.2% with 30 minutes remaining in the session. The index is on track to gain 11.8% for the week.
Crude oil ended today's pit session lower by $2.30, or 9.1%, at $22.87/bbl after a sharp reversal from its session high at $28.36/bbl. The energy sector, meanwhile, is down 2.3%.
The pullback in oil took place as OPEC+ could not agree to an output reduction, though the meeting is continuing at this time.
Stocks Revisit Highs From Tuesday
08-Apr-20 16:20 ET
Dow +779.71 at 23433.57, Nasdaq +203.64 at 8090.90, S&P +90.57 at 2749.98
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market rallied on Wednesday, though the advance found resistance near Tuesday's opening high. The S&P 500 gained 3.4% while the Russell 2000 (+4.6%) outperformed.
Equities got off to a shaky start that had the S&P 500 trading just six points above yesterday's low during the first hour of action. However, most heavily weighted sectors showed relative strength during the initial downdraft, which allowed for a swift bounce that continued into the afternoon.
The rally took place as participants remained optimistic about the recent slowdown in new coronavirus cases, which led to speculation about parts of the U.S. economy being able to reopen soon. NIAID Director Fauci said death models are improving and that a turnaround in COVID-19 would be likely after this week.
The optimism about the future overshadowed a couple reminders about how dire the recent past has been. The World Trade Organization expects that global GDP will be down between 2.5% and 8.8% this year while the Organization for Economic Cooperation and Development noted today that its leading indicators are pointing to a sharp slowdown in all major economies except for India, where a less drastic slowdown has being observed.
All eleven sectors ended in the green with seven groups finishing ahead of the broader market. Real estate (+7.4%) and energy (+6.7%) outperformed throughout the day while utilities (+5.4%) and materials (+5.0%) ascended the leaderboard in late trade.
The top-weighted technology sector (+2.7%) kept pace with the broader market for the bulk of the session but couldn't keep up during the final stretch. However, chipmakers outperformed, sending the PHLX Semiconductor Index higher by 3.4%.
Zoom Video (ZM 117.81, +4.06, +3.6%) took part in the early rally, but surrendered the bulk of its gain after it was reported that Google banned its employees from using the software due to concerns about potential data leaks. Government officials from Germany and Taiwan have already been told not to use Zoom's video conferencing software.
Elsewhere, McDonald's (MCD 177.49, +1.90, +1.1%) rallied despite revealing that its comparable sales fell 3.4% in Q1 due to a 6.9% plunge in international sales while domestic sales ticked up 0.1%. The company reported strong performance for January and February but comparable sales in March were down 22.2%, led by a 34.7% drop in international sales. The company withdrew its outlook for the longer term and suspended its share buyback program.
Treasuries ended the day in mixed fashion, as shorter tenors climbed while longer tenors retreated, sending the 10-yr yield higher by three basis points to 0.76%.
Crude oil jumped $1.39, or 5.9%, to $25.17/bbl, reclaiming a portion of its loss from yesterday even though the latest weekly inventory report showed another massive build.
Economic data released this morning was limited to the weekly MBA Mortgage Index, which fell 17.9% to follow last week's 15.3% increase. The Purchase Index dropped 12.2% while the Refinance Index slumped 19.4%.
March PPI (Briefing.com consensus -0.4%; prior -0.6%), Core PPI (Briefing.com consensus -0.1%; prior -0.3%), weekly Initial Claims (Briefing.com consensus 5.00 mln; prior 6.65 mln), and Continuing Claims (prior 3.029 mln) will be reported at 8:30 ET while February Wholesale Inventories (Briefing.com consensus -0.4%) and the preliminary reading of the Michigan Consumer Sentiment for April (Briefing.com consensus 79.3; prior 89.1) will be released at 10:00 ET.
Nasdaq Composite -9.8% YTD
S&P 500 -14.8% YTD
Dow Jones Industrial Average -17.9% YTD
Russell 2000 -28.6% YTD
Market Snapshot
Dow 23433.57 +779.71 (3.44%)
Nasdaq 8090.90 +203.64 (2.58%)
SP 500 2749.98 +90.57 (3.41%)
10-yr Note -2/32 0.764
NYSE Adv 2592 Dec 316 Vol 1.21 bln
Nasdaq Adv 2721 Dec 539 Vol 3.44 bln
Industry Watch
Strong: Energy, Technology, Industrials, Consumer Discretionary, Real Estate
Weak: Consumer Staples, Health Care, Communication Services
Moving the Market
Stocks display early strength despite weak showing from other global equity markets
U.S. administration officials reportedly preparing plans for reopening of the economy
Daylong Fade Produces Modest Losses
07-Apr-20 16:20 ET
Dow -26.13 at 22653.86, Nasdaq -25.98 at 7887.26, S&P -4.27 at 2659.41
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The major averages ended Tuesday with modest losses after surrendering their opening gains. The S&P 500 (-0.2%) slipped four points after starting the day with a 93-point gain while the Nasdaq (-0.3%) underperformed slightly.
Equities jumped out of the gate after markets across Asia and Europe had another good outing overnight. The sharply higher start was attributed to optimism about a potential plateau in coronavirus cases, but the key indices hit their best levels within the first five minutes of action, followed by a daylong slide that sent the Nasdaq and S&P 500 into negative territory.
Six out of eleven sectors ended the day with gains ranging from 0.1% (real estate) to 2.4% (materials) while the top-weighted technology sector (-1.1%) underperformed from the start.
Apple (AAPL 259.43, -3.04, -1.2%) and many other large tech components struggled in the afternoon. Chipmakers finished a bit ahead of the sector, with the PHLX Semiconductor Index surrendering 0.5%.
On the flip side, materials (+2.4%) and energy (+2.0%) outperformed throughout the day. The energy sector was able to remain in the green, even though crude oil slumped into the pit close, ending lower by 9.3% at $23.78/bbl. Exxon Mobil (XOM 41.24, +0.77, +1.9%) announced a 30% reduction to its capital spending plans for FY20.
As for materials, the group's advance was paced by gains in names like Dow (DOW 32.33, +1.79, +5.9%), Freeport-McMoRan (FCX 7.59, +0.40, +5.6%), and Eastman Chemical (EMN 52.87, +2.69, +5.4%). Martin Marietta Materials (MLM 185.42, +8.46, +4.8%) and Vulcan Materials (VMC 107.92, +4.75, +4.6%) also had a good showing, likely due to expectations that the next fiscal stimulus will include an infrastructure component.
Regarding additional stimulus, House Speaker Nancy Pelosi told Democratic lawmakers that she wants the next spending package to be at least $1 trillion. Meanwhile, Senate Majority Leader, Mitch McConnell, said that he expects the increase to the small business loan program to be approved on Thursday.
Treasuries retreated during the first half of the session but narrowed their losses as the day went on. The 10-yr yield ended higher by six basis points at 0.74%.
The U.S. Dollar Index fell 0.8% to 99.88, returning to levels from Thursday.
Reviewing today's economic data:
The NFIB Small Business Optimism Index fell to 96.4 in March from 104.5 in February
Job openings decreased to 6.882 mln in February from a revised 7.012 mln (from 6.963 mln) in January
Consumer credit expanded by $22.30 bln in February (Briefing.com consensus $14.00 bln) after increasing by a revised $12.10 bln (from $12.00 bln) in January.
Tomorrow's data will be limited to the 7:00 ET release of the weekly MBA Mortgage Index (prior 15.3%).
Nasdaq Composite -12.1% YTD
S&P 500 -17.7% YTD
Dow Jones Industrial Average -20.6% YTD
Russell 2000 -31.7% YTD
Market Snapshot
Dow 22653.86 -26.13 (-0.12%)
Nasdaq 7887.26 -25.98 (-0.33%)
SP 500 2659.41 -4.27 (-0.16%)
10-yr Note -15/32 0.736
NYSE Adv 2090 Dec 813 Vol 1.47 bln
Nasdaq Adv 1815 Dec 1410 Vol 4.03 bln
Industry Watch
Strong: Energy, Financials, Real Estate, Materials, Industrials
Weak: Consumer Staples, Health Care
Stock market climbs 7% on encouraging COVID-19 signs
06-Apr-20 16:20 ET
Dow +1627.46 at 22679.99, Nasdaq +540.15 at 7913.23, S&P +175.03 at 2663.68
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market rallied more than 7% to start the shortened trading week, as sentiment was buoyed by encouraging signs that the COVID-19 outbreak may be improving. The Dow Jones Industrial Average (+7.7%) and Russell 2000 (+8.2%) set the pace, followed by the Nasdaq Composite (+7.3%) and S&P 500 (+7.0%).
The positive bias was formed overnight in the futures trade when data out of Europe showed countries reporting fewer coronavirus-related deaths, offering hope that the U.S. could follow a similar path. As the death toll in the U.S. approaches 10,000, New York Governor Cuomo said he's seeing signs that possible flattening of New York's caseload curve is starting to emerge.
Social distancing efforts have also provided an improved statistical outlook regarding total U.S. deaths, although the trajectory of the coronavirus is subject to change. Nevertheless, these encouraging signs provided the market some relief that contributed to a broad-based, and steady, advance.
The market closed at session highs with the 11 S&P 500 sectors advancing between 3.9% (consumer staples) and 8.8% (information technology).
The gains don't necessarily suggest the market is in the clear, though. New coronavirus data could upend today's positive sentiment, a fourth phase stimulus bill could run into some hurdles, and investors don't know what news will come out of the oil industry this week.
OPEC+ postponed its production-cut meeting to later this week, which contributed to WTI crude pulling back 7.5%, or $2.13, to $26.21/bbl today. A decision might wait until Friday after a G-20 emergency energy meeting, according The Wall Street Journal.
In other news, the Fed announced the establishment of a facility that will purchase small business loans that are guaranteed by the White House's Payroll Protection Program (PPP). Delta Air Lines (DAL 22.32, -0.16, -0.7%) said it expects Q2 revenue to be down 90%.
U.S. Treasuries started the week on a lower note amid the risk-on mindset displayed in the stock market. The 2-yr yield increased eight basis points to 0.27%, and the 10-yr yield increased nine basis points to 0.68%. The U.S. Dollar Index increased 0.2% to 100.73.
Investors did not receive any notable economic data on Monday. Looking ahead, investors will receive the JOLTS - Job Openings report for February and the Consumer Credit report for February on Tuesday.
Nasdaq Composite -11.8% YTD
S&P 500 -17.6% YTD
Dow Jones Industrial Average -20.5% YTD
Russell 2000 -31.8% YTD
Market Snapshot
Dow 22679.99 +1627.46 (7.73%)
Nasdaq 7913.23 +540.15 (7.33%)
SP 500 2663.68 +175.03 (7.03%)
10-yr Note -29/32 0.667
NYSE Adv 2625 Dec 270 Vol 1.4 bln
Nasdaq Adv 2730 Dec 542 Vol 3.8 bln
Industry Watch
Strong: Information Technology, Financials, Consumer Discretionary
Weak: Consumer Staples
Moving the Market
-- Stock market rallies more than 7% amid signs that the coronavirus situation is improving, caseload curve could soon flatten
-- Broad-based relief rally
-- Crude prices fall after OPEC+ postpones emergency meeting
WTI crude pulls back 7%
06-Apr-20 15:30 ET
Dow +1288.15 at 22340.68, Nasdaq +441.37 at 7814.45, S&P +145.70 at 2634.35
[BRIEFING.COM] The S&P 500 currently trades higher by 5.9%, and the Russell 2000 trades higher by 6.9%.
One last look at the S&P 500 sectors shows consumer discretionary (+6.8%), materials (+6.9%), financials (+6.3%), industrials (+6.2%) with gains more than 6%, while the consumer staples sector (+2.9%) is the lone sector up less than 3%.
WTI crude settled down $2.13 (-7.5%) to $26.21/bbl after OPEC and its allies postponed their production meeting to later this week.
Stocks Pressured After Another Reminder of Labor Market Disaster
03-Apr-20 16:25 ET
Dow -360.91 at 21052.53, Nasdaq -114.23 at 7373.08, S&P -38.25 at 2488.65
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market ended a down week on a lower note, though the S&P 500 (-1.5%) was able to remain above its low from Wednesday. The benchmark index surrendered 2.1% for the week. Small caps had a more difficult go, as the Russell 2000 (-3.1%) lost 7.1% for the week, stopping a bit above its March low.
Today's main storyline was the release of the Employment Situation report for March, which was expected to be very weak. The report showed that nonfarm payrolls decreased by 701,000 and that reading is likely to be revised lower next month, since the report was compiled in the first half of March before layoffs accelerated.
Stocks tried to make the best of a bad situation, pushing higher during the first few minutes of action, but selling pressure intensified shortly after the S&P 500 climbed above its high from yesterday. The market remained under pressure into the early afternoon with the S&P 500 settling near yesterday's afternoon low.
Ten out of eleven sectors ended in the red with six sectors logging wider losses than the broader market. Utilities (-3.6%), materials (-2.3%), and financials (-2.2%) were at the forefront of the selling while real estate (-0.8%) and consumer staples (+0.5%) outperformed.
Today's biggest laggard— the utilities sector—surrendered 7.1% for the week, finishing behind the remaining ten sectors.
The consumer discretionary sector (-1.5%) finished in-line with the broader market as gains in battered names like L Brands (LB 11.34, +1.19, +11.7%), Macy's (M 4.81, +0.36, +8.1%), Carnival (CCL 8.49, +0.52, +6.5%), and Under Armour (UAA 8.22, +0.43, +5.5%) masked sharp losses in shares of casino operators like MGM Resorts (MGM 10.58, -0.93, -8.1%) and Wynn Resorts (WYNN 48.50, -4.17, -7.9%).
Crude oil was able to build on yesterday's advance, climbing $3.16, or 12.6%, to $28.34/bbl. The energy component gained $6.69 or 30.9% for the week while the energy sector (-1.3%) climbed 5.4% since last Friday.
Longer-dated Treasuries finished near their best levels of the day, sending the 10-yr yield lower by four basis points to 0.59%.
The U.S. Dollar Index climbed 0.4% to 100.61, gaining 2.2% for the week.
Today's economic data included the Employment Situation report and ISM Non-Manufacturing Index for March:
March nonfarm payrolls declined by 701,000 (Briefing.com consensus -150,000) while February nonfarm payrolls were revised to 275,000 from 273,000. March private sector payrolls declined by 713,000 (Briefing.com consensus -250,000) while February private sector payrolls were revised to 242,000 from 228,000.
March unemployment rate was 4.4% (Briefing.com consensus 4.0%), versus 3.5% in February. Persons unemployed for 27 weeks or more accounted for 15.9% of the unemployed versus 19.2% in February. The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 8.7%, versus 7.0% in February.
March average hourly earnings were up 0.4% (Briefing.com consensus +0.2%) after increasing 0.3% in February while average workweek decreased to 34.2 hours (Briefing.com consensus 34.0) from 34.4 hours in February.
The key takeaway from the report is that it still isn't adequately capturing the full extent of the weakness in the labor market. Things are even worse than the headlines here suggest, as yesterday's initial claims report made abundantly clear. Those filings are not embedded in today's report, which was formulated mostly on the basis of an employment survey conducted the week of March 12. In actuality, the unemployment rate is likely closer to 10.0% at this juncture
The ISM Non-Manufacturing Index for March checked in at 52.5% (Briefing.com consensus 43.0%) versus 57.3% in February. The dividing line between expansion and contraction is 50.0%.
The key takeaway from the report is that it's not as encouraging as it appears to be, having been bolstered by a nice pickup in the Supplier Deliveries Index (to 62.1% from 52.4%), which reflects slower deliveries due to the COVID-19 impact; moreover, it is understood that the services sector has been the hardest hit in the sudden economic stop and that this measure does not adequately capture the real-time change in business conditions.
Market participants will not receive any data on Monday.
Nasdaq Composite -17.8% YTD
S&P 500 -23.0% YTD
Dow Jones Industrial Average -26.2% YTD
Russell 2000 -37.0% YTD
Market Snapshot
Dow 21052.53 -360.91 (-1.69%)
Nasdaq 7373.08 -114.23 (-1.53%)
SP 500 2488.65 -38.25 (-1.51%)
10-yr Note +3/32 0.587
NYSE Adv 622 Dec 2289 Vol 1.43 bln
Nasdaq Adv 939 Dec 2306 Vol 3.26 bln
Industry Watch
Strong: Consumer Staples, Materials, Health Care
Weak: Financials, Consumer Discretionary, Energy, Utilities, Communication Services
Moving the Market
-- Stocks under pressure after finding resistance near yesterday's highs
-- U.S. loses 701,000 jobs in March, according to Employment Situation Report
-- Oil prices rise amid production-cut hopes
Stocks gain and oil prices spike; jobless claims cross six million
02-Apr-20 16:15 ET
Dow +469.93 at 21413.50, Nasdaq +126.73 at 7486.66, S&P +56.40 at 2526.90
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market ended a two-day skid on Thursday, and oil prices spiked 24% on hopes for a truce to the global price war. Stocks rose even as weekly initial claims doubled to a record 6.6 million, depicting the dire economic situation caused by the coronavirus.
The S&P 500 (+2.3%) and Dow Jones Industrial Average (+2.2%) set the pace with gains over 2.0%, followed by the Nasdaq Composite (+1.7%) and Russell 2000 (+1.3%).
At one point, WTI crude was up more than 34% after President Trump said Saudi Arabia and Russia could soon cut production by about 10 million barrels per day after speaking with both nations. The president later said production cuts could even be as high as 15 million barrels per day. WTI crude futures settled higher by 23.9%, or $4.86, to $25.18/bbl.
Although more discussions are reportedly needed between Saudi Arabia, Russia, and possibly even the U.S. to reach an agreement, news that Saudi Arabia is asking for an emergency OPEC+ meeting supported the market's price-truce hopes. Conversely, some investors were wary that the lack of oil demand would still weigh on the industry despite attempts to control supply.
Nevertheless, the bounce in oil was a much-needed reprieve for companies within the S&P 500 energy sector (+9.1%), which led all sectors in gains by a wide margin. The utilities sector (+3.2%) was next in line, while the consumer discretionary sector (+0.4%) was today's laggard.
Specifying the jobs data, initial claims spiked by 3.341 million to a seasonally adjusted 6.648 million (Briefing.com consensus 2,800,000) for the week ending March 28. Continuing claims for the week ending March 21 reached 3.029 million, which is the highest level since July 6, 2013. The positive price action in the market suggested that the shocking numbers may already have been priced in.
Separately, shares of Walgreens Boots Alliance (WBA 40.32, -2.71, -6.3%) dropped 6%, as the company's cautious tone regarding its outlook outweighed its better-than-expected quarterly results. Note, the Dow component's fiscal quarter ended on Feb. 29, which was before the economic shutdowns in March.
U.S. Treasuries finished mixed and little changed. The 2-yr yield increased one basis point to 0.23%, while the 10-yr yield declined one basis point to 0.63%. The U.S. Dollar Index increased 0.5% to 100.19.
Reviewing Thursday's economic data:
For the week ending March 28, initial claims spiked by 3,341,000 to a seasonally adjusted 6,648,000 (Briefing.com consensus 2,800,000). Continuing claims for the week ending March 21 spiked by 1,245,000 to 3,029,000, which is the highest level since July 6, 2013.
The key takeaway from the report is that it speaks to how bad things are right now for so many people due to the sudden economic stop, but, unfortunately, the report itself likely still doesn't reflect the full extent of the layoff picture.
The trade deficit narrowed to $45.3 billion (Briefing.com consensus -$46.0 billion) in January from an upwardly revised -$48.6 billion ( from -$48.9 bln) in December.
The key takeaway from the report is that it featured a decline in both exports and imports; however, the understanding that this is a January report (i.e. doesn't capture the brunt of the coronavirus impact) will diminish market interest in it.
Factory orders were unchanged m/m in February (Briefing.com consensus +0.3%) following an unrevised 0.5% decline in January. Shipments were down 0.2% m/m in February after decreasing 0.6% in January.
The key takeaway from the report is that it showed business spending was relatively soft in February, which is expected to give way to an extremely sharp contraction in March.
Looking ahead, investors will receive the Employment Situation Report for March and the ISM Non-Manufacturing Index for March on Friday.
Nasdaq Composite: -16.6%
S&P 500: -21.8%
Dow Jones Industrial Average: -25.0%
Russell 2000: -34.9%
Market Snapshot
Dow 21413.50 +469.93 (2.24%)
Nasdaq 7486.66 +126.73 (1.72%)
SP 500 2526.90 +56.40 (2.28%)
10-yr Note -4/32 0.621
NYSE Adv 1717 Dec 1178 Vol 1.3 bln
Nasdaq Adv 1818 Dec 1413 Vol 3.6 bln
Industry Watch
Strong: Energy, Utilities, Consumer Staples
Weak: Consumer Discretionary
Moving the Market
-- Stocks end two-day skid, close near session highs
-- Oil prices spike 24% after President Trump said he hopes and expects Saudi Arabia and Russia to cut oil production
-- Weekly jobless claims doubled to a record 6.648 million
WTI crude settles up 24% on price truce hopes
02-Apr-20 15:30 ET
Dow +251.46 at 21195.03, Nasdaq +50.18 at 7410.11, S&P +30.81 at 2501.31
[BRIEFING.COM] The S&P 500 is up 1.2%, while the Russell 2000 is down 0.4%.
One last look at the S&P 500 sector shows energy (+6.8%) well in the lead with a 6.8% gain. The utilities sector is the current runner-up with a 1.7% advance. Conversely, the consumer discretionary sector (-0.7%) is down in negative territory.
WTI crude settled up $4.86 (+23.9%) to $25.18/bbl on hopes that the price war between Saudi Arabia and Russia could soon end with production cuts.
Stock market loses 4% to start second quarter
01-Apr-20 16:15 ET
Dow -973.65 at 20943.57, Nasdaq -339.52 at 7359.93, S&P -114.09 at 2470.50
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market retreated more than 4% to start the second quarter on Wednesday, as President Trump warned that the next two weeks will be "very painful" in terms of coronavirus fatalities. The S&P 500 (-4.4%), Dow Jones Industrial Average (-4.4%), and Nasdaq Composite (-4.4%) each fell 4.4%. The Russell 2000 underperformed with a 7.1% decline.
The coronavirus task force on Tuesday estimated that deaths attributed to COVID-19 could total 100,000-240,000 in the U.S. with daily deaths projected to peak in two weeks. To help contain the outbreak, and hopefully bring these figures down, Florida, Nevada, and Pennsylvania joined the growing list of states to issue 'stay at home' orders for 30 days.
Original assumptions made by the medical community were based on the data coming out of China, which the U.S. intelligence community said underrepresented the real number of cases and deaths in the country, according to Bloomberg. The White House's projections, based on new data being released every day, had the market worried about the social and psychological effects on the economy.
In turn, no S&P 500 sector was spared in today's sell-off with ten sectors losing at least 3.0%, including 6.1% declines in the real estate and utilities sectors. The consumer staples sector performed relatively better with a 1.8% decline.
Economic data for March showed the manufacturing sector contract and private-sector hiring decline, as expected, due to the coronavirus. Many market participants, however, expect the data to worsen with Boston Fed President Rosengren expecting unemployment to increase "dramatically."
In the oil market, The Wall Street Journal reported that President Trump will meet with the CEOs of some of the largest U.S. oil companies on Friday to discuss how the government can help the industry. WTI crude spiked on the news before settling down 1.0%, or $0.20, to $20.32/bbl.
Separately, tucked behind the macro headlines was Xerox (XRX 17.60, -1.34, -7.1%) withdrawing its offer to acquire HP Inc (HPQ 14.84, -2.52, -14.5%), Marriott (MAR 69.15, -5.66, -7.6%) disclosing a data breach that affected 5.2 million customers, and Macy's (M 4.43, -0.48, -9.8%) being removed from the S&P 500.
U.S. Treasuries finished mixed with longer-dated Treasuries advancing in a safe-haven bid. The 2-yr yield increased two basis points to 0.22%, while the 10-yr yield declined six basis points to 0.64%. The U.S. Dollar Index rose 0.5% to 99.50.
Reviewing Wednesday's economic data:
The ISM Manufacturing Index for March registered a reading of 49.1% (Briefing.com consensus 43.3%), down from 50.1% in February. The dividing line between expansion and contraction is 50.0%.
The key takeaway for some will be that the number wasn't as bad as feared, but lost in that takeaway is the fact that the overall index was supported by a sizable uptick in the supplier deliveries index (to 65.0% from 57.3%), which reflects slower delivery times that are a byproduct of the COVID-19 response that has disrupted supply networks. Translation: the March number is not as encouraging as it seems at first blush.
Total construction spending declined 1.3% m/m in February (Briefing.com consensus +0.5%) on the heels of an upwardly revised 2.8% increase (from +1.8%) in January. Residential spending was down 0.6% m/m while nonresidential spending declined 1.6% m/m.
The key takeaway from the report is that it is relatively meaningless for a market that is pre-occupied with the economic view ahead due to the shutdown measures that started to hit home in March to deal with containing the spread of COVID-19.
The ADP Employment Change report pointed to a net loss of 27,000 nonfarm payrolls in March (Briefing.com consensus -175,000) while the February reading was revised down to 179,000 from 183,000.
The weekly MBA Mortgage Applications Index increased 15.3% following a 29.4% drop in the prior week.
Looking ahead, investors will receive the weekly Initial Claims and Continuing Claims report, the Trade Balance report for February, and the Factory Orders report for February on Thursday.
Nasdaq Composite: -18.0%
S&P 500: -23.5%
Dow Jones Industrial Average: -26.6%
Russell 2000: -35.8%
Market Snapshot
Dow 20943.57 -973.65 (-4.44%)
Nasdaq 7359.93 -339.52 (-4.41%)
SP 500 2470.50 -114.09 (-4.41%)
10-yr Note +26/32 0.631
NYSE Adv 214 Dec 2728 Vol 1.3 bln
Nasdaq Adv 468 Dec 2826 Vol 3.6 bln
Industry Watch
Strong: Consumer Staples
Weak: Financials, Real Estate, Utilities
Moving the Market
-- Stock market loses more than 4% to start the second quarter
-- White House estimates 100,000-240,000 deaths in U.S. due to the coronavirus; projects daily deaths to peak in two weeks
-- President Trump warns of "very painful two weeks"
-- Manufacturing sector contracts, private-sector hiring declines in March
WTI crude settles down 1%
01-Apr-20 15:25 ET
Dow -964.21 at 20953.01, Nasdaq -351.43 at 7348.02, S&P -120.34 at 2464.25
[BRIEFING.COM] The S&P 500 remains near session lows with a 4.6% decline. The Russell 2000 is down 6.8%.
One last look at the S&P 500 sector standings shows utilities (-7.7%), real estate (-7.4%), and financials (-6.1%) leading the retreat, while the consumer staples sector (-1.9%) is the lone sector down less than 3%.
WTI crude settled the session down $0.20 (-1.0%) to $20.32/bbl. It's a volatile market, though, with futures currently up 1.5% to $20.78/bbl.
Oil prices briefly spike on news President Trump will meet with oil execs
Stock market closes quarter on lower note
31-Mar-20 16:15 ET
Dow -410.32 at 21917.22, Nasdaq -74.05 at 7699.45, S&P -42.06 at 2584.59
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market ended the tumultuous first quarter in negative territory on Tuesday, while investors continued to assess the latest news on the coronavirus and the policies proposed to address its impact. The S&P 500 closed near session lows with a 1.6% decline after a brief stay in positive territory early in the session.
The Dow Jones Industrial Average lost 1.8%, the Nasdaq Composite lost 1.0%, and the Russell 2000 lost 0.5%.
Notably, President Trump said a $2 trillion infrastructure bill should be included in the fourth part of a stimulus bill with U.S. interest rates near zero. Prior to the statement, Bloomberg reported that White House officials were looking into a $600 billion relief bill for mortgage markets, the travel industry, and state governments.
There was another story from a Bloomberg reporter that President Trump approved a proposal pushed for by some businesses to delay payment of certain tariffs by 90 days. An announcement could come as soon as this week. Market reaction was muted, although shares of Caterpillar (CAT 116.04, +4.33, +3.9%) likely benefited from the president's infrastructure proposal.
Instead, quarter-end rebalancing contributed to the outperformance of the distressed energy sector (+1.6%) and, conversely, the sharp declines in the defensive-oriented utilities (-4.0%) and real estate (-3.3%) sectors.
On the coronavirus front, NIAID Director Dr. Fauci said there have been "glimmers of hope" that social distancing is helping to curtail the spread of COVID-19, but the situation remained dire with the number of infections continuing to rise in the U.S. On a related note, Texas Governor Abbott issued a "stay at home" order until May 4.
Separately, the Fed established a repurchase agreement facility as an alternative source for foreign central banks to temporarily exchange their U.S. Treasury securities for U.S. dollars. This was simply the latest "whatever it takes" action by the Fed to support financial markets.
U.S. Treasuries had a relatively quiet day, ultimately closing mixed and little changed. The 2-yr yield declined one basis point to 0.20%, while the 10-yr yield increased three basis points to 0.70%. The U.S. Dollar Index declined 0.2% to 98.99. WTI crude increased 1.5% to $20.52/bbl, although it was up more than 8% in the session.
Reviewing Tuesday's economic data:
The Conference Board's Consumer Confidence Index for March dropped to 120.0 (Briefing.com consensus 110.0) from an upwardly revised 132.6 (from 130.7) for February. The March reading is the lowest since July 2017.
The key takeaway from the report is that the downturn was not as bad as feared; however, the prevailing expectation is that consumer confidence will get much worse due to the impact of the coronavirus and its effect on consumer attitudes about job security and income growth prospects.
The Chicago PMI decreased to 47.8 in March (Briefing.com consensus 40.0) from 49.0 in February.
The S&P Case-Shiller Home Price Index for January increased 3.1% following an upwardly revised 2.8% increase in December (from +2.9%).
Looking ahead, investors will receive the ISM Manufacturing Index for March, the ADP Employment Change Report for March, Construction Spending for February, the weekly MBA Mortgage Applications Index, and auto and truck sales for March on Wednesday.
Nasdaq Composite: -14.2%
S&P 500: -20.0%
Dow Jones Industrial Average: -23.2%
Russell 2000: -30.9%
Market Snapshot
Dow 21917.22 -410.32 (-1.84%)
Nasdaq 7699.45 -74.05 (-0.95%)
SP 500 2584.59 -42.06 (-1.60%)
10-yr Note +4/32 0.686
NYSE Adv 1293 Dec 1598 Vol 1.7 bln
Nasdaq Adv 1630 Dec 1642 Vol 4.0 bln
Industry Watch
Strong: Energy
Weak: Real Estate, Utilities
Moving the Market
-- Stocks falter on final day of quarter
-- White House reportedly discussing plans for "phase four" relief bill; President Trump proposes $2 trillion infrastructure bill
-- Fed creates temporary repurchase facility for foreign central banks
WTI crude posts modest gain as stocks fall to session lows
31-Mar-20 15:25 ET
Dow -413.14 at 21914.40, Nasdaq -117.06 at 7656.44, S&P -49.88 at 2576.77
[BRIEFING.COM] The S&P 500 is trading at session lows with a 2.0% decline.
One last look at the S&P 500 sectors shows all trading in the red, led lower by real estate (-4.8%), utilities (-3.6%), and financials (-3.5%). The energy sector is down just 0.4%.
WTI crude settled today's session up $0.30 (+1.5%) to $20.52/bbl, although it was up by more than 8% earlier in the session.
Stock market gains more than 3% to start the week
30-Mar-20 16:15 ET
Dow +690.70 at 22327.54, Nasdaq +271.77 at 7773.50, S&P +85.18 at 2626.65
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 climbed 3.4% on Monday, led higher by shares of health care and technology companies, even as the White House extended its social distancing guideline through the end of April. The Dow Jones Industrial Average (+3.2%) and Nasdaq Composite (+3.6%) also rose more than 3.0%, while the Russell 2000 increased 2.3%.
President Trump's original goal to reopen the economy was April 12, but the forward-looking market wasn't bothered by the slight extension amid hope that these measures will further contain the virus, so economic restrictions can later be loosened.
In addition, quarter-end rebalancing continued to play a factor in trading, while medical breakthroughs from Abbott Labs (ABT 79.34, +4.78, +6.4%) and Johnson & Johnson (JNJ 133.01, +9.85, +8.0%) helped sentiment. Specifically, Abbott Labs is launching a point-of-care test to detect COVID-19 in as little as five minutes, while JNJ said it selected a lead vaccine candidate that it plans to test in clinical trials by September.
Fittingly, the health care sector (+4.7%) was today's leader, followed by the information technology sector (+4.2%) amid strength in Microsoft (MSFT 160.23, +10.53, +7.0%) and the semiconductor stocks. The Philadelphia Semiconductor Index rose 3.8%. The energy sector lagged with a 1.5% gain.
On the downside, shares of Boeing (BA 152.28, -9.72, -6.0%) eased back from last week's 70% surge, while airline stocks like American Airlines (AAL 12.25, -1.79, -12.8%) did get hit by the social distancing guideline extension.
Separately, oil prices continued to falter with WTI crude settling down 6.6%, or $1.43, to $20.22/bbl, as the market remained plagued by excess supply and crippling demand. On a related note, President Trump said he would call Russian President Putin to discuss the price dispute with Saudi Arabia.
U.S. Treasuries, particularly longer-dated tenors, rose alongside equities to start the week. The 2-yr yield declined two basis points to 0.21%, and the 10-yr yield declined eight basis points to 0.67%. The U.S. Dollar Index rose 0.7% to 99.01.
Monday's lone economic report was Pending Home Sales, which increased 2.4% in February following an upwardly revised 5.3% in January (from 5.2%).
Looking ahead, investors will receive the Conference Board's Consumer Confidence Index for March and the S&P Case-Shiller Home Price Index for January on Tuesday.
Nasdaq Composite: -13.4%
S&P 500: -18.7%
Dow Jones Industrial Average: -21.8%
Russell 2000: -30.6%
Market Snapshot
Dow 22327.54 +690.70 (3.19%)
Nasdaq 7773.50 +271.77 (3.62%)
SP 500 2626.65 +85.18 (3.35%)
10-yr Note -2/32 0.708
NYSE Adv 1775 Dec 1174 Vol 1.2 bln
Nasdaq Adv 2043 Dec 1220 Vol 3.8 bln
Industry Watch
Strong: Health Care, Consumer Staples
Weak: Energy, Real Estate
Moving the Market
-- Stock market starts week on higher note
-- Abbott Labs (ABT) and Johnson & Johnson (JNJ) prop up health care sector amid coronavirus developments
-- White House extends social distancing guidelines through April 30
-- Quarter-end rebalancing
-- Oil prices extend losses
WTI crude settles near $20 per barrel
30-Mar-20 15:25 ET
Dow +621.35 at 22258.19, Nasdaq +251.23 at 7752.96, S&P +79.12 at 2620.59
[BRIEFING.COM] The S&P 500 is now up 3.2%, which brings the benchmark index back to its highs from last Thursday.
One last look at the S&P 500 sectors shows all sectors trading in positive territory, led higher by the health care (+4.6%) and information technology (+x%) sectors. The energy sector is today's laggard with a 1.0% gain.
WTI crude settled today's session down $1.43 (-6.6%) to $20.22/bbl. On a related note, President Trump said he would call Russian President Putin to discuss the price dispute with Saudi Arabia today.
Stocks end strong week on lower note amid profit taking
27-Mar-20 16:20 ET
Dow -915.39 at 21636.84, Nasdaq -295.16 at 7501.73, S&P -88.60 at 2541.47
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 3.4% on Friday after a rebound effort faded into the close, as investors took weekly profits. The benchmark index had started the session down 4.2%, then cut its losses to just 0.5% after the House passed the $2 trillion stimulus bill in the afternoon.
The Dow Jones Industrial Average lost 4.1%, the Nasdaq Composite lost 3.8%, and the Russell 2000 lost 4.1%.
The stimulus bill will provide relief for U.S. households and businesses, as the rising number of coronavirus infections continues to keep much of America in shutdown mode. On a related note, the U.S. surpassed China and Italy for the most confirmed cases of COVID-19.
Before the close, United Airlines (UAL 32.84, -2.71, -7.6%) said it isn't going to conduct involuntary furloughs or pay cuts in the U.S. before September 30; however, it cautioned that air travel demand could remain suppressed possibly into next year.
In other words, it may have dampened hope for V-shape economic recovery. The market, meanwhile, had already been losing steam from its rebound effort prior to the memo. At session's end, the S&P 500 energy (-6.9%) and information technology (-4.6%) sectors led today's decline, while the utilities sector (+0.5%) closed higher.
Within the Dow, shares of Boeing (BA 162.00, -18.55, -10.3%) fell 10% after Treasury Secretary Mnuchin said the company has no plans of using government aid at this time. Procter & Gamble (PG 110.17, +2.79, +2.6%) bucked the broader trend after the stock was upgraded to Buy from Hold at Stifel.
In earnings news, lululemon athletica (LULU 32.84, -2.71, -7.6%) reported better-than-expected quarterly results, but shares fell alongside the broader market after a strong week.
U.S. Treasuries ended the week on a higher note, driving yields lower across the curve. The 2-yr yield declined three basis points to 0.23%, and the 10-yr yield declined six basis points to 0.75%. The U.S. Dollar Index declined 1.0% to 98.36. WTI crude lost another 4.2%, or $0.95, settling lower at $21.65/bbl.
Reviewing Friday's economic data:
Personal income increased 0.6% m/m in February (Briefing.com consensus +0.4%) while personal spending rose 0.2%, as expected. The PCE Price Index increased 0.1% while the core PCE Price Index, which excludes food and energy, rose 0.2%, both as expected.
The key takeaway from the report would have been that inflation remains subdued and that the income growth is a plus for consumer spending, but with the subsequent shutdown due to the coronavirus, the key takeaway now is that this February report is cold comfort in a world far different than the one that existed in February.
The final reading for the University of Michigan Index of Consumer Sentiment for March was revised down to 89.1 (Briefing.com consensus 95.7) from the preliminary reading of 95.9. The final reading for February was 101.0.
The key takeaway from the report is that it captures the leading wave of the change in consumer sentiment, which is deteriorating rapidly in the face of the coronavirus impact on the U.S. economy. According to the report, the 11.9-point drop from February is the fourth largest one-month decline in nearly a half century.
Looking ahead, Pending Home Sales for February on Monday.
Nasdaq Composite: -16.4%
S&P 500: -21.3%
Dow Jones Industrial Average: -24.2%
Russell 2000: -32.2%
Market Snapshot
Dow 21636.84 -915.39 (-4.06%)
Nasdaq 7501.73 -295.16 (-3.79%)
SP 500 2541.47 -88.60 (-3.37%)
10-yr Note +17/32 0.679
NYSE Adv 651 Dec 2302 Vol 1.4 bln
Nasdaq Adv 844 Dec 2500 Vol 3.9 bln
Industry Watch
Strong: Utilities, Real Estate
Weak: Energy, Information Technology
Moving the Market
-- Stocks close lower in profit-taking trade
-- House passes $2 trillion stimulus bill
-- Relative weakness in energy stocks, oil prices
Carnival in talks to raise $7 billion in new debt
27-Mar-20 15:25 ET
Dow -324.83 at 22227.40, Nasdaq -108.84 at 7688.05, S&P -24.69 at 2605.38
[BRIEFING.COM] The S&P 500 currently trades at session highs with a 1.0% decline.
Bloomberg reported earlier that Carnival (CCL 14.60, -3.23, -18.0%) is in discussions to raise $7 billion in new debt. Shares have barely reacted to the report, as the stock is already taking it on the chin with an 18% decline.
WTI crude settled today's session down $0.95 (-4.2%) to $21.65/bbl, extending its weekly decline to 8.8%, as little was done to help the struggling oil industry this week.
Stocks extend rally after Senate approves stimulus bill, jobless claims surge
26-Mar-20 16:15 ET
Dow +1351.62 at 22552.23, Nasdaq +413.24 at 7796.89, S&P +154.51 at 2630.07
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 extended its weekly rally by 6.2% on Thursday after the Senate approved the $2 trillion fiscal stimulus package for the economy, which saw a record surge in weekly jobless claims. The Dow Jones Industrial Average rose 6.4%, the Nasdaq Composite rose 5.6%, and the Russell 2000 rose 6.3%.
Initial claims for the week ending March 21 increased by 3.001 million to 3.283 million (Briefing.com consensus 525,000), which was above most expectations but also unsurprising given the slew of economic shutdowns aimed at slowing the rate of coronavirus infections. For the market, and Congress, it quantified how bad the situation has been for American workers.
House Speaker Pelosi (D-CA) said the stimulus bill will be passed tomorrow by voice vote with "strong bipartisan support" despite some speculation that objecting members would request a roll call vote, which would further delay its passage. The impending fiscal relief, then, provided investors some reassurance while doing some quarter-end rebalancing.
The S&P 500 closed at session highs and up 20.0% from its Monday intraday low. All 11 S&P 500 sectors posted strong gains today between 4.3% (consumer discretionary) and 8.4% (utilities). Oil prices ($22.60, -1.93, -7.9%) were unable to catch a bid, though, partly due the oil industry not being included in this stimulus bill.
Prior to the open, Fed Chair Powell reiterated in an NBC "Today Show" interview that the Fed isn't going to run out of ammunition and will continue to provide credit to places that need it. The reminder that the Fed will be on the market's side in the foreseeable future was another positive consideration for the market.
In corporate news, semiconductor stocks drew support from Micron's (MU 44.79, +2.29, +5.4%) encouraging quarterly results and guidance. Henry Schein (HSIC 53.56, +3.53, +7.1%) was among the latest companies contributing to the fight against COVID-19 with an antibody rapid blood test for health care professionals.
U.S. Treasuries finished the session on a higher note, as the record number of unemployment claims reminded bond investors of the negative macro environment. The 2-yr yield declined four basis points to 0.26%, and the 10-yr yield declined five basis points to 0.81%. The U.S. Dollar Index fell back below 100.00, finishing 1.6% lower at 99.43.
Reviewing Thursday's economic data:
Initial claims for the week ending March 21 increased by 3,001,000 to 3,283,000. That is the highest seasonally adjusted number for initial claims by many miles. The prior record was 695,000 in October 1982. Continuing claims for the week ending March 14 increased by 101,000 to 1,803,000, but that number will skyrocket next week as well.
The key takeaway from the report is that it underscores for everyone how much worse the current economic situation is than anything else experienced in this modern age. It is a stark reflection that this time is different.
The third estimate for Q4 GDP showed a 2.1% annualized rate of growth that was in-line with the second estimate and the Briefing.com consensus estimate. Similarly, the GDP Price Deflator was left unchanged at 1.3%, as expected.
The key takeaway from the report is that it is inconsequential at this juncture. That would be the effective takeaway in normal times (we're less than a week away from the end of Q1), but things are no longer normal as the first quarter is ending with the U.S. economy in shutdown mode to help stop the spread of COVID-19.
The advance goods trade deficit totaled $59.89 bln in February after a $65.9 bln deficit in January. Advance retail inventories decreased 0.3% in February after decreasing 0.1% in January. Advance wholesale inventories decreased 0.5% in February after decreasing 0.5% in January.
Looking ahead, investors will receive Personal Income and Spending for February, PCE Prices for February, and the final University of Michigan Index of Consumer Sentiment for March on Friday.
Nasdaq Composite: -13.1%
S&P 500: -18.6%
Dow Jones Industrial Average: -21.0%
Russell 2000: -29.3%
Market Snapshot
Dow 22552.23 +1351.62 (6.38%)
Nasdaq 7796.89 +413.24 (5.60%)
SP 500 2630.07 +154.51 (6.24%)
10-yr Note +3/32 0.833
NYSE Adv 2578 Dec 382 Vol 1.6 bln
Nasdaq Adv 2715 Dec 561 Vol 3.9 bln
Industry Watch
Strong: Utilities, Real Estate, Health Care
Weak: Consumer Discretionary
Moving the Market
-- S&P 500 climbs more than 6%, extending its rally to 20% from its recent low
-- Weekly jobless claims surged to a record 3.283 million
-- Senate approved $2 trillion stimulus bill, as expected; House will vote on bill tomorrow
WTI crude loses nearly 8% despite equity rally
26-Mar-20 15:25 ET
Dow +934.30 at 22134.91, Nasdaq +296.37 at 7680.02, S&P +115.67 at 2591.23
[BRIEFING.COM] Little has changed in the market with the S&P 500 continuing to trade higher by 4.5%. The small-cap Russell 2000 is up 4.8%.
One last look at the S&P 500 sectors shows the utilities sector (+7.2%) still leading the advance, followed by the real estate sector (+5.9%). The consumer discretionary sector (+2.7%) is up the least, falling behind the materials sector (+3.3%).
WTI crude futures settled down $1.93 (-7.9%) to $22.60/bbl, as investors remained bearish due to the well-documented struggles with the market. The fact that the oil industry wasn't included in the stimulus bill may have added to the poor sentiment.
S&P 500 closes higher but loses steam into the close
25-Mar-20 16:25 ET
Dow +495.64 at 21200.61, Nasdaq -33.56 at 7383.65, S&P +28.23 at 2475.56
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 advanced as much as 5.1% on Wednesday, as investors continued to buy beaten-up shares of companies after the Senate agreed to a revised stimulus plan, but the market faltered into the close amid some political drama and profit taking. The benchmark index finished up 1.2% for the session.
The Dow Jones Industrial Average (+2.4%) outperformed on the back of Boeing (BA 158.73, +31.05, +24.3%). The Russell 2000 increased 1.3%, while Nasdaq Composite declined 0.5%.
An agreement was reached in the early hours of the morning, but a vote in the Senate was delayed today due to a minor drafting error in the bill. There was some hope that the House would then approve the bill with a unanimous consent resolution despite lingering complaints in order to provide financial relief for Americans and businesses as soon as possible.
All S&P 500 sectors were on pace to close in positive territory, but sentiment soured after Senator Sanders threatened to hold up the coronavirus bill and demand new restrictions on the $500 billion fund for corporations. Rep. Alexandria Ocasio-Cortez also warned she may oppose the unanimous consent resolution, which could further delay financial relief.
The stimulus isn't going to help slow down the rate of coronavirus infections, but it may speed an economic recovery if the nationwide efforts to curb the virus prove successful. Granted, there's still uncertainty about that outlook, but the market has gotten anxious about getting funding to the businesses and workers who need it most right now.
By session's end, eight of the 11 S&P 500 sectors still closed higher, led by the industrials (+5.3%), energy (+4.5%), and real estate (+4.5%) sectors. The communication services sector (-1.6%) was dragged lower by an acknowledgement from Facebook (FB 156.21, -4.77, -3.0%) that it has seen a weakening in its ads business.
Boeing shares surged 24%, as the company stands to benefit from the stimulus bill that will rescue the airline industry. Reports indicated the company could also receive direct aid from Washington and that the company aims to restart production of the 737 MAX by May.
Nike (NKE 79.01, +6.68, +9.2%) shares rose 9% after the company beat revenue estimates and said it's seeing improving market conditions in China, Japan, and Korea. Apple (AAPL 245.52, -1.36, -0.6%) slipped with the broader market and amid a Nikkei Asian Review report suggesting it might consider delaying the launch of the 5G iPhone by months.
U.S. Treasuries finished mixed with shorter-dated maturities posting gains that drove yields on the four-week bill (-6 bps to -0.05%) and three-month bill (-4 bps to -0.03%) negative. The 2-yr yield declined seven basis points to 0.30%, while the 10-yr yield increased four basis points to 0.86%. The U.S. Dollar Index declined 1.2% to 100.86. WTI crude rose 2.5%, or $0.60, to $24.53/bbl.
Reviewing Wednesday's economic data:
February durable goods orders increased 1.2% (Briefing.com consensus -1.4%). Excluding transportation, durable goods orders declined 0.6% (Briefing.com consensus -0.2%).
The key takeaway from the report is that business spending was soft in February, which is disappointing in and of itself, but all the more disappointing knowing that it is going to collapse now in the face of the shutdown measures adopted to stop the spread of the coronavirus.
The FHFA Housing Price Index increased 0.3% in March after increasing 0.6% in February.
The weekly MBA Mortgage Applications Index dropped 29.4% following an 8.4% decline in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report, the third estimate for Q4 GDP, and the Advance reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories for February on Thursday.
Nasdaq Composite: -17.7%
S&P 500: -23.4%
Dow Jones Industrial Average: -25.7%
Russell 2000: -33.5%
Market Snapshot
Dow 21200.61 +495.64 (2.39%)
Nasdaq 7383.65 -33.56 (-0.45%)
SP 500 2475.56 +28.23 (1.15%)
10-yr Note 0/32 0.845
NYSE Adv 2327 Dec 573 Vol 1.8 bln
Nasdaq Adv 2179 Dec 1222 Vol 4.6 bln
Industry Watch
Strong: Energy, Industrials, Real Estate
Weak: Communication Services, Information Technology, Consumer Staples
Moving the Market
-- Stock market loses steam into the close amid some political drama that could delay the stimulus bill
-- S&P 500 closed higher, while the Nasdaq slipped into the red
-- Boeing (BA) carried the Dow higher
-- Shorter-dated Treasuries posted gains
WTI crude settles 2.5% higher
25-Mar-20 15:25 ET
Dow +1154.01 at 21858.98, Nasdaq +176.97 at 7594.18, S&P +107.65 at 2554.98
[BRIEFING.COM] The S&P 500 currently trades higher by 4.4% around the 2550 level.
One last look at the S&P 500 sectors shows industrials (+8.6%), real estate (+7.4%), and utilities (+6.5%) leading today's advance, while the communication services sector (+1.1%) falls behind.
WTI crude settled higher by $0.60 (+2.5%) to $24.53/bbl. On a related note, weekly crude oil inventories increased by 1.63 mln barrels after increasing by 1.95 mln barrels during the previous week.
S&P 500 rebounds nearly 10% on fiscal stimulus hopes
24-Mar-20 16:15 ET
Dow +2112.98 at 20704.97, Nasdaq +557.18 at 7417.21, S&P +209.93 at 2447.33
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 surged 9.4% on Tuesday, as news that the elusive fiscal stimulus package was close to being agreed to in the Senate spurred a broad-based rebound. The Dow Jones Industrial Average climbed 11.4%, the Nasdaq Composite climbed 8.1%, and the Russell 2000 climbed 9.4%.
All 11 S&P 500 sectors posted strong gains, especially the energy (+16.3%), financials (+12.8%), and industrials (+12.8%) sectors. The consumer staples sector (+4.8%) was the lone sector to advance less than 5.0%.
Lawmakers continued to narrow their differences on the stimulus bill, with Senate Minority Leader Schumer (D-NY) placing negotiations "on the two-yard line" around lunchtime. According to CNBC, the White House is hopeful to have an agreement in principle by "sunset," but noted it was unlikely that an actual Senate vote would take place tonight.
An agreement is needed to restore some confidence for consumers, investors, and businesses during the economic shutdowns across the country. The Fed has already stepped in numerous times to expand credit and liquidity, while President Trump today provided a goal for when he wants the economy to reopen despite the outbreak.
Specifically, President Trump said he would love to have the country open for business by Easter (April 12) but will decide based on expert input from health officials. New York Governor Cuomo, who has been very active in trying to slow the rising rate of infections, empathized with the president but argued that we shouldn't "accelerate the economy at the cost of human life."
Nevertheless, the prospects of fiscal stimulus and possibly having the economy reopen in April, combined with some short-covering activity and a bargain-hunting mindset, helped the market bounce from a deeply oversold condition. Tuesday's huge gains cut the S&P 500's monthly decline to 17.2% and yearly decline to 24.3%.
Chevron (CVX 66.55, +12.33) was among today's largest gainers with shares rising 22.7%, as investors were pleased to hear that the company has no plans to cut its dividend despite the turmoil in the oil market. The company also cut its capital spending plan by $4 billion and suspended its share buyback program. WTI crude rose 1.9%, or $0.44, to $23.93/bbl on Tuesday.
U.S. Treasuries retreated for most of the day but did close off session lows. The 2-yr yield rose eight basis points to 0.37%, and the 10-yr yield rose five basis points to 0.82%. The U.S. Dollar Index declined 0.5% to 101.96. Gold futures rose 6.0% to $1659.80/ozt to extend its weekly advance following some positive-minded commentary out of Goldman Sachs.
Friday's lone economic report was New Home Sales for February, which decreased 4.4% m/m in February to a seasonally adjusted annual rate of 765,000 units (Briefing.com consensus 761,000) from an upwardly revised 800,000 (from 764,000) in January.
The key takeaway from the report is that it shows new home demand was strong in February, but that was before everything changed this month in the U.S. with the coronavirus situation, which is expected to severely weigh on home buying interest in the near term.
Looking ahead, investors will receive Durable Goods Orders for February, the FHFA Housing Price Index for March, and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite: -17.3%
S&P 500: -24.3%
Dow Jones Industrial Average: -27.5%
Russell 2000: -34.3%
Market Snapshot
Dow 20704.97 +2112.98 (11.37%)
Nasdaq 7417.21 +557.18 (8.12%)
SP 500 2447.33 +209.93 (9.38%)
10-yr Note -5/32 0.840
NYSE Adv 2677 Dec 240 Vol 1.7 bln
Nasdaq Adv 2831 Dec 460 Vol 4.3 bln
Industry Watch
Strong: Energy, Financials, Industrials
Weak: Consumer Staples
Moving the Market
-- S&P 500 rebounds nearly 10% on fiscal stimulus hopes
-- Senate could reportedly reach a deal in principle tonight
-- President Trump hopes to reopen the economy by Easter (April 12)
-- Market bounces from a deeply oversold condition
WTI crude settles 2% higher
24-Mar-20 15:30 ET
Dow +1810.58 at 20402.57, Nasdaq +493.60 at 7353.63, S&P +185.59 at 2422.99
[BRIEFING.COM] The S&P 500 continues to trade higher by 8.1%, while the Russell 2000 follows behind with a 7.5% gain.
One last look at the S&P 500 sector standings shows energy (+12.7%), financials (+10.9%), and industrials (+10.7%) up more than 10%, while the consumer staples sector (+4.5%) is the lone sector up less than 5.0%.
WTI crude settled up $0.44 (+1.9%) to $23.93/bbl.
Stock market loses 4% to end ugly week
20-Mar-20 16:15 ET
Dow -913.21 at 19174.04, Nasdaq -271.06 at 6878.87, S&P -104.47 at 2304.92
https://www.briefing.com/stock-market-update
[BRIEFING.COM] An early rebound effort quickly turned into losses on this quadruple-witching expiration Friday, as investors continued to grapple with the persistent shutdown of the economy. The S&P 500 (-4.3%), Dow Jones Industrial Average (-4.6%), and Russell 2000 (-4.2%) declined more than 4.0%, while the Nasdaq Composite declined 3.8%.
California ordered residents to stay at home, except for essential needs, until further notice last night, but stocks started today's session on a higher note amid hopes for a rebound. It wasn't until New York announced similar stay-at-home restrictions that optimism started to unravel, as it contributed to the notion that more states will follow suit to limit the spread of the coronavirus.
Later, London announced the closure of pubs and restaurants, New Jersey ordered non-essential businesses to close, and the Chicago Tribune reported that Illinois will issue its own shelter-in-place order. President Trump also said that the southern border with Mexico will be closed to non-essential travel.
Washington continued to work on a $1 trillion+ stimulus package to soften the economic impact caused by these disruptions, but today's orderly retreat suggested that it might not be enough to meaningfully address the magnitude of these shutdowns. According to Bloomberg, Treasury Secretary Mnuchin believes the stimulus bill is too small.
Losses were widespread, but the energy sector (+1.0%) was able to buck the broader trend, and trim its huge weekly decline, despite an 8% decline in oil prices ($23.73/bbl, -2.17, -8.4%). The utilities (-8.2%) and consumer staples (-6.5%) sectors were today's weakest performers.
The Fed remained active in trying to further support the financial system. On Friday, the Fed expanded its Money Market Mutual Fund Liquidity Facility (MMLF) to accept municipal debt and stepped up its purchases of Treasury and mortgage-backed securities. The New York Fed said it will now conduct two repo operations totaling $1 trillion for the rest of the month.
U.S. Treasuries gained buying interest amid the selling in equities and actions taken by the Fed. The 2-yr yield declined three basis points to 0.37%, and the 10-yr yield declined 18 basis points to 0.94%. The U.S. Dollar Index finished flat at 102.72.
Friday's economic data was limited to Existing Home Sales, which increased 6.5% m/m in February to a seasonally adjusted annual rate of 5.77 million units (Briefing.com consensus 5.50 million). This follows a downwardly revised 5.42 million (from 5.46 million) in January.
The key takeaway from the report is that existing home sales activity was robust in February based on contract signings that happened in December and January. Next month could look reasonably good, too, but the excitement over this report has been tempered by expectations that a meaningful slowdown will soon follow because of the coronavirus impact.
Looking ahead, the NYSE will temporarily shift to fully electronic trading on Monday and investors will not receive any notable economic data.
Nasdaq Composite: -23.3%
S&P 500: -28.7%
Dow Jones Industrial Average: -32.8%
Russell 2000: -39.2%
Market Snapshot
Dow 19174.04 -913.21 (-4.55%)
Nasdaq 6878.87 -271.06 (-3.79%)
SP 500 2304.92 -104.47 (-4.34%)
10-yr Note +27/32 0.881
NYSE Adv 1295 Dec 1617 Vol 2.7 bln
Nasdaq Adv 1303 Dec 1971 Vol 5.2 bln
Industry Watch
Strong: Energy
Weak: Utilities, Consumer Staples
Moving the Market
-- Stock market loses 4% as economies continue to shut down
-- New York and California order stay-at-home restrictions
-- Fed announces it will increase daily repo operations to $1 trillion
-- Heavy volume on this quadruple-witching expiration day
WTI crude falls 8% after yesterday's rebound
20-Mar-20 15:35 ET
Dow -478.19 at 19609.06, Nasdaq -129.72 at 7020.21, S&P -60.52 at 2348.87
[BRIEFING.COM] The S&P 500 is down 2.6% and is on pace to end the week down more than 13%.
One last look at the S&P 500 sectors shows all 11 sectors trading lower, although the energy sector is down just 0.3%. Interestingly, the defensive-oriented utilities (-4.8%) and consumer staples (-4.7%) are among today's weakest performers.
WTI crude settled down $2.17 (-8.4%) to $23.73/bbl following yesterday's 23% rebound.
Stocks close higher in volatile session, oil prices rebound
19-Mar-20 16:20 ET
Dow +188.27 at 20087.25, Nasdaq +160.73 at 7149.93, S&P +11.29 at 2409.39
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 advanced 0.5% on Thursday in a volatile session that saw the benchmark index fall as much as 3.3% in early action and gain as much as 2.9% in the afternoon. The Dow Jones Industrial Average rose 1.0%, while the Nasdaq Composite (+2.3%) and Russell 2000 (+6.8%) were the big movers today amid strong gains in technology and small-cap stocks.
The news cycle wasn't entirely positive with the number of COVID-19 cases continuing to surge globally, leading more companies to withdraw guidance, suspend dividends, and temporarily lay off workers. The latter started to be quantified in the weekly initial claims, which increased by 70,000 to 281,000 (Briefing.com consensus 220,000) for the week ending March 14.
To mitigate the negative impact of the coronavirus, central banks continued to amplify stimulus efforts, Congress continued to deliberate the proposed $1.3 trillion fiscal stimulus package, and clinical trials for new therapies remained in progress, according to President Trump.
The latest central bank moves included the Fed establishing a Money Market Mutual Fund Liquidity Facility (MMLF), the ECB and Bank of Japan announcing emergency bond-buying programs, and the Bank of England issuing a surprise rate cut and raising its daily asset purchases. Although not market-moving, there was an appreciation for the urgency to ease the intense strains on financial markets.
Investors also welcomed the respite from the recent days of heavy selling, but the S&P 500 remained down 11.1% for the week and not all sectors participated in today's advance. The S&P 500 consumer discretionary (+3.4%) and energy (+6.8%) sectors presumably outperformed amid tactical trading opportunities and, specifically for the energy space, the 23% spike in WTI crude ($20.42/bbl, +4.71, +23.1%).
Oil prices were aided by comments from President Trump, who said that he will get involved in the price war between Russia and Saudi Arabia at "the appropriate time." An afternoon report from The Wall Street Journal noted that Texas is considering cutting oil production. Today's move in oil follows a 24% price drop yesterday.
Left out of today's advance were the defensive-oriented S&P 500 utilities (-5.5%), consumer staples (-2.9%), health care (-1.9%), and real estate (-1.4%) sectors.
U.S. Treasuries finished sharply higher after two days of aggressive selling, driving yields lower across the curve. The 2-yr yield declined 14 basis points to 0.38%, and the 10-yr yield declined 15 basis points to 1.12%. The U.S. Dollar Index advanced 1.5% to 102.67, as demand remained strong for the world's reserve currency.
Reviewing Thursday's economic data:
Initial claims for the week ending March 14 increased by 70,000 to 281,000 (Briefing.com consensus 220,000), bolstered by the impact of the coronavirus. The unadjusted number of initial claims increased by 50,517 to 250,892. Continuing claims for the week ending March 7 increased by 2,000 to 1.701 million.
The key takeaway from the report is that it is an early warning sign of much larger claims numbers to come considering the fact that many forced, or voluntary, business closures didn't start to ramp up until the middle of the month with initial expectations that they will be closed at least through the end of March.
The Philadelphia Fed Index for March dropped to -12.7 (Briefing.com consensus 10.0) from the 36.7 reading in February.
The current account deficit for the fourth quarter totaled $109.8 billion. The third quarter deficit was revised to $125.4 billion from $124.1 billion.
Looking ahead, investors will receive Existing Home Sales for February on Friday.
Nasdaq Composite: -20.3%
S&P 500: -25.4%
Dow Jones Industrial Average: -29.6%
Russell 2000: -36.6%
Market Snapshot
Dow 20087.25 +188.27 (0.95%)
Nasdaq 7149.93 +160.73 (2.30%)
SP 500 2409.39 +11.29 (0.47%)
10-yr Note +23/32 1.175
NYSE Adv 2251 Dec 681 Vol 1.7 bln
Nasdaq Adv 2522 Dec 794 Vol 4.7 bln
Industry Watch
Strong: Energy, Consumer Discretionary
Weak: Utilities, Consumer Staples, Health Care, Real Estate
Moving the Market
-- Stocks close higher in volatile session; technology and small-cap stocks outperformed
-- Central banks stepped up stimulus measures to support financial markets, Washington continued to deliberate on stimulus package
-- Oil prices rebound 23% after President Trump says he would get involved in price war between Russia and Saudi Arabia
-- Treasuries advance after two days of selling
WTI crude rebounds 23% following yesterday's drop
19-Mar-20 15:35 ET
Dow +201.66 at 20100.64, Nasdaq +258.26 at 7247.46, S&P +31.45 at 2429.55
[BRIEFING.COM] The major averages continue to trade in positive territory with the S&P 500 up 1.8%, Dow up 1.5%, and Nasdaq up 4.2%.
The strength in the mega-cap technology stocks can account for the outperformance of the Nasdaq, while the benchmark index gets an added boost from the gains in the consumer discretionary (+4.6%) and energy (+4.2%) sectors.
WTI settled today's session up 23.1% (+$4.71) to $20.42/bbl after falling more than 24% yesterday. Today's spike came after President Trump said that he will get involved in the price war between Russia and Saudi Arabia at "the appropriate time."
Stocks post big declines but cut losses into the close
18-Mar-20 16:20 ET
Dow -1338.40 at 19898.98, Nasdaq -344.94 at 6989.20, S&P -131.09 at 2398.10
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 fell 5.2% on Wednesday, although it did drop as much as 9.8% intraday as pandemic fears continued to hit not only stocks but also Treasuries and commodities. A strong finish also pared losses in the Dow Jones Industrial Average (-6.3%) and Nasdaq Composite (-4.7%) but did little for the Russell 2000 (-10.4%).
Despite the coordinated stimulus packages announced by central banks and the massive stimulus plans laid out by Washington, confidence was lacking due to the growing outbreak of COVID-19 and the continued shutdown of the economy. Shortly before the close, the Senate finally passed the House bill that provides unemployment and sick leave benefits.
Selling was widespread and was made most pronounced in the cyclical energy (-14.3%), financials (-8.7%), and industrials (-7.2%) sectors. The energy space was crushed by the 24.4% collapse in WTI crude ($20.42/bbl, -$6.06), which fell to its lowest level since 2002. The communication services sector (-2.8%) declined the least today.
As part of the proposed $1 trillion stimulus package, the Treasury Department clarified today it would seek $300 billion for small business interruption and a secured lending facility of $50 billion for airlines. Separately, the FHFA announced the suspension of foreclosures and evictions for 60 days for enterprise-backed mortgages.
New measures taken to contain the virus included the closure of the U.S.-Canadian border for non-essential traffic and President Trump invoking the Defense Production Act, which gives the White House the right to require companies to manufacture medical supplies in short supply.
Boeing (BA 101.89, -22.25, -17.9%), meanwhile, asked for at least $60 billion of aid, including loan guarantees, for the aerospace industry. AT&T (T 32.85, -0.89, -2.6%), Simon Properties (SPG 44.92, -13.94, -23.7%), and the big three U.S. automakers were among the latest companies to temporarily close or reduce operations.
Safe-haven assets like gold ($1516.40/ozt, -$8.46, -0.6%) and U.S. Treasuries weren't so safe today, with losses suggesting that many investors were raising cash in these uncertain times. Longer-dated maturities remained under heavy selling pressure amid the view that more debt will be needed for the massive fiscal stimulus plans.
The 2-yr yield rose seven basis points to 0.52%, and the 10-yr rose 27 basis points to 1.27%. The U.S. Dollar Index rose 1.4% to 100.97.
Reviewing Wednesday's economic data:
Housing starts were stronger than expected in February at a seasonally adjusted annual rate of 1.599 million (Briefing.com consensus 1.475 million), yet they were down 1.5% m/m and will be expected to drop further in March. Building permits were weaker than expected at 1.464 million (Briefing.com consensus 1.480 million) and were down 5.5% m/m.
The key takeaway from the report is that it will be largely dismissed on the grounds that it is "old" data in a new world that is dealing with economic shutdown measures to curb the spread of COVID-19.
The weekly MBA Mortgage Applications Index declined 8.4% following last week's 55.4% surge.
Looking ahead, investors will receive the weekly Initial Claims and Continuing Claims report, the Q4 Current Account Balance, and the Philadelphia Fed Index for March on Thursday.
Nasdaq Composite: -22.1%
S&P 500: -25.8%
Dow Jones Industrial Average: -30.3%
Russell 2000: -40.6%
Market Snapshot
Dow 19898.98 -1338.40 (-6.30%)
Nasdaq 6989.20 -344.94 (-4.70%)
SP 500 2398.10 -131.09 (-5.18%)
10-yr Note -32/32 1.188
NYSE Adv 182 Dec 2730 Vol 1.9 bln
Nasdaq Adv 340 Dec 3001 Vol 4.9 bln
Industry Watch
Strong: Communication Services, Consumer Staples
Weak: Energy, Industrials, Financials
Moving the Market
-- Widespread selling amid virus fears, cash-raising efforts but stocks cut losses into the close
-- Level 1 circuit breaker triggered for fourth time in two weeks after S&P 500 declines 7.0%
-- Oil loses 24%, longer-dated Treasury yields continued to rise
-- Cyclical sectors led retreat
WTI crude tanks 24%
18-Mar-20 15:25 ET
Dow -1853.50 at 19383.88, Nasdaq -521.77 at 6812.37, S&P -197.42 at 2331.77
[BRIEFING.COM] The S&P 500 currently trades lower by 8.1% and continues to trade below its December 2018 low (2351).
One last look at the S&P 500 sectors shows energy struggling mightily with a 14.8% decline, followed by the financials (-10.8%) and industrials (-10.9%) sectors. The communication services sector (-5.8%) is down the least.
WTI crude tanked 24.4% (-$6.60) to $20.42/bbl.
Stocks rebound amid fiscal and monetary stimulus plans
17-Mar-20 16:25 ET
Dow +1048.86 at 21237.38, Nasdaq +430.19 at 7334.14, S&P +143.06 at 2529.19
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 rebounded 6.0% on Tuesday, as investors reacted positively to additional monetary stimulus measures and the possibility of an estimated $1 trillion fiscal stimulus package. The Dow Jones Industrial Average rose 5.2%, the Nasdaq Composite rose 6.2%, and the Russell 2000 rose 6.7%.
The plan from the White House reportedly includes $500-550 billion for direct payments or tax cuts to Americans, $200-300 billion for small business assistance, and $50-100 billion for airline industry relief. The administration is also considering support for homeowners whose income was cut due to the coronavirus, according to Bloomberg.
The Fed, meanwhile, established a temporary commercial paper funding facility to help alleviate strains induced on commercial paper markets. Companies typically acquire short-term financing from this market. The Treasury Secretary approved the decision and will provide the Fed $10 billion in credit protection and the ability to purchase up to $1 trillion in commercial paper if needed.
Elsewhere, efforts to contain the spread of COVID-19 continued to be made: NYC Mayor Bill De Blasio said New Yorkers should be prepared for an order to "shelter in place," the EU temporarily closed external borders, and Apple (AAPL 252.63, +10.42, +4.3%) extended store closures outside Greater China until further notice.
Despite the stimulus plans, and preventative measures, it was a defensive-minded rally led by the S&P 500 utilities (+13.1%), consumer staples (+8.4%), and real estate (+6.9%) sectors. The energy sector (+0.7%) underperformed amid continued weakness in the price of oil ($27.02/bbl, -1.83, -6.3%).
This defensiveness might be attributed to an understanding that economic disruptions will continue to lead to a negative, and currently unquantifiable, impact to the economy. This was painfully manifested in Marriott (MAR 75.24, -11.18, -12.9%) starting to furlough workers without pay. On a related note, Facebook (FB 149.42, +3.41, +2.3%) said it would give $1000 to employees.
Separately, the slight underperformance of the Dow was mainly due to the loss in shares of Boeing (BA 124.14, -5.47, -4.2%), which had its S&P credit rating downgraded to BBB due to weaker cash flows. President Trump did say he wants to help the company, though.
U.S. Treasuries sold off in a curve-steepening trade, not because of a better economic view but because of worries that longer-dated bonds will be needed to fund a rising deficit. The 2-yr yield rose eight basis points to 0.45%, and the 10-yr yield rose 27 basis points to 1.00%. The U.S. Dollar Index rose 1.7% to 99.81.
Reviewing Tuesday's economic data, which was wasn't fully representative of current conditions caused by the coronavirus:
Total retail sales declined 0.5% m/m (Briefing.com consensus +0.1%) following an upwardly revised 0.6% increase (from 0.3%) in January. Excluding autos, retail sales were down 0.4% m/m (Briefing.com consensus +0.1%) after an upwardly revised 0.6% increase (from 0.3%) in January.
The key takeaway from this report is that it reflected soft spending activity before the the coronavirus impact (and reaction) truly hit the U.S. That's not comforting knowing that the retail sales data in March is going to be absolutely awful.
Industrial production increased 0.6% m/m in February, as expected, following a downwardly revised 0.5% decline (from -0.3%) in January. Total capacity utilization was 77.0% (Briefing.com consensus 77.1%) following a downwardly revised 76.6% (from 76.8%) in January.
The key takeaway from the report is that the good feelings about the pickup in output in February will be stunted by the reality that March output is apt to look much worse given the economic shutdown measures employed to help curb the spread of the coronavirus.
The NAHB Housing Market Index for March declined to 72 (Briefing.com consensus 74) from 74 in February.
The January Job Openings and Labor Turnover Survey showed job openings increase to 6.963 million from a revised 6.552 million in December (from 6.423 million).
Business inventories decreased 0.1% in January, as expected, while the December reading was unrevised at 0.1%.
Looking ahead, investors will receive Housing Starts and Building Permits for February and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite: -18.3%
S&P 500: -21.7%
Dow Jones Industrial Average: -21.4%
Russell 2000: -33.7%
Market Snapshot
Dow 21237.38 +1048.86 (5.20%)
Nasdaq 7334.14 +430.19 (6.23%)
SP 500 2529.19 +143.06 (6.00%)
10-yr Note -26/32 1.087
NYSE Adv 1695 Dec 1174 Vol 2.0 bln
Nasdaq Adv 2216 Dec 1101 Vol 4.8 bln
Industry Watch
Strong: Utilities, Communication Services, Consumer Staples
Weak: Energy
Moving the Market
-- Stocks stage rebound effort following yesterday's massive losses
-- Treasury Secretary Mnuchin says administration wants to give cash to American workers immediately
-- Fed establishes Commercial Paper Funding Facility; will conduct another $500 billion repo operation
-- Relative strength in the defensive-oriented sectors
WTI crude extends decline, closes down 6%
17-Mar-20 15:30 ET
Dow +570.61 at 20759.13, Nasdaq +291.45 at 7195.40, S&P +91.45 at 2477.58
[BRIEFING.COM] The S&P 500 currently trades higher by 3.8%.
One last look inside the S&P 500 shows utilities (+10.3%), consumer staples (+6.4%), and real estate (+6.0%) outperforming the broader market, while the energy sector (unch) trades near its flat line.
WTI crude settled the session down $1.83 (-6.3%) to $27.02/bbl.
Market plummets with worst losses since 1987 as growth concerns dominate
16-Mar-20 16:25 ET
Dow -2997.10 at 20188.52, Nasdaq -970.28 at 6903.95, S&P -324.89 at 2386.13
https://www.briefing.com/stock-market-update
[BRIEFING.COM] There was a crisis of confidence in the stock market today, which led to the worst day of losses since the crash of 1987. The Dow Jones Industrial Average declined 12.9%, the S&P 500 fell 12.0%; the Nasdaq Composite dropped 12.3%; and the Russell 2000 plunged 14.3%.
Confidence was lacking in the monetary policy response; it was lacking in the fiscal response; and it was lacking in the outlook for economic growth and earnings prospects.
The lack of confidence kicked in overnight when the futures market went limit down after the Federal Reserve announced a stunning series of policy measures aimed at supporting the financial markets and the flow of credit.
Specifically, the target range for the fed funds rate was cut by 100 basis points to 0.00% to 0.25%, the discount rate was cut by 150 basis points to 0.25%, a $700 billion quantitative easing program is being implemented, there was coordinated central bank action to enhance liquidity via standing U.S. dollar liquidity swap line arrangements, and bank reserve requirement ratios were reduced to 0.00%, effective March 26.
The policy effort is laudable, yet market participants quickly made it known that it isn't thought to be enough to turn the tide of deteriorating confidence on Main Street and Wall Street.
That confidence has been shaken by a multitude of announcements that made it clear the U.S. economy -- the world's largest economy -- is rapidly sliding into a shutdown mode that will severely curtail earnings prospects and will raise the specter of recession in coming months.
Those announcements included forced closures of restaurants and bars in some states; airlines further cutting their flight capacity further; more and more schools announcing extended closures; Apple (AAPL 242.21, -35.76, -12.9%), and other retailers, announcing that they will voluntarily close their stores; Wynn Resorts (WYNN 54.80, -17.82, -24.4%) and MGM Resorts (MGM 10.25, -5.19, -33.6%) noting they will temporarily suspend their casino/resort operations in Las Vegas; the president recommending to avoid gatherings of 10 or more people; and the city of San Francisco issuing an order for residents to stay inside, except for essential purposes.
In other developments, Canada announced it will be closing its borders to non-citizens, with the exception of permanent residents and Americans. The EU, meanwhile, discussed closing borders for 30 countries to foreigners.
These developments were all part of a mosaic that undermined consumer confidence and investor confidence. The latter was further impacted by a sense of angst that the government has not gone far enough with its fiscal stimulus plans to effectively mitigate the economic fallout from the growing wave of "cocooning" that is expected to lead to a major retrenchment in consumer and business spending and large job losses as a result of that retrenchment.
There was some chatter during the day that the White House is pushing an $800 billion stimulus proposal, half of which would involve a payroll tax cut, and an assistance package for the airline industry. Separately, Senate Minority Leader Schumer was reportedly floating a $750 billion stimulus proposal.
Notwithstanding those ideas, there was nothing concrete as a step-up measure on the fiscal side to alter investor confidence. The end result was wholesale selling of risk assets, which escalated further in the final hour as President Trump and his coronavirus task force conducted a press conference, which featured a suggestion that the trajectory of the virus might not peak until July or August. Importantly, though, it didn't feature any announcement of a fiscal stimulus plan.
The major indices all closed at, or near, their lows for the day, pressured by double-digit percentage losses in ten of the 11 sectors. The lone exception was the consumer staples sector (-7.0%); otherwise, losses ranged from 10.0% (health care) to 16.6% (real estate) in an historic day of trading. All 30 Dow components ended lower, with more than half suffering double-digit percentage losses. Boeing (BA 129.61, -40.59, -23.9%) was the biggest laggard.
Reviewing today's economic data:
The New York Fed's Empire State Manufacturing Survey fell to -21.5 in March (Briefing.com consensus 4.7) from 12.9 in February. The dividing line between expansion and contraction is 0.0.
Tuesday's economic releases will include Retail Sales and Industrial Production for February, Business Inventories for January, and the NAHB Housing Market Index for March.
Nasdaq Composite: -23.0%
S&P 500: -26.1%
Dow Jones Industrial Average: -31.7%
Russell 2000: -41.8%
Stocks Surge to End Wild Week
13-Mar-20 16:20 ET
Dow +1985.00 at 23185.62, Nasdaq +672.43 at 7874.23, S&P +230.31 at 2711.02
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market rebounded on Friday, though the advance still left the major averages deep in the red for the week. The S&P 500 rallied 9.3%, narrowing this week's loss to 8.8% while the Russell 2000 (+7.7%; -16.6% for the week) underperformed.
Stocks jumped out of the gate after equity futures hit a circuit breaker, but this time, it was to the upside. The early rally set expectations for a strong rebound, but the bulk of the cash session was not as inspiring. The first three hours of trade saw a pullback, during which the S&P 500 approached yesterday's closing level. The index returned to its starting mark in midday trade, but regrouped and staged a huge 6.7% rally in the last 30 minutes as the president was discussing measures to deal with the coronavirus.
Lawmakers in Washington neared an agreement on some fiscal relief measures while President Trump declared a national emergency during a late-afternoon speech. The declaration will allow up to $50 bln in spending. Separately, the president said interest on student loans will be waived until further notice and that the U.S. will be purchasing oil to fill the Strategic Petroleum Reserve.
All eleven sectors ended on their highs, which masked intraday volatility. The CBOE Volatility Index (VIX 57.83, -17.64, -23.4%) climbed above yesterday's high before pulling back, indicating the presence of expectations for a continuation of a bumpy ride.
Financials (+13.2%) were at the forefront of today's advance, narrowing this week's loss to 9.8%. The Federal Reserve conducted another emergency liquidity operation, offering to buy Treasury securities of different maturities throughout the day to alleviate significant stress in the Treasury market, which caused bid/ask spreads on longer tenors to widen notably. Treasuries ended the day on a mostly lower note with the 10-yr yield rising ten basis points to 0.95%.
The top-weighted technology sector (+12.0%) also outperformed with Apple (AAPL 277.97, +29.74, +12.0%) rising amid reports that the company's stores in China have reopened. The PHLX Semiconductor Index (+10.9%) finished a bit ahead of the sector thanks to gains in all 30 components. Broadcom (AVGO 234.22, +15.44, +7.1%) missed Q1 expectations and withdrew its guidance for FY20 but recovered its loss during the market's late rally.
The energy sector (+8.8%) was among the weakest performers, trimming this week's loss to 24.3%, which still left the group well behind the other sectors. The sector backed down from its starting high alongside a pullback in crude oil, which ended the day higher by $0.23, or 0.7%, at $31.80/bbl after hitting a session high of $33.87/bbl.
Reviewing today's economic data:
Import prices declined 0.5% month-over-month in February and were up 0.3% excluding fuel. Export prices were down 1.1%, and down 1.0% excluding agricultural products. On a year-over-year basis, import prices were down 1.2%, and down 0.7% excluding fuel. Export prices were down 1.3% yr/yr, and down 1.6% excluding agricultural products.
The key takeaway from the report is that inflation is still missing for the most part in terms of both import and export prices.
The preliminary March reading for the University of Michigan's Index of Consumer Sentiment showed a drop to 95.9 (Briefing.com consensus 96.0) from the final reading of 101.0 for February.
The key takeaway from the report is that sentiment has been shaken by the spread of the coronavirus and the sharp decline in stock prices, both of which are weighing on expectations that should translate into lower levels of consumer spending activity.
Monday's economic data will be limited to the 8:30 ET release of the Empire State Manufacturing Survey (prior 12.9) and Net Long-Term TIC Flows at 16:00 ET (prior $85.60 bln).
Nasdaq Composite -12.2% YTD
S&P 500 -16.1% YTD
Dow Jones Industrial Average -18.8% YTD
Russell 2000 -27.5% YTD
Market Snapshot
Dow 23185.62 +1985.00 (9.36%)
Nasdaq 7874.23 +672.43 (9.34%)
SP 500 2711.02 +230.31 (9.28%)
10-yr Note -1 6/32 0.951
NYSE Adv 2536 Dec 352 Vol 2.01 bln
Nasdaq Adv 2443 Dec 878 Vol 4.61 bln
Industry Watch
Strong: Financials, Information Technology
Weak: Energy, Utilities, Health Care
Moving the Market
-- Stocks recoup some losses from yesterday's awful day but are trading near session lows
-- Global central banks step up stimulus/liquidity efforts
-- Fiscal relief package reportedly close to being reached
President Trump Expected to Speak Soon
13-Mar-20 15:25 ET
Dow +902.15 at 22102.87, Nasdaq +280.87 at 7482.68, S&P +103.29 at 2583.93
[BRIEFING.COM] The S&P 500 is higher by 3.8%, trading about 50 points below its session high.
President Trump is expected to declare a national coronavirus emergency during an address from the White House. The address was scheduled to begin at 15:00 ET.
Crude oil climbed $0.23, or 0.7%, to $31.80/bbl today, but fell nearly $10.00, or 23.0%, for the week. The energy sector (+1.8%) continues holding a portion of its gain, but it is set to end the week behind the remaining ten sectors with a loss of 29.2%.
Stocks deepen losses in brutal session despite central bank stimulus
12-Mar-20 16:20 ET
Dow -2352.60 at 21200.72, Nasdaq -750.25 at 7201.81, S&P -260.74 at 2480.64
https://www.briefing.com/stock-market-update
[BRIEFING.COM] Each of major indices dropped more than 9% on Thursday, as new stimulus measures from central banks failed to stir confidence among investors without a meaningful fiscal response from Washington. The Russell 2000 (-11.2%) led the retreat, followed by the Dow Jones Industrial Average (-10.0%), S&P 500 (-9.5%), and Nasdaq Composite (-9.4%) with each closing down more than 25% from prior highs.
For the second time this week, the S&P 500 triggered a 15-minute trading halt after falling by 7.0% shortly after the open following more economic disruptions caused by the coronavirus. Notable ones included President Trump suspending travel from most European countries for 30 days and major sports leagues in the U.S. suspending their 2019-2020 seasons.
Few asset classes were safe today. The S&P 500 sectors lost between 7.4% (health care) and 12.3% (energy). WTI crude fell 4.3%, or $1.43, to $31.57/bbl. Gold futures fell 3.2% to $1589.80/ozt. The 2-yr yield was unchanged at 0.49%, and the 10-yr yield increased three basis points to 0.85% amid selling pressure. The U.S. Dollar Index rose 0.8% to 97.25.
Notably, the benchmark index cut its intraday decline to 2.9% after the New York Fed announced repurchase operations totaling more than $1.5 trillion, while stocks in Europe accelerated losses following a lackluster ECB response. The ECB didn't cut its key policy rates, and instead announced additional net asset purchases through the end of the year with additional longer-term refinancing operations.
While it's encouraging that central banks are committed in ensuring ample liquidity in these disastrous trading conditions, it's unlikely that the measures will boost consumer confidence. Elsewhere, the reported disagreements within the White House regarding a stimulus plan only exacerbated the dire mood on Wall Street.
Progress is reportedly being made, though, with the U.S. Senate to remain in session next week instead of going on recess. President Trump is expected to sign a declaration to unlock more funding to fight the COVID-19, according to Politico.
The market wants strong and immediate action, as well as signs that the coronavirus situation will get better. The CBOE Volatility Index, which is commonly referenced as a fear gauge, surged 40.0% to 75.47-- its highest level since the financial crisis -- as investors rushed for more protection against further equity weakness.
Reviewing Thursday's economic data:
The Producer Price Index for February declined 0.6% m/m (Briefing.com consensus -0.2%) while core PPI, which excludes food and energy, declined 0.3% (Briefing.com consensus 0.1%). That left the yr/yr readings at 1.3% and 1.4%, respectively.
The key takeaway from the report is that it was weighed down sharply by the decline in energy prices, which was prominent in final demand goods, processed goods for intermediate demand, and unprocessed goods for intermediate demand.
Initial jobless claims decreased by 4,000 for the week ending March 7 to 211,000 (Briefing.com consensus 218,000). Continuing claims for the week ending February 29 decreased by 11,000 to 1.722 million.
The key takeaway from the report is that the good news in it will be overlooked, as subsequent developments suggest there will be a tide of rising initial claims in coming weeks.
Looking ahead, investors will receive the preliminary University of Michigan Index of Consumer Sentiment for March and Export and Import Prices for February on Friday.
Nasdaq Composite -19.7% YTD
S&P 500 -23.2% YTD
Dow Jones Industrial Average -25.7% YTD
Russell 2000 -32.7% YTD
Market Snapshot
Dow 21200.72 -2352.60 (-9.99%)
Nasdaq 7201.81 -750.25 (-9.43%)
SP 500 2480.64 -260.74 (-9.51%)
10-yr Note -14/32 0.862
NYSE Adv 75 Dec 2788 Vol 2.2 bln
Nasdaq Adv 187 Dec 3166 Vol 5.0 bln
Industry Watch
Strong: None
Weak: Energy, Industrials, Financials, Utilities
Moving the Market
-- Stock market deepened losses by more than 9%
-- New York Fed and ECB announce new stimulus measures, but investors still await fiscal stimulus
-- Economic slowdown concerns heightened after President Trump suspended travel from Europe for 30 days among other disruptions to the economy
-- 15-minute stoppage after S&P 500 falls 7.0% for second time this week
WTI crude falls 4.3% amid market turmoil
12-Mar-20 15:30 ET
Dow -2049.30 at 21504.02, Nasdaq -662.79 at 7289.27, S&P -228.95 at 2512.43
[BRIEFING.COM] The S&P 500 currently trades lower by 8.4% and is now down 26.0% from its all-time high.
One last look at the S&P 500 sector standings shows losses ranging from 5.9% (health care) to 9.9% (energy).
WTI crude settled down $1.43 (-4.3%) to $31.57/bbl.
Dow closes in bear market territory amid pandemic fears
11-Mar-20 16:25 ET
Dow -1464.90 at 23553.32, Nasdaq -392.20 at 7952.06, S&P -140.85 at 2741.38
https://www.briefing.com/stock-market-update
[BRIEFING.COM] It was an ugly day for stocks on Wednesday with the Dow Jones Industrial Average (-5.9%) closing in bear market territory, or down 20% from a recent high, amid recessionary fears induced by the coronavirus. The S&P 500 fell 4.9%, the Nasdaq Composite fell 4.7%, and the Russell 2000 fell 6.4%.
The World Health Organization officially declared COVID-19 as a global pandemic, and with no stimulus plan enacted from Washington, the market was left with discouraging news updates that heightened the economic uncertainty.
Large events were banned in Washington State and San Francisco with many more getting canceled or delayed in other U.S. states. Dr. Fauci, the director for the National Institute of Allergy and Infectious Diseases, cautioned that the worst is yet to come. President Trump was even reportedly considering new travel restrictions on Europe.
It was an orderly retreat on Wall Street with sector losses ranging from 3.9% (health care) to 5.9% (industrials). The market did close off its lows, though, pulling the S&P 500 out of bear market territory, in front of a statement from President Trump tonight.
Boeing (BA 189.08, -41.93, -18.2%) shares dropped 18% on news that it froze hiring and will be drawing on its $13.8 billion loan earlier than expected due to the coronavirus. PepsiCo (PEP 129.75, -4.39, -3.3%), meanwhile, secured a deal during the market turbulence, agreeing to purchase Rockstar Energy Beverages for $3.85 billion.
Separately, the NY Fed announced it will raise daily oversight repo limits to $175 billion from $150 billion beginning tomorrow and continuing through April 13 in response to unfavorable market conditions caused by the coronavirus. Elsewhere, the Bank of England issued an emergency 50-basis points rate cut to 0.25%, but the UK's FTSE still declined 1.5%.
Notably, U.S. Treasuries didn't exhibit the flight-to-safety one would expect during an exodus from stocks. Some profit taking and speculation that Washington will have to issue more debt to finance a fiscal stimulus plan were the leading explanations for the decline in bonds.
The 2-yr yield increased three basis points to 0.50%, and the 10-yr yield increased seven basis points to 0.82%. The U.S. Dollar Index increased 0.1% to 0.82%. WTI crude fell 3.7%, or $1.25, to $33.00/bbl amid news that Saudi Arabia ordered Saudi Aramco to boost production by 1 million barrels per day to 13 million barrels per day.
Reviewing Wednesday's economic data, which featured the Consumer Price Index for February:
According to the BLS, the Consumer Price Index (CPI) increased 0.1% m/m in February (Briefing.com consensus 0.0%) while core CPI, which excludes food and energy, rose 0.2% (Briefing.com consensus 0.2%). Those changes left CPI up 2.3% yr/yr, versus 2.5% in January, and core CPI up 2.4%, versus 2.3% in January.
The key takeaway from the report is that it isn't going to alter the market's belief that the Federal Reserve will soon be cutting the target range for the fed funds rate in size at next week's FOMC meeting (if not sooner).
The Treasury Budget for February showed a deficit of $235.34 bln versus a deficit of $233.98 bln a year ago. The Treasury Budget data is not seasonally adjusted, so the February deficit cannot be compared to the deficit of $32.6 billion for January.
The weekly MBA Mortgage Applications Index surged 55.4% following a 15.1% increase in the prior week.
Looking ahead, investors will receive the Producer Price Index for February and the weekly Initial and Continuing Claims report on Thursday.
Nasdaq Composite -11.4% YTD
S&P 500 -15.2% YTD
Dow Jones Industrial Average -17.5% YTD
Russell 2000 -24.2% YTD
Market Snapshot
Dow 23553.32 -1464.90 (-5.86%)
Nasdaq 7952.06 -392.20 (-4.70%)
SP 500 2741.38 -140.85 (-4.89%)
10-yr Note -5/32 0.862
NYSE Adv 150 Dec 2665 Vol 1.8 bln
Nasdaq Adv 378 Dec 2910 Vol 4.3 bln
Industry Watch
Strong: none
Weak: Real Estate, Industrials, Utilities
Moving the Market
-- Stock market sells off more than 5.5% amid virus pandemic fears
-- Fiscal stimulus hopes dim as economic slowdown starts to manifest in nationwide event cancellations
-- Longer-dated Treasuries also decline
S&P 500 technically enters bear market territory
11-Mar-20 15:25 ET
Dow -1653.30 at 23364.92, Nasdaq -486.22 at 7858.04, S&P -170.79 at 2711.44
[BRIEFING.COM] The S&P 500 is down 5.8% and entered bear market territory earlier, having fallen at least 20.0% from its recent (all-time) high.
One last look at the S&P 500 sectors shows seven sectors down at least 6.0%. Losses range from 4.9% (health care) to 6.8% (industrials).
WTI crude fell $1.25 (-3.7%) to $33.00/bbl amid news that Saudi Arabia ordered Saudi Aramco to boost production by 1 million barrels per day to 13 million barrels per day.
Stocks post worst day since 2008 as oil tanks 25%
09-Mar-20 16:10 ET
Dow -2013.70 at 23851.08, Nasdaq -624.94 at 7950.68, S&P -225.81 at 2746.56
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 dropped 7.6%, oil prices tanked 25%, and Treasury yields continued to fall to unprecedented levels on Monday after Saudi Arabia initiated a price war and coronavirus cases accelerated.
The Dow Jones Industrial Average (-7.8%) and Nasdaq Composite (-7.3%) performed comparably to the benchmark index, while the Russell 2000 (-9.4%) underperformed.
Saudi Arabia lowered its oil price for April delivery by $6-$8/bbl and signaled production boosts for an oversupplied market after Russia failed to agree to production cuts last Friday. WTI crude settled the session down 24.8%, or $10.23, to $31.09/bbl for its worst decline since 1991, which took a heavy toll on the S&P 500 energy sector (-20.1%).
The oil shock exacerbated recessionary concerns already fueled by the rapid spread of the coronavirus, as speculation arose about potential layoffs and defaults within the highly-leveraged energy space. The other ten S&P 500 sectors posted losses between 4.4% (consumer staples) and 10.9% (financials).
The financials space remained pressured by the sharp decline in Treasury yields, as investors continued to seek safety in bonds. The 2-yr yield fell 18 basis points to 0.32%, and the 10-yr yield fell 21 basis points to 0.50% after touching 0.34% at its low. The U.S. Dollar Index dropped 1.0% to 95.02.
Stocks were halted from trading for 15 minutes in the opening minutes of action after the S&P 500's 7.0% decline triggered a circuit breaker. At that point, the S&P 500 was down 18.5% from its all-time high and later it nearly entered bear market territory, which is typically defined as a loss of at least 20% from a recent high.
Expectations for stimulus measures from central bankers and policymakers rose amid the market turmoil. The fed funds futures market is expecting the Fed to cut rates by at least 75 basis points at its policy meeting next week, while the possibility of tax relief was floated by Senate Republicans.
In corporate news, there was a sizable deal struck today. Aon (AON 178.92, -35.89, -16.7%) agreed to acquire Willis Towers Watson (WLTW 184.74, -14.97, -7.5%) in an all-stock transaction that values the combined company at about $80 billion.
Investors did not receive any economic data on Monday. Looking ahead, the NFIB Small Business Optimism Index for February will be released on Tuesday.
Nasdaq Composite -11.4% YTD
S&P 500 -15.0% YTD
Dow Jones Industrial Average -16.4% YTD
Russell 2000 -21.3% YTD
Market Snapshot
Dow 23851.08 -2013.70 (-7.79%)
Nasdaq 7950.68 -624.94 (-7.29%)
SP 500 2746.56 -225.81 (-7.60%)
10-yr Note +19/32 0.579
NYSE Adv 70 Dec 2832 Vol 2.1 bln
Nasdaq Adv 175 Dec 3127 Vol 4.5 bln
Industry Watch
Strong: none
Weak: Energy, Financials
Moving the Market
-- Stock market closes down more than 7%
-- S&P 500 triggers circuit breaker after falling 7.0% shortly after the open, temporarily halted for 15 minutes at NYSE
-- Saudi Arabia launches price war by cutting oil prices and signaling production boosts
-- Coronavirus cases climb in the U.S. and elsewhere
-- Treasury yields drop to unprecedented levels
Crude settles down 25%
09-Mar-20 15:25 ET
Dow -1794.40 at 24070.38, Nasdaq -532.74 at 8042.88, S&P -200.75 at 2771.62
[BRIEFING.COM] The S&P 500 is down 7.0% and continues to trade below the 2800 level.
One last look at the S&P 500 sectors shows energy (-19.3%) continued to lead the broad-based retreat with a steep 19% decline. The financials sector (-9.0%) follows suit, while the consumer staples sector (-4.6%) is down the least.
WTI crude settled the session down $10.23 (-24.8%) to $31.09/bbl for its worst decline since 1991. The last time crude traded at this level was in 2016.
Market Remains on Edge as Growth Concerns Build
06-Mar-20 16:25 ET
Dow -256.50 at 25864.78, Nasdaq -162.98 at 8575.62, S&P -51.57 at 2972.37
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market ended a volatile week on a lower note with the S&P 500 (-1.7%) settling just above its low from Monday. The benchmark index gained 0.6% for the week while the Dow Jones Industrial Average (-1.0%) outperformed, gaining 1.8% since last Friday.
The final session of the week was marred by a continued deterioration of sentiment due to the ongoing spread of the coronavirus while the pressure on growth expectations intensified. Treasuries essentially never stopped after Thursday's cash close, continuing their forceful charge in the overnight futures market. Treasuries did pull back from their highs in midday trade, but the long bond rallied to a fresh record high in the afternoon while the 10-yr note stopped a bit short of its best level of the day. The 10-yr yield fell 22 basis points to 0.71%, representing a 42-basis point drop for the week.
Expectations for another sharp rate cut remain in place with the fed funds futures market pointing to a 56.0% implied likelihood of a 75-basis point rate cut at or before the conclusion of the FOMC meeting on March 18.
The S&P 500 staged a 70-point rally during the final hour of trade, which led to a significant improvement in final sector standings, though all eleven sectors finished in the red.
Four groups surrendered 2.0% or more. Energy (-5.6%) and financials (-3.3%) were particularly weak throughout the day due to their exposure to growth and concerns about issuers of high-yield debt in the energy sector.
Bank stocks suffered from the drop in Treasury yields while energy companies struggled as oil fell $4.57, or 10.0%, to $41.32/bbl. The energy component ended the day at its lowest level since mid-2016 after OPEC+ could not agree to a sharp production cut despite yesterday's reports to the contrary. Russia's Energy Minister, Alexander Novak, said that OPEC+ countries are free to pump at will starting from April 1.
Airline stocks like Alaska Air (ALK 45.21, +1.75, +4.0%), JetBlue Airways (JBLU 13.88, +0.02, +0.1%), United Airlines (UAL 52.10, +0.51, +1.0%), and Delta Air Lines (DAL 45.89, +0.88, +2.0%) recorded gains on Friday after recovering from fresh multi-year lows. Alaska Air did warn that its guidance for FY20 should no longer be relied upon due to coronavirus-related uncertainty.
Shares of cruise operators started the day in positive territory but retreated as the day went on. Norwegian Cruise Line Holdings (NCLH 27.10, -1.49, -5.2%) was the weakest performer of the bunch, stopping just above its record low (24.16) that was notched when the company went public in early 2013.
In company-specific news, Costco (COST 311.28, -4.48, -1.4%) reported better than expected Q2 results, but the stock still finished lower. AMD (AMD 48.59, +0.48, +1.0%) fared better than the broader market after reaffirming its guidance for FY20. The chipmaker did caution that Q1 results are likely to be on the low end of its guidance.
The CBOE Volatility Index (VIX 42.14, +2.52, +6.4%) hit an 11-year high at 54.39%, before pulling back as the market jumped off lows in late trade.
Reviewing today's economic data:
February nonfarm payrolls increased by 273,000 (Briefing.com consensus 170,000). Job gains have averaged 243,000 over the last three months. January nonfarm payrolls revised to 273,000 from 225,000
February private sector payrolls increased by 228,000 (Briefing.com consensus 160,000). January private sector payrolls revised to 222,000 from 206,000
February unemployment rate was 3.5% (Briefing.com consensus 3.6%), versus 3.6% in January. Persons unemployed for 27 weeks or more accounted for 19.2% of the unemployed versus 19.9% in January
February average hourly earnings were up 0.3% (Briefing.com consensus +0.3%) after increasing 0.2% in January. Over the last 12 months, average hourly earnings have risen 3.0%, versus 3.1% for the 12 months ending in January
The average workweek in February was 34.4 hours (Briefing.com consensus 34.3), versus 34.3 hours in January
The labor force participation rate was unchanged at 63.4%
The trade deficit narrowed to $45.3 billion (Briefing.com consensus -$46.0 billion) in January from an upwardly revised -$48.6 billion (from -$48.9 bln) in December.
The key takeaway from the report is that it featured a decline in both exports and imports; however, the understanding that this is a January report (i.e. doesn't capture the brunt of the coronavirus impact) will diminish market interest in it
Wholesale inventories decreased by 0.4% in January (Briefing.com consensus -0.2%) after decreasing 0.3% in December
Total consumer credit increased by $12.00 bln in January (Briefing.com consensus $17.50 bln) after increasing a revised $20.20 bln (from $22.00 bln) in December.
There is no economic data on Monday's schedule.
Nasdaq Composite -4.4% YTD
S&P 500 -8.0% YTD
Dow Jones Industrial Average -9.4% YTD
Russell 2000 -13.1% YTD
Market Snapshot
Dow 25864.78 -256.50 (-0.98%)
Nasdaq 8575.62 -162.98 (-1.87%)
SP 500 2972.37 -51.57 (-1.71%)
10-yr Note +28/32 0.706
NYSE Adv 521 Dec 2260 Vol 1.61 bln
Nasdaq Adv 681 Dec 2547 Vol 4.26 bln
Industry Watch
Strong: Industrials, Consumer Discretionary
Weak: Financials, Energy, Materials, Technology
Moving the Market
Stocks remain pressured by plunging growth expectations/falling Treasury yields
Better than expected February jobs report overlooked by the market
Crude Oil Near Four-Year Low
06-Mar-20 15:25 ET
Dow -649.40 at 25471.88, Nasdaq -290.22 at 8448.38, S&P -97.30 at 2926.64
[BRIEFING.COM] The S&P 500 trades lower by 3.2% going into the final 30 minutes of the session.
The benchmark index has jumped more than 25 points over the past 30 minutes as the magnitude of moves in the market remains amplified. The S&P 500 has narrowed this week's loss to 0.9% while the Dow (-2.5%) is up 0.3% for the week.
Crude oil fell $4.57, or 10.0%, to $41.32/bbl, ending the day at its lowest level since mid-2016 after OPEC+ failed to reach an agreement to reduce output.
Midweek Surge Reversed as Volatility Persists
05-Mar-20 16:20 ET
Dow -969.58 at 26121.28, Nasdaq -279.49 at 8738.60, S&P -106.18 at 3023.94
https://www.briefing.com/stock-market-update
[BRIEFING.COM] A volatile week continued on Thursday as the major averages surrendered the entirety of their big gains from Wednesday, with the S&P 500 (-3.4%) sliding back below its 200-day moving average (3051).
Equities started the day well below yesterday's closing levels as sentiment remained pressured by the continued uncertainty associated with the spread of the coronavirus. The first couple hours of action saw a rebound attempt, which ran out of steam after the S&P 500 briefly climbed above its opening mark.
Treasuries continued charging higher, smashing the 10-yr yield to a fresh record low of 0.899%. The benchmark yield settled lower by seven basis points at 0.93%, reflecting the market's concerns about growth. The fed funds futures market, for its part, is almost certain that the fed funds rate range will be slashed by another 50 basis points on March 18.
These growth concerns, along with a continuation of a negative news flow, kept the market heading southward. Italy reported that the number of deaths among patients diagnosed with the coronavirus increased to 148 from 107 on Wednesday while British Prime Minister, Boris Johnson, has reportedly been advised to expect a significant spread of COVID-19 in the U.K. In the U.S., community spread cases of the coronavirus were reported in New York and San Francisco.
All eleven sectors lost more than 1.0% with seven groups falling 3.0% or more. Financials (-4.9%) and energy (-3.6%) spent the day at the bottom of the leaderboard, considering these groups are highly sensitive to growth. The energy sector received no assistance from crude oil, which fell $0.88, or 1.9%, to $45.89/bbl even though OPEC reportedly agreed to reduce output by 1.5 million barrels per day.
Travel-related stocks endured another ugly day with cruise operators like Royal Caribbean (RCL 65.78, -12.80, -16.3%), Carnival (CCL 27.87, -4.59, -14.1%), and Norwegian Cruise Line Holdings (NCLH 28.59, -4.41, -13.4%) spending the day at the bottom of the S&P 500 leaderboard. These three names are now down about 50% from this year's highs.
Airlines also faced notable selling pressure after Southwest Air (LUV 45.25, -1.68, -3.6%) lowered its Q1 operating revenue guidance by $200-$300 mln. Concerns about others following had Alaska Air (ALK 43.46, -6.23, -12.5%) and American Airlines (AAL 16.04, -2.49, -13.4%) finishing at the bottom of the Dow Jones Transportation Average (-5.3%).
Retailer Kroger (KR 33.47, +2.51, +8.1%) escaped today's carnage, spiking to a level not seen in more than two years after a slight Q4 beat. American Eagle Outfitters (AEO 11.86, -1.01, -7.9%) started in the green after beating quarterly expectations but fell to its lowest level since mid-2017 intraday.
The CBOE Volatility Index (VIX 39.67, +7.68, +24.0%) jumped almost eight points today but stopped shy of reaching its intraday high from Monday (43.77%).
Gold spiked almost 2.0% to trade within $20 of its high from February 24 ($1691.70/ozt).
Reviewing today's economic data:
Nonfarm business sector labor productivity increased 1.2% in the fourth quarter (Briefing.com consensus 1.3%), according to a revised estimate, versus an originally reported 1.4% increase. Unit labor costs were revised down to 0.9% (Briefing.com consensus 1.4%) from 1.4%.
The key takeaway from the revision is that productivity was relatively weak in the fourth quarter, which is a headwind to an increased standard of living.
Factory orders declined 0.5% m/m in January (Briefing.com consensus -0.1%) following an upwardly revised 1.9% increase (from 1.8%) in December. Shipments also declined 0.5% m/m in January after increasing 0.5% in December.
The key takeaway from the report is that it didn't alter the view that business spending was decent in January, evidenced by a 1.1% increase in new orders for nondefense capital goods excluding aircraft, which was unchanged from the Advanced Durable Goods Orders report.
Initial claims for the week ending February 29 were down 3,000 to 216,000 (Briefing.com consensus 215,000). Continuing claims for the week ending February 22 increased by 7,000 to 1.729 million.
The key takeaway is that the labor market still isn't showing signs of cracking due to the coronavirus, yet that understanding will be offset by the fear that it's going to move in that direction.
February Nonfarm Payrolls (Briefing.com consensus 170,000; prior 225,000), Nonfarm Private Payrolls (Briefing.com consensus 160,000; prior 206,000), Average Hourly Earnings (Briefing.com consensus 0.3%; prior 0.3%), Average Workweek (Briefing.com consensus 34.3; prior 34.3), Unemployment Rate (Briefing.com consensus 3.6%; prior 3.6%), and January Trade Balance (Briefing.com consensus -$46.00 bln; prior -$48.90 bln) will be reported tomorrow at 8:30 ET, followed by January Wholesale Inventories (Briefing.com consensus -0.2%; prior -0.3%) at 10:00 ET, and January Consumer Credit (Briefing.com consensus $17.50 bln; prior $22.00 bln) at 15:00 ET.
Nasdaq Composite -2.6% YTD
S&P 500 -6.4% YTD
Dow Jones Industrial Average -8.5% YTD
Russell 2000 -11.4% YTD
Market Snapshot
Dow 26121.28 -969.58 (-3.58%)
Nasdaq 8738.60 -279.49 (-3.10%)
SP 500 3023.94 -106.18 (-3.39%)
10-yr Note +19/32 0.926
NYSE Adv 314 Dec 2488 Vol 1.40 bln
Nasdaq Adv 578 Dec 2641 Vol 3.71 bln
Industry Watch
Strong:
Weak: Financials, Energy, Industrials, Materials, Communication Services
Moving the Market
Treasuries continue climbing
Volatility continues as coronavirus-related worries persist
Foxconn reports 14% yr/yr decrease in revenue for January and February
On Lows Into Home Stretch
05-Mar-20 15:25 ET
Dow -1109.01 at 25981.85, Nasdaq -329.85 at 8688.24, S&P -126.03 at 3004.09
[BRIEFING.COM] The major averages have slid to fresh session lows going into the final 30 minutes of action. The S&P 500 (-4.0%) is now revisiting its opening level from Tuesday, narrowing this week's gain to 1.7%.
Investor sentiment remains bruised, which has kept a lid on all rebound attempts. The CBOE Volatility Index (VIX 42.38, +10.39, +32.5%) could overtake its high from Monday if it climbs another two points before today's session ends.
In commodities, crude oil fell $0.88, or 1.9%, to $45.89/bbl even though OPEC reportedly agreed to reduce output by 1.5 mln barrels per day.
Health Care Paces Midweek Bounce
04-Mar-20 16:20 ET
Dow +1173.45 at 27090.86, Nasdaq +334.00 at 9018.09, S&P +126.75 at 3130.12
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market rallied on Wednesday with the Dow (+4.5%), Nasdaq (+3.9%), and S&P 500 (+4.2%) erasing their losses from Tuesday.
Equities benefited from a general improvement in sentiment, which was reflected by a mixed stock session in Asia and gains in European markets. That provided significant encouragement for U.S. equities even though there was no improvement on the coronavirus front. On the contrary, Italy's Prime Minister, Giuseppe Conte, warned that Italy's health care system, which is among the best in the world, is on the verge of being overwhelmed while sporting events will be conducted without fans through April 3.
Once again, the Treasury market did not share the optimism of the stock market, though midday action saw Treasuries back down from their highs as equities rallied to best levels of the day. The long bond recorded a slight loss, lifting its yield by a basis point to 1.64%, while the 10-yr note and shorter tenors finished in the green. The 10-yr yield slipped another two basis points to 0.99% while the 2-yr yield fell nine basis points to 0.63%.
All eleven sectors finished with gains of 2.0% or more while six groups added more than 4.0%. While the rally produced big gains, there was a defensive quality to it. The health care sector (+5.8%) held the lead throughout the day thanks to big gains in insurer stocks after Joe Biden won the bulk of yesterday's primaries, seizing the delegate count lead from Bernie Sanders, who favors nationalizing the health insurance industry.
Health care was followed by higher yielding groups like utilities (+5.7%) and consumer staples (+4.9%) while the top-weighted technology sector (+4.3%) finished just ahead of the broader market. Chipmakers had a particularly strong showing, as the PHLX Semiconductor Index jumped 4.9% with all 30 components ending in the green.
Stocks extended their rally in the afternoon, which helped battered airline shares climb out of the red after American Airlines (AAL 18.52, +0.67, +3.8%), JetBlue Airways (JBLU 15.54, +0.53, +3.5%), and United Airlines (UAL 59.47, +1.18, +2.0%) hit fresh multi-year lows. Falling demand for travel prompted United Airlines to reduce its domestic routes for April by 10% while international service will be reduced by 20%.
The energy sector (+2.2%) was the weakest performer as crude oil slid $0.46, or 1.0%, to $46.77/bbl.
Congress is expected to approve $7.80 bln in emergency spending on efforts to counter the outbreak of the coronavirus.
Reviewing today's economic data:
The ISM Non-Manufacturing Index for February registered a 57.3% reading (Briefing.com consensus 54.8%) versus 55.5% in January. The February reading is the highest reading for the index since February 2019
The key takeaway from the report is that the February number is encouraging in its own right, but with the coronavirus caseload rising in the U.S. and the public's attention to containing it increasing, doubts are festering that the strength can be sustained
The ADP Employment Change report pointed to the addition of 183,000 nonfarm payrolls in February (Briefing.com consensus 165,000) while the January reading was revised down to 209,000 from 291,000
The weekly MBA Mortgage Index spiked 15.1% to follow last week's 1.5% increase. The Refinance Index spiked 26.0% while the Purchase Index fell 2.7%
The Federal Reserve's March Beige Book noted that activity expanded at a modest to moderate pace during the survey period, though St. Louis and Kansas City reported no growth. Consumer spending increased, but in uneven fashion. There was no significant growth in tourism with early indications of reduced activity due to the coronavirus
Weekly Initial Claims (Briefing.com consensus 215,000; prior 219,000), Continuing Claims (prior 1.724 mln), revised Q4 Productivity (Briefing.com consensus 1.3%; prior 1.4%), and revised Q4 Unit Labor Costs (Briefing.com consensus 1.4%; prior 1.4%) will be reported at 8:30 ET tomorrow, followed by January Factor Orders (Briefing.com consensus -0.1%; prior 1.8%) at 10:00 ET.
Nasdaq Composite +0.5% YTD
S&P 500 -3.1% YTD
Dow Jones Industrial Average -5.1% YTD
Russell 2000 -8.2% YTD
Market Snapshot
Dow 27090.86 +1173.45 (4.53%)
Nasdaq 9018.09 +334.00 (3.85%)
SP 500 3130.12 +126.75 (4.22%)
10-yr Note -2/32 0.992
NYSE Adv 2411 Dec 416 Vol 1.23 bln
Nasdaq Adv 2500 Dec 718 Vol 3.55 bln
Industry Watch
Strong: Health Care, Utilities, Real Estate, Consumer Staples, Technology
Weak: Financials, Energy
Moving the Market
Health insurers boosted after Joe Biden wins most of last night's Democratic primaries
Treasuries remain bid despite gains in stocks
Near Highs Into Home Stretch
04-Mar-20 15:25 ET
Dow +948.78 at 26866.19, Nasdaq +258.94 at 8943.03, S&P +100.73 at 3104.10
[BRIEFING.COM] The S&P 500 (+3.4%) just below its best level of the day with 30 minutes to go. Thanks to today's advance, the benchmark index is set to reclaim its entire loss from yesterday.
The health care sector (+4.9%) jumped out to a lead at the start, and it has remained in that spot throughout the day. The energy sector (+1.2%) is the weakest performer of the day after crude oil surrendered $0.46, or 1.0%, to $46.77/bbl.
Market Scoffs at Emergency Rate Cut
03-Mar-20 16:20 ET
Dow -785.91 at 25917.41, Nasdaq -268.07 at 8684.09, S&P -86.86 at 3003.37
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market endured another volatile day that had the S&P 500 (-2.8%) traverse a 160-point range before settling back below its 200-day moving average (3049).
Yesterday's broad-based rally was followed by more gains in most Asian equity markets while central banks from the region lined up to offer support. The Bank of Japan announced readiness to purchase another JPY500 bln worth of JGBs while the Reserve Bank of Australia cut its cash rate to a record low of 0.50% and signaled willingness to go back to the easing well once again.
Stocks began the cash session on a modestly lower note with the early weakness blamed on a joint statement from G7 finance ministers and central bankers, which did not call for immediate easing measures. Strikingly, a mid-morning announcement of an emergency fed funds rate cut invited a 76-point spike in the S&P 500, which vanished in just over an hour.
The Federal Reserve acquiesced to the bond market's recent screams for a sharp rate cut, slashing the fed funds rate range by 50 basis points to 1.00-1.25%. The news was met with a brief dip in the bond market, followed by a vicious rally that lifted the 10-yr note and the long bond to fresh record highs, pressuring their yields to fresh record lows of 0.908% and 1.508%, respectively. Late afternoon trade saw some backtracking from highs, which left the 10-yr yield down eight basis points for the day, at 1.01%.
All eleven sectors ended the day in negative territory, with six sectors losing 2.0% or more. Technology (-3.8%), financials (-3.7%), and communication services (-3.3%) finished at the bottom of the leaderboard while lightly weighted real estate (-0.1%) and materials (-0.8%) outperformed throughout the day.
Travel-related stocks remained among the biggest movers as the number of new coronavirus cases continued mounting in the U.S. and elsewhere. Airlines tried staging a morning recovery, but they ended among the biggest laggards with American Airlines (AAL 17.85, -1.01, -5.4%) and United Airlines (UAL 58.29, -2.97, -4.9%) revisiting yesterday's lows. Alphabet (GOOG 1341.39, -47.72, -3.4%) reportedly cancelled its I/O conference and asked employees to avoid international travel.
Retailers Kohl's (KSS 37.43, -1.01, -2.6%) and Target (TGT 105.84, -3.22, -3.0%) exceeded quarterly earnings expectations, but could not avoid sharing the broader market's fate.
Newmont Corporation (NEM 49.73, +2.90, +6.2%) was the top performer in the S&P 500 as gold surged 3.1% to $1643.60/ozt. In other commodities, crude oil climbed $0.44, or 0.9%, to $47.23/bbl, recording its second consecutive advance. An OPEC+ panel recommended reducing oil output by 600,000 barrels per day in the second quarter, according to Reuters.
Tomorrow's economic data will include the 7:00 ET release of the weekly MBA Mortgage Index (prior 1.5%), February ADP Employment Change (Briefing.com consensus 165,000; prior 291,000) at 8:15 ET, February ISM Non-Manufacturing Index (Briefing.com consensus 54.8; prior 55.5) at 10:00 ET, and the March Fed Beige Book at 14:00 ET.
Nasdaq Composite -3.2% YTD
S&P 500 -7.0% YTD
Dow Jones Industrial Average -9.2% YTD
Russell 2000 -10.9% YTD
Market Snapshot
Dow 25917.41 -785.91 (-2.94%)
Nasdaq 8684.09 -268.07 (-2.99%)
SP 500 3003.37 -86.86 (-2.81%)
10-yr Note +24/32 1.010
NYSE Adv 922 Dec 1765 Vol 1.65 bln
Nasdaq Adv 960 Dec 2241 Vol 4.29 bln
Industry Watch
Strong: Industrials, Real Estate
Weak: Financials, Energy, Technology, Communication Services
Moving the Market
Federal Reserve makes emergency 50 bps rate cut but stocks can't hold their gains
G7 finance ministers and central bankers issue joint statement, pledging to support growth
Skid Halted
02-Mar-20 16:20 ET
Dow +1293.96 at 26703.29, Nasdaq +384.80 at 8952.17, S&P +136.01 at 3090.23
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The major averages surged on Monday with the S&P 500 (+4.6%) recording its first gain since February 19 while the Dow Jones Industrial Average (+5.1%) outperformed.
Equities started the new week on a firmly higher note even though the number of new coronavirus cases in the United States continued increasing while China reported its worst Manufacturing (35.7) and Non-Manufacturing PMI (29.6) readings in history.
China's PMI readings were much weaker than what was reported at the depth of the financial crisis, which promptly led to more calls for stimulus from the People's Bank of China. The Bank of Japan, meanwhile, offered to purchase JPY500 bln worth of JGBs. On the home front, the fed funds futures market continued pointing to expectations for a 50-basis point cut at the March 18 meeting or before.
Growing stimulus hopes contributed to another day of gains in the Treasury market, pressuring the 10-yr yield to a fresh record low (1.059%) in morning trade. Treasuries finished the day near their starting levels with the 10-yr yield down four basis points to 1.09%.
All eleven sectors finished the day in positive territory with nine groups climbing at least 3.0%. Countercyclical sectors like utilities (+5.9%), consumer staples (+5.5%), and real estate (+5.1%) outperformed throughout the day while the top-weighted technology sector (+5.7%) also made a significant contribution to the Monday advance.
The utilities sector returned into positive territory for Q1 (+0.9%) while consumer staples rallied behind Costco (COST 309.14, +28.00, +10.0%). The wholesale retailer spiked off a six-month low after Cleveland Research upgraded the stock to Buy after reports of very strong store traffic over the weekend. Costco will report its Q2 results on Thursday. Clorox (CLX 172.01, +12.59, +7.9%) made for another notable outperformer in the staples sector, rebounding from Friday's sharp loss.
On the cyclical side, technology (+5.7%) had a very good showing even though chipmakers lagged. The PHLX Semiconductor Index still jumped 3.5%, but most components finished behind the broader market. However, that underperformance was overshadowed by a formidable showing from large sector components. Apple (AAPL 298.81, +25.45, +9.3%) surged nearly 10.0% to levels from Tuesday. The stock was upgraded to Outperform at Oppenheimer.
Today's rally overshadowed continued weakness among transport stocks. The Dow Jones Transportation Average (+0.9%) was down for the bulk of the session, but a late rally helped the group turn positive. However, airlines like JetBlue Airways (JBLU 15.57, -0.21, -1.3%), American Airlines (AAL 18.86, -0.19, -1.0%), and United Airlines (UAL 61.26, -0.33, -0.5%) remained weak on expectations for more coronavirus-related disruptions to travel.
Similarly, cruise operators like Carnival (CCL 33.06, -0.40, -1.2%) and Norwegian Cruise Line Holdings (NCLH 35.59, -1.67, -4.5%) saw continued pressure after Japanese cruise operator Luminous Cruise filed for bankruptcy due to a collapse in demand. Royal Caribbean (RCL 80.56, +0.15, +0.2%) spent the bulk of the session in the red but turned positive in the late afternoon.
Reviewing today's economic data:
The ISM Manufacturing Index for February managed to eke out an expansion reading at 50.1 (Briefing.com consensus 50.5), but that was weaker than expected and down from 50.9 in January. The dividing line between growth and contraction is 50.0.
The key takeaway from the report is that there were noted concerns in respondents' commentary about the negative impact of the coronavirus, which is telling because the virus has continued to spread globally since the report was compiled, implying there is an increased risk of the index falling below 50.0 in March.
Total construction spending increased 1.8% m/m in January (Briefing.com consensus +0.7%) on the heels of an upwardly revised 0.2% increase (from -0.2%) in December. Residential spending was up 2.0% m/m and nonresidential spending was up 1.6% m/m.
The key takeaway from the report is that January marked the largest m/m increase in construction spending since February 2018, bolstered by continued strength in residential spending.
February auto and truck sales will be reported throughout Tuesday.
Nasdaq Composite -0.2% YTD
S&P 500 -4.4% YTD
Dow Jones Industrial Average -6.4% YTD
Russell 2000 -9.0% YTD
Market Snapshot
Dow 26703.29 +1293.96 (5.09%)
Nasdaq 8952.17 +384.80 (4.49%)
SP 500 3090.23 +136.01 (4.60%)
10-yr Note -8/32 1.088
NYSE Adv 2156 Dec 500 Vol 1.71 bln
Nasdaq Adv 2346 Dec 916 Vol 4.18 bln
Industry Watch
Strong: Consumer Staples, Real Estate, Utilities, Technology
Weak: Energy, Industrials, Communication Services
Moving the Market
Growing stimulus hopes fuel rebound in equities
China reported weakest Manufacturing PMI and Non-Manufacturing PMI readings on record
Eyeing Midday Highs
02-Mar-20 15:25 ET
Dow +817.90 at 26227.23, Nasdaq +213.11 at 8780.48, S&P +76.99 at 3031.21
[BRIEFING.COM] The major averages are trying to revisit their session highs with the S&P 500 (+2.6%) trading about ten points below its best level of the day. The Dow (+3.2%) continues trading ahead of the S&P 500 while the Russell 2000 (+1.0%) remains behind.
Barring a late swoon, the stock market is on track to end the day with solid gains while Treasuries already settled near their best levels of the day, sending the 10-yr yield lower by four basis points to 1.09%.
Commodities also had a good showing today with WTI crude climbing $1.99, or 4.4%, to $46.79/bbl. Crude oil rallied after touching its lowest level since December 2018 in overnight trade.
Down Week Ends in Volatile Fashion
28-Feb-20 16:15 ET
Dow -357.28 at 25409.33, Nasdaq +0.89 at 8567.37, S&P -24.54 at 2954.22
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market put up a bit of a fight on Friday, but when the dust settled, it was still the worst week for equities since late 2008, as the S&P 500 (-0.8%) surrendered 11.5% since last Friday.
The benchmark index recorded its seventh consecutive day of losses, falling to its lowest level since early October as coronavirus-related fears kept participants on edge. Today's action saw a sharply lower start, followed by an intraday churn as the market attempted a rebound after more than a week of losses.
The intraday rebound was fueled by relative strength in semiconductor stocks, but that strength was fleeting. The PHLX Semiconductor Index started the day with a 3.8% loss, flashed a 2.9% gain in late morning trade, returned to its flat line in the afternoon, but rallied during the final minutes of trade to end higher by 2.2%. The final push helped the Nasdaq inch into positive territory by the close.
Various U.S. officials offered reassurances throughout the day, but their comments did little to dispel the uncertainty associated with a disease that has a long incubation period and a seemingly high propensity to spread. The World Health Organization, for its part, raised its risk assessment of COVID-19 to "very high."
Afternoon action saw the release of the following statement from Fed Chairman Jay Powell: "The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy."
Besides the mention of the coronavirus, the statement was essentially a carbon copy of comments that Fed Chairman Jay Powell has been making throughout his tenure. The softly worded statement was particularly underwhelming because it was drowned out by a screaming bond market. The 10-yr yield fell another 17 basis points to a fresh record low of 1.13% while the 30-yr yield slid 11 basis points to 1.67%. Up front, the 2-yr yield fell 22 basis points to 0.88%. Thanks to these moves, the day ended with the fed funds futures market pointing to a 96.0% implied likelihood of a 50-basis point rate cut in March, followed by a 74.0% implied probability of another 25-basis point rate cut in April.
Eight out of eleven sectors ended the day in negative territory with losses ranging from 0.8% (consumer discretionary) to 3.3% (utilities). Interestingly, the utilities sector was the day's weakest performer, suggesting a strong desire to raise cash. That is also the likely reason behind a sharp drop in prices of metals. Gold fell 4.5% while palladium got decimated after surging 45.9% for Q1 going into today.
AES Corporation (AES 16.73, -1.56, -8.5%) was the weakest performer in the S&P 500 despite beating EPS estimates. Conversely, Cimarex (XEC 33.05, +2.40, +7.8%) was the top S&P 500 performer as the energy sector (+1.3%) displayed relative strength.
There was continued confusion related to the provider of videoconferencing software Zoom Video (ZM 105.00, -8.55, -7.5%). The stock fell sharply while shares of defunct company Zoom Technologies (ZOOM 6.75, +1.25, +22.7%) were up more than 63.0% before pulling back. The stock surged more than 140.0% this week.
The CBOE Volatility Index (VIX 39.98, +0.82, +2.1%) was up more than ten points at its highest point, but returned to little changed in the late afternoon.
Today's trading volume was well above average as 2.5 billion shares changed hands at the NYSE floor.
Reviewing today's economic data:
Personal income in January was up a stronger than expected 0.6% (Briefing.com consensus 0.4%), personal spending was up a weaker than expected 0.2% (Briefing.com consensus 0.3%), the PCE Price Index and core PCE Price Index, which excludes food and energy, were both up 0.1% when each was expected to be up 0.2%. On a yr/yr basis, the PCE Price Index was up 1.7%, versus 1.5% in December, and the core PCE Price Index was up 1.6%, versus 1.5% in December.
The key takeaway from the report is that it continues to show subdued inflation pressure, which might mean something for the Fed if it is worried about demand destruction in coming months, like the capital markets seem to be, due to the coronavirus.
The University of Michigan Index of Consumer Sentiment for February was revised to 101.0 (Briefing.com consensus 100.8) from the preliminary reading of 100.9. The final reading was close to matching the 101.4 expansion peak seen in March 2018.
The key takeaway from the report is that the coronavirus issue had still not permeated the consumer's mindset, although mentions of the virus were picking up as the month was drawing to a close and reporting on the issue was increasing.
The Chicago PMI increased to 49.0 in February from 42.9 in January.
The advance goods trade deficit totaled $65.50 bln in January after a $68.7 bln deficit in December.
Advance retail inventories increased 0.3%% in January after increasing 0.1% in December.
Advance wholesale inventories decreased 0.2% in January after decreasing 0.3% in December.
Monday's economic data will be limited to the 10:00 ET release of January Construction Spending (Briefing.com consensus 0.7%; prior -0.2%) and the February ISM Manufacturing Index (Briefing.com consensus 50.3; prior 50.9).
Nasdaq Composite -10.5% YTD
S&P 500 -11.5% YTD
Dow Jones Industrial Average -12.4% YTD
Russell 2000 -12.7% YTD
Market Snapshot
Dow 25409.33 -357.28 (-1.39%)
Nasdaq 8567.37 +0.89 (0.01%)
SP 500 2954.22 -24.54 (-0.82%)
10-yr Note +1 6/32 1.127
NYSE Adv 699 Dec 1899 Vol 2.46 bln
Nasdaq Adv 1182 Dec 2084 Vol 5.25 bln
Industry Watch
Strong: Technology, Energy
Weak: Utilities, Financials, Consumer Staples, Health Care, Materials
Moving the Market
Coronavirus-related fears remain in place, but stocks try to bounce
10-yr yield and 30-yr yield hit fresh record lows
Crude Oil Nears 2018 Low
28-Feb-20 15:25 ET
Dow -737.69 at 25028.92, Nasdaq -142.69 at 8423.83, S&P -69.77 at 2908.99
[BRIEFING.COM] The S&P 500 remains lower by 2.3% with 30 minutes remaining in the session. The benchmark index is currently down 12.6% for the week.
The energy sector (+0.1%) is hanging onto a slim gain at this juncture while technology (-1.1%) is back in the red after a pullback in chipmaker stocks. The PHLX Semiconductor Index, however, remains higher by 0.2%.
In commodities, WTI crude ended today's pit session lower by $2.44, or 5.2%, at $44.80/bbl. The energy component surrendered $8.54, or 16.0%, this week, falling to levels from late 2018 with the 2018 low looming at $42.36/bbl.