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Stock market rises 1% in broad-based advance
19-Aug-19 16:15 ET
Dow +249.78 at 26135.77, Nasdaq +106.82 at 8002.83, S&P +34.97 at 2923.65
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 rose 1.2% on Monday in a broad-based advance that extended its rebound rally to a third day. The Nasdaq Composite (+1.4%), Dow Jones Industrial Average (+1.0%), and Russell 2000 (+1.0%) also advanced at least 1.0%.
Monday's session was much like Friday's in that the market quickly jumped out to a big lead following another round of positive headlines. More reports surfaced about stimulus plans in China and Germany, which helped kindle some curiosity about the Fed's annual Jackson Hole Summit on Thursday and Friday. In addition, the U.S. granted Huawei another 90 days to continue buying supplies from U.S. companies.
None of the news, however, really provided the market anything "new" or surprising. Perhaps the calm that flowed from the absence of negative news and economic data helped the market reset from a perceived short-term oversold condition.
All 11 S&P 500 sectors posted decent gains on Monday. Seven sectors rose at least 1.0%, including a 2.1% gain in the energy sector amid higher oil prices ($56.00/bbl, +$1.11, +2.0%). Noticeable gains in the mega-cap stocks provided strong support for the information technology (+1.6%), communication services (+1.4%), and consumer discretionary (+1.3%) sectors.
Apple (AAPL 210.35, +3.85, +1.9%) was one of those mega-cap outperformers following a meeting between Apple CEO Tim Cook and President Trump over the weekend. President Trump said Mr. Cook presented a "compelling argument" for how tariffs would make it harder for Apple to compete against foreign competitors. Apple shares rose nearly 2%.
Estee Lauder (EL 201.65, +22.43) was another standout, rising 12.5% after the company beat top and bottom-line estimates and provided upbeat guidance for the remainder of its fiscal year.
U.S. Treasuries pulled back from a lengthy advance amid the positive disposition in equities. The 2-yr yield and the 10-yr yield increased six basis points each to 1.53% and 1.60%, respectively. The U.S. Dollar Index advanced 0.3% to 98.38.
Investors did not receive any notable economic data on Monday and will not receive any until Wednesday.
Nasdaq Composite +20.6% YTD
S&P 500 +16.6% YTD
Dow Jones Industrial Average +12.0% YTD
Russell 2000 +11.9% YTD
Wall Street closes volatile week on higher note
16-Aug-19 16:15 ET
Dow +306.62 at 25885.99, Nasdaq +129.38 at 7896.01, S&P +41.08 at 2888.68
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market finished decisively higher on this options expiration Friday. A buy-the-dip mindset helped boost the S&P 500 (+1.4%), Dow Jones Industrial Average (+1.2%), and Nasdaq Composite (+1.7%) each over 1.0%. The Russell 2000 increased 2.2%.
The market jumped out of the gate amid several positive considerations that helped investors return to equities after a volatile week. Some of those included an understanding that the U.S. consumer is still in good shape, President Trump declaring that he will have a call with President Xi soon (no specific date was mentioned), and other governments continuing to signal efforts to stimulate growth.
Given the 3% stock market sell-off earlier this week, and the lack of bad news today, conditions may have also been primed for a bounce. All 11 S&P 500 sectors finished higher with most of the leadership concentrated among the cyclical sectors, which were hit the hardest this week.
Nine sectors increased by at least 1.0%, including near 2.0% gains in the industrials (+1.9%), information technology (+1.9%), and financials (+1.9%) sectors. The real estate (+0.6%) and utilities (+0.4%) sectors rose modestly.
Industrial components Deere & Company (DE 149.23, +5.52, +3.8%) and General Electric (GE 8.79, +0.78, +9.7%) greatly benefited from a buy-the-dip mindset. Deere missed earnings estimates and lowered its full-year guidance, which sent shares down nearly 4% prior to the open, but shares still finished higher. GE, meanwhile, bounced back from yesterday's 11% drop that followed allegations of accounting fraud.
High-beta groups like the Dow Jones Transportation Average (+2.1%), the Philadelphia Semiconductor Index (+2.8%), and the iShares Nasdaq Biotechnology ETF (IBB 104.97, +2.29, +2.2%) each advanced over 2%. The semiconductor space was boosted by a positive reaction to better-than-expected earnings results from NVIDIA (NVDA 159.56, +10.79, +7.3%).
Despite the rally in equities, demand for U.S. Treasuries held firm amid lingering growth concerns. The 2-yr yield declined two basis points to 1.47%, and the 10-yr yield increased one basis point to 1.54%. The U.S. Dollar Index was unchanged at 98.18. WTI crude increased 0.5% to $54.89/bbl.
Reviewing Friday's economic data, which including the Housing Starts and Building Permits report for July and the preliminary August reading for the University of Michigan Index of Consumer Sentiment:
Total housing starts declined 4.0% m/m to a seasonally adjusted annual rate of 1.191 million units (Briefing.com consensus 1.245 million), although single-family starts rose 1.3% m/m to 876,000. Total building permits increased 8.4% m/m to 1.336 million (Briefing.com consensus 1.260 million), driven almost entirely by a 24.8% increase in permits for dwellings with five or more units. Single-family permits were up 1.8% to 838,000.
The key takeaway from the report is that the supply of new single-family homes remains constrained, which should continue to put a damper on overall housing sales due to supply/price constraints.
The preliminary University of Michigan Consumer Sentiment report for August checked in at 92.1 (Briefing.com consensus 97.7) versus the final reading of 98.4 for July. The August number was the lowest reading since January.
The key takeaway from the report was the finding that apprehension about the economic outlook increased with the Fed's rate cut, which is something that might influence consumers to curtail their discretionary spending activity.
Investors will not receive any notable economic data on Monday.
Nasdaq Composite +19.0% YTD
S&P 500 +15.2% YTD
Dow Jones Industrial Average +11.0% YTD
Russell 2000 +10.8% YTD
Stock market closes mixed, supported by strength in U.S. consumer
15-Aug-19 16:15 ET
Dow +99.97 at 25579.37, Nasdaq -7.32 at 7766.63, S&P +7.00 at 2847.60
https://www.briefing.com/investor/markets/stock-market-update/2019/8/15/stock-market-closes-mixed-supported-by-strength-in-us-consumer.htm
[BRIEFING.COM] The stock market finished mixed on Thursday, as investors weighed the resiliency of the U.S. consumer against familiar growth concerns. The S&P 500 (+0.3%) and Dow Jones Industrial Average (+0.4%) finished higher, while the Nasdaq Composite (-0.1%) and Russell 2000 (-0.4%) finished lower.
The market has been on edge this month amid the volatility and recessionary fears, which have been heightened by weakening global data and a trade dispute with China. On Thursday, China added to those worries after it threatened to retaliate against U.S. tariffs on Chinese imports but said it hopes the U.S. can meet halfway in trade talks.
U.S. economic data, meanwhile, helped placate some growth concerns. The big report today, Retail Sales for July, showed retail sales increase 0.7% m/m last month (Briefing.com consensus 0.3%). The data coincided with upbeat results and guidance from Walmart (WMT 112.69, +6.49, +6.1%), which corroborated the view that the U.S. consumer could be the key to ward off a recession.
Still, there wasn't a lot of conviction in today's action with the market swaying between gains and losses. Leadership was concentrated among the defensive-oriented sectors -- consumer staples (+1.5%), real estate (+1.3%), and utilities (+1.3%) -- which benefited from Walmart's report and another drop in U.S. Treasury yields.
Today's laggards included the S&P 500 cyclical sectors. The energy sector (-0.5%) fell alongside oil prices ($54.38/bbl, -$0.77, -1.4%). The industrials sector (-0.2%) was subject to a 11.3% drop in shares of General Electric (GE 8.01, -1.02) after it was accused of accounting fraud. Information technology (-0.2%) was weighed down by disappointing guidance from Cisco Systems (CSCO 46.25, -4.36, -8.6%).
The U.S. Treasury market, meanwhile, continued to draw in buyers. Yields took a sharp leg lower during the day following some central bank news: (1) The Wall Street Journal reported that the European Central Bank is preparing a "very strong package" of stimulus measures to boost the eurozone economy and (2) the Mexican Central Bank lowered its key lending rate for the first time in over five years.
The 2-yr yield finished nine basis points lower at 1.49%, and the 10-yr yield finished five basis points lower at 1.53%. The 30-yr yield fell below 2.00%, finishing five basis points lower at 1.98%. The U.S. Dollar Index increased 0.1% to 98.10.
Reviewing Thursday's big batch of economic data:
Retail sales increased 0.7% m/m in July (Briefing.com consensus 0.3%) and were up 1.0%, excluding autos (Briefing.com consensus 0.3%).
The key takeaway from the report is that it offered a clear reminder that the U.S. consumer is still in good shape, which is key to fending off a recession.
Initial claims for the week ending August 10 increased by 9,000 to 220,000 (Briefing.com consensus 215,000). Continuing claims for the week ending August 3 jumped by 39,000 to 1.726 million.
The key takeaway from the report is that there wasn't any meaningful shift in the underlying trend (which is solid) for initial claims, as the four-week moving average moved up just 1,000 to a low 213,750.
Nonfarm business sector productivity increased 2.3% in the second quarter (Briefing.com consensus 1.3%) after increasing a revised 3.5% in Q1 (from 3.4%), according to the preliminary reading. Unit labor costs increased 2.4% in the second quarter (Briefing.com consensus 1.6%) after increasing a revised 5.5% (from -1.6%) in Q1.
The key takeaway from the report is the improved trend in productivity, which was up 1.8% from the second quarter of 2018 to the second quarter of 2019 versus the annual average of 1.3% for 2018 and 2017, and 0.3% in 2016.
Industrial production decreased 0.2% in July (Briefing.com consensus 0.1%) after increasing a revised 0.2% (from 0.0%) in June. The total industry capacity utilization rate fell to 77.5% (Briefing.com consensus 77.8%) from a revised 77.8% (from 77.9%) in June.
The key takeaway from the report is that the July decrease in industrial production has reduced the yr/yr growth rate to just 0.5%.
The Empire State Manufacturing Survey for August increased to 4.8 (Briefing.com consensus 1.1) from the prior month's reading of 4.3.
The Philadelphia Fed Index for August came in at 16.8 (Briefing.com consensus 10.0), below the 21.8 reading in July.
The NAHB Housing Market Index increased to 66 in August from 65 in July.
Looking ahead, investors will receive Housing Starts and Building Permits for July and the preliminary University of Michigan Index of Consumer Sentiment for August on Friday.
Nasdaq Composite +17.1% YTD
S&P 500 +13.6% YTD
Dow Jones Industrial Average +9.7% YTD
Russell 2000 +8.4% YTD
Stock market sells off on recession worries
14-Aug-19 16:20 ET
Dow -800.49 at 25479.40, Nasdaq -242.42 at 7773.95, S&P -85.72 at 2840.60
https://www.briefing.com/investor/markets/stock-market-update/2019/8/14/stock-market-sells-off-on-recession-worries.htm
[BRIEFING.COM] Each of the major U.S. indices lost around 3.0% on Wednesday, as weak global data and a recessionary signal in the U.S. Treasury market sent stocks reeling. Broad-based selling left both S&P 500 and Russell 2000 down 2.9%. The Dow Jones Industrial Average lost 3.1%, and the Nasdaq Composite lost 3.0%.
The stock market began the day sharply lower, giving back a bulk of yesterday's advance, after data out of China and Germany continued to weaken. China reported its slowest industrial production growth since 2002, and Germany reported a 0.1% qtr/qtr decline in Q2 GDP. Understandably, investors rushed to safe-haven assets such as gold ($1527.80, +$13.70, +0.9%) and U.S. Treasuries, while equities steadily declined throughout the day.
In turn, the yield on the 10-yr note fell below the yield on the 2-yr note for the first time since 2007, representing an inversion that has preceded each recession since 1980. The average length of time between the first inversion and the start of each recession since 1980 has averaged 18 months, with the range being as little as ten months to as many as two years.
Despite this historical time-cushion, it was risk-off on Wall Street with all 11 S&P 500 sectors finishing lower. The energy (-4.1%) and financials (-3.6%) sectors led the broader retreat amid steep declines in oil prices ($55.01/bbl, -$2.03, -3.6%) and U.S. Treasury yields. The utilities sector (-0.9%) was the only sector that didn't finish lower by at least 1.0%.
The 2-yr yield fell nine basis points to 1.58%, and the 10-yr yield fell ten basis points to 1.58%. Interestingly, the 30-yr yield hit a record low at 2.02% before finishing the session down 11 basis points at 2.03%. The U.S. Dollar Index held firm, advancing 0.2% to 98.04.
It should be noted that the 2s-10s yield spread did not remain inverted during the session. Still, the yield curve had been steadily flattening all year and investors weren't given any reason today to expect a change of course. The yield-curve flattening undercut shares of Citigroup (C 61.41, -3.42, -5.3%), Bank of America (BAC 26.42, -1.30, -4.7%), and JPMorgan Chase (JPM 104.80, -4.54, -4.2%).
Separately, Macy's (M 16.80, -2.56, -13.2%) provided disappointing earnings and guidance, which sent shares down 13.2% and put additional pressure on the SPDR S&P Retail ETF (XRT 38.42, -1.68, -4.2%).
Reviewing Wednesday's economic data, which included Import and Export Prices for July and the weekly MBA Mortgage Applications Index:
Import prices rose 0.2% m/m in July, but declined 0.1% excluding fuel. On a yr/yr basis, all import prices were down 1.8%, versus up 4.8% for the 12 months ending in July 2018, while nonfuel import prices declined 1.3% versus a 1.4% increase for the 12 months ending in July 2018.
Export prices were up 0.2% m/m in July. Excluding agricultural exports, prices were also up 0.2%. On a yr/yr basis, all export prices were down 0.9%, versus up 4.3% for the 12 months ending in July 2018, while nonagricultural export prices were down 1.5%, versus up 5.0% for the 12 months ending in July 2018.
The key takeaway from the report is that it doesn't show any inflation, which stands in contrast to the Consumer Price Index for July. Accordingly, it will only serve to confuse the market's perspective on the Fed's read of inflation trends.
The weekly MBA Mortgage Applications Index spiked 21.7% following a 5.3% increase in the prior week.
Investors will receive the following economic data on Thursday: Retail Sales for July, Industrial Production and Capacity Utilization for July, the Empire State Manufacturing Survey for August, the Philadelphia Fed Index for August, the weekly Initial and Continuing Claims report, the preliminary Productivity and Unit Labor Costs for the second quarter, Business Inventories for June, and Net Long-Term TIC Flows for June.
Tariff delay sparks broad-based advanced, Apple shares rise
13-Aug-19 16:20 ET
Dow +372.54 at 26268.98, Nasdaq +152.95 at 8016.37, S&P +43.23 at 2926.32
https://www.briefing.com/investor/markets/stock-market-update/2019/8/13/tariff-delay-sparks-broadbased-advanced-apple-shares-rise.htm
[BRIEFING.COM] U.S. stocks rallied on Tuesday after the White House announced that it will delay the 10% tariff rate for some items imported from China, including cell phones and laptops, until Dec. 15. Apple (AAPL 208.97, +8.49, +4.2%) led the broad-based advance and contributed to the solid gains in the S&P 500 (+1.5%), Dow Jones Industrial Average (+1.4%), and Nasdaq Composite (+2.0%). The Russell 2000 increased 1.1%.
Originally, the 10% tariff rate on $300 billion of mostly consumer goods was set to go into effect Sept. 1. Most products will still be taxed on that date, but the decision to delay some big-ticket items followed a "public comment and hearing process," according to the USTR. Other items will be also removed from the tariff list based on "health, safety, and national security" factors.
President Trump told reporters he wanted to delay the tariffs so consumers would not be hurt during the Christmas shopping season and said he had a very productive call with China. On a related note, China's Ministry of Commerce indicated that trade talks will resume over the phone within the next two weeks.
In turn, the upbeat news contributed to gains in all 11 S&P 500 sectors and a 4% rally in oil prices ($57.04/bbl, +$2.23, +4.1%). Nine sectors advanced at least 1.0%, led by the information technology (+2.5%), consumer discretionary (+1.7%), and communication services (+1.5%) sectors. The Philadelphia Semiconductor Index climbed 3.0%.
Although structural trade issues remain, the news did serve as a temporary relief to the market that had been grappling with geopolitical uncertainty, growth concerns, weakness in global equities, and declining U.S. Treasury yields.
For instance, prior to the tariff news, attention remained heavily centered on the Hong Kong protests that continued to escalate. Riot police confronted protesters at the city's airport after flights were canceled for the second consecutive day on Tuesday.
Shorter-dated U.S. Treasuries sold off, driving yields higher in another curve-flattening trade. The 2-yr yield increased nine basis points to 1.67%, and the 10-yr yield increased four basis points to 1.68%. The general risk-on mood helped the market overlook the continued compression in yields. The U.S. Dollar Index advanced 0.5% to 97.82.
Reviewing Tuesday's economic data, which included the Consumer Price Index for July and the NFIB Small Business Optimism Index for July:
Total CPI increased 0.3% m/m in July, as expected, while core CPI, which excludes food and energy, also increased 0.3% (Briefing.com consensus 0.2%) for the second straight month. Those readings left total CPI up 1.8% yr/yr, versus 1.6% in June, and core CPI up 2.2% yr/yr, versus 2.1% in June.
The key takeaway from the report is that it muddles the monetary policy outlook. The year-over-year readings are not exactly "rate-cutting" material, but with everything else going on, the market will be left to conclude that another rate cut is likely since the Fed will want to ensure that everything else going on doesn't lead to a caustic slide in inflation expectations.
The NFIB Small Business Optimism Index for July increased to 104.7 from 103.3 in June.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index, and Export and Import Prices for July on Wednesday.
Nasdaq Composite +20.8% YTD
S&P 500 +16.7% YTD
Dow Jones Industrial Average +12.7% YTD
Russell 2000 +12.0% YTD
Stock market loses over 1%, while yields decline further
12-Aug-19 16:15 ET
Dow -391.00 at 25896.44, Nasdaq -95.73 at 7863.42, S&P -36.21 at 2882.44
https://www.briefing.com/investor/markets/stock-market-update/2019/8/12/stock-market-loses-over-1-while-yields-decline-further.htm
[BRIEFING.COM] The stock market fell more than 1% on Monday, as uncertainties about the global economy continued to push investors away from risk assets and into safe-haven assets like U.S. Treasuries and gold. The S&P 500 fell 1.2%, which was comparable to the declines in the Nasdaq Composite (-1.2%) and Russell 2000 (-1.2%). The Dow Jones Industrial Average lost 1.5%.
U.S. corporate and economic news was sparse on Monday, which helped attention focus on the government protests in Hong Kong, the political instability in Italy and Argentina, and the lack of improvement in U.S.-China trade relations. Economists from Goldman Sachs added to the sour mood, stating that they are not expecting a U.S.-China trade deal before the 2020 presidential election.
In other words, Monday featured plenty of negative-minded speculation, although it was understandable given the amount of negative developments around the world and the lack of good news. Perhaps the most startling development in the capital markets was the persistent decline, and compression, in U.S. Treasury yields.
This compression in yields not only hit investor sentiment but was also affected the S&P 500 financials sector (-1.9%), which led all 11 S&P 500 sectors in losses. Banks typically rely on healthy net interest margins to boost profit and facilitate lending activity. The other rate-sensitive sectors -- real estate (-0.3%) and utilities (-0.3%) -- outperformed but still finished lower.
The spread between the 2-yr and 10-yr yields narrowed to six basis points, as demand for longer-dated tenors continued to climb amid growth concerns. The 2-yr yield fell five basis points to 1.58%, and the 10-yr yield fell ten basis points to 1.64%. The U.S. Dollar Index declined 0.1% to 97.43.
An inversion of the 2-10 spread is widely viewed as a recession indicator, although an inversion does not necessarily predict one.
In commodities, gold futures settled 0.5%, or $7.00, higher at $1505.30/oz to extend its yearly advance to 14.7%. For comparison, the S&P 500 is up 15.0% this year. Interestingly, WTI crude settled 0.4%, or $0.20, higher to $54.81/bbl despite the economic growth concerns.
Separately, shares of Amgen (AMGN 205.78, +9.53, +4.9%) saw continued strength after it won a patent case for Enbrel on Friday.
Monday's economic data was limited to the Treasury Budget for July:
The Treasury Budget for July showed a deficit of $119.70 bln (Briefing.com consensus -$100.00 bln) versus a deficit of $76.87 bln for the same period one year ago. The Treasury Budget is not seasonally adjusted, so the July deficit cannot be compared to the $8.50 bln deficit in June.
The fiscal year-to-date deficit is $866.81 bln versus a deficit of $683.96 bln in the same period a year ago. The budget deficit over the last 12 months is $961.8 bln, versus $919 bln for the 12 months ending in June.
Looking ahead, investors will receive the Consumer Price Index for July on Tuesday.
Nasdaq Composite +18.5% YTD
S&P 500 +15.0% YTD
Dow Jones Industrial Average +11.0% YTD
Russell 2000 +10.8% YTD
Stock market caps volatile week on lower note
09-Aug-19 16:15 ET
Dow -90.75 at 26287.44, Nasdaq -80.02 at 7959.15, S&P -19.44 at 2918.65
https://www.briefing.com/investor/markets/stock-market-update/2019/8/9/stock-market-caps-volatile-week-on-lower-note.htm
[BRIEFING.COM] The stock market wrapped up a volatile week on lower note, leaving the S&P 500 down 0.7% on Friday. Familiar trade concerns appeared to hinder buying conviction after a three-day advance in the benchmark index.
The Dow Jones Industrial Average lost 0.3%, the Nasdaq Composite lost 1.0%, and the Russell 2000 lost 1.3%.
President Trump seemingly fed into the nagging trade angst when he told reporters that the U.S. will not be doing business with Huawei and that September trade talks could get canceled. None of these statements really surprised the market, but the prospect of U.S.-China relations further deteriorating kept some buyers sidelined on Friday.
Eight of the 11 S&P 500 sectors finished lower, led by the energy (-1.3%) and information technology (-1.3%) sectors. Energy stocks fell despite the sharp increase in oil prices ($54.61/bbl, +$2.09, +4.0%), while the tech sector was pressured by shares of semiconductor companies, many of which derive substantial revenue from China. The Philadelphia Semiconductor Index fell 1.8%.
Conversely, the defensive-oriented health care (+0.2%), real estate (+0.1%), and utilities (+0.04%) sectors were the lone sectors that finished higher.
Uber (UBER 40.05, -2.92) shares fell 6.8% after the company reported a wider-than-expected $5.2 billion quarterly loss. Revenue also came up short of estimates, but today's decline simply retraced much of yesterday's 8% rally.
In other corporate news, Amgen (AMGN 196.25, +11.02) shares spiked 6.0% following a positive ruling regarding its Enbrel business. DXC Technology (DXC 35.91, -15.74, -30.5%) plunged over 30% after it cut its FY20 outlook, while Dropbox (DBX 18.71, -2.75) fell 12.8% despite providing decent results and guidance.
U.S. Treasuries finished slightly lower, pushing yields higher across the curve. The 2-yr yield and the 10-yr yield increased two basis points each to 1.63% and 1.73%, respectively. The U.S. Dollar Index declined 0.1% to 97.54.
Reviewing Friday's lone economic report, the Producer Price Index for July:
The index for final demand increased 0.2% m/m in July (Briefing.com consensus +0.2%) while the index for final demand, excluding food and energy, decreased 0.1% m/m (Briefing.com consensus +0.2%). The m/m readings left the index for final demand up 1.7% yr/yr, unchanged from June. The index remains at its lowest level since January 2017. Core PPI was up 2.1% yr/yr, down from 2.3% in June.
The key takeaway from the report is that inflationary pressure remains muted.
Looking ahead, Monday's economic data will be limited to the Treasury Budget for July.
Nasdaq Composite +20.0% YTD
S&P 500 +16.4% YTD
Dow Jones Industrial Average +12.7% YTD
Russell 2000 +12.2% YTD
Green day on Wall Street as investors embrace risk
08-Aug-19 16:20 ET
Dow +371.12 at 26378.19, Nasdaq +176.33 at 8039.17, S&P +54.11 at 2938.09
https://www.briefing.com/investor/markets/stock-market-update/2019/8/8/green-day-on-wall-street-as-investors-embrace-risk.htm
[BRIEFING.COM] The stock market finished decisively in the green on Thursday, as trade angst subsided and investors embraced a risk-on mindset. The S&P 500 advanced 1.9%, which extended its two-day comeback to 112 points, or 4.0%, from its session low on Wednesday.
The Dow Jones Industrial Average increased 1.4%, the Nasdaq Composite increased 2.2%, and the Russell 2000 increased 2.1%.
Thursday's positive disposition ostensibly formed overnight after China reported a surprise yr/yr increase in July exports while holding its yuan firm, which again signaled goodwill in trade relations. Today's rally, however, appeared to be more a continuation from yesterday's big intraday reversal that suggested the recent sharp sell-off may have been excessive.
Interestingly, the S&P 500 traded just below its 50-day moving average (2934) for most of the afternoon before finally breaking above the key technical level late in the session. The benchmark index held above the level on a closing basis.
All 11 S&P 500 sectors finished higher by at least 1.0%. The energy sector (+2.9%) led the advance as oil prices ($52.52/bbl, +$1.38, +2.7%) rebounded, followed by the information technology (+2.4%), communication services (+2.2%), and consumer discretionary (+2.0%) sectors.
Advanced Micro Devices (AMD 33.92, +4.73, +16.2%) led the Philadelphia Semiconductor Index (+2.7%) higher after it unveiled its well-received server CPUs that Google and Twitter will reportedly use. Broadcom (AVGO 270.98, +0.93, +0.3%) struggled to participate in the chip rally amid news that it is close to purchasing Symantec's (SYMC 22.92, +2.51, +12.3%) enterprise business for about $10 billion
In earnings news, Booking Holdings (BKNG 1941.01, +119.45, +6.6%), Lyft (LYFT 62.10, +1.81, +3.0%), and Roku (ROKU 122.03, +21.06, +20.9%) outperformed the broader market following positive results and/or upbeat guidance. Kraft Heinz (KHC 28.22, -2.65, -8.6%) disappointed investors with its results, and its stock chart remained an eyesore for investors.
U.S. Treasuries were under noticeable selling pressure today, which sent the 10-yr yield up 11 basis points to 1.79% at one point during the session. Buyers gradually came back, ultimately leaving the benchmark yield up three basis points to 1.72%. The 2-yr yield finished also finished three basis points higher at 1.61%. The U.S. Dollar Index increased 0.1% to 97.60.
Reviewing Thursday's economic data, which included the weekly Initial and Continuing Claims report and Wholesale Inventories for June:
Initial jobless claims for the week ending August 3 decreased by 8,000 to 209,000 (Briefing.com consensus 213,000). Continuing claims for the week ending July 27 decreased by 15,000 to 1.684 mln.
The key takeaway from the report is that initial claims continue hovering near multi-decade lows.
Wholesale inventories were unchanged in June (Briefing.com consensus 0.2%) on top of an unrevised 0.4% increase in May. Wholesale sales decreased 0.3% in June after decreasing a revised 0.6% (from +0.1%) in May.
The key takeaway from the June report and the May revision is that the gap between inventory growth and sales growth is widening, which should exert some pressure on prices.
Looking ahead, investors will receive the Producer Price Index for July on Friday.
Nasdaq Composite +21.2% YTD
S&P 500 +17.2% YTD
Dow Jones Industrial Average +13.1% YTD
Russell 2000 +13.6% YTD
Stock market stages big reversal as yields stabilized
07-Aug-19 16:15 ET
Dow -22.45 at 26007.07, Nasdaq +29.56 at 7862.84, S&P +2.21 at 2883.98
https://www.briefing.com/investor/markets/stock-market-update/2019/8/7/stock-market-stages-big-reversal-as-yields-stabilized-.htm
[BRIEFING.COM] The stock market staged a big reversal on Wednesday in which the S&P 500 increased 0.1% after being down as much as 2.0% shortly after the open. A steep drop in U.S. Treasury yields contributed to the early sell-off, but selling pressure was abated soon after yields stabilized.
The Nasdaq Composite (+0.4%) also finished higher after beginning sharply lower, while the Dow Jones Industrial Average (-0.1%) and Russell 2000 (-0.1%) finished just below their flat lines.
Treasury yields have been on a steady decline since November, but a sharp acceleration that further flattened the yield curve today was startling to see. Investors piled into the safe-haven asset amid familiar growth concerns and expectations that global central banks will continue to lower rates.
Central banks from New Zealand, India, and Thailand cut interest rates sharper than expected on Wednesday with New Zealand's RBZN Governor indicating that rates may go negative. Negative rates around the world has been a phenomenon that has presumably increased interest in U.S. Treasuries.
Nevertheless, much like Tuesday's session, initial gloom and doom quickly turned into an opportunistic mindset throughout the day. Six of the 11 S&P 500 sectors finished in the green, led by solid gains in the materials (+1.3%), consumer staples (+1.2%), and real estate (+0.9%) sectors.
On the downside, the financials sector (-1.2%) underperformed amid some yield-curve flattening, which isn't too conducive for lending activity should it continue. The energy sector (-0.8%) fell alongside oil prices ($51.14/bbl, -$2.70, -5.0%) that were pressured by bearish inventory data and growth concerns.
The 2-yr yield finished three basis points lower at 1.58% after touching 1.53% at its low, and the 10-yr yield finished six basis points lower at 1.68% after touching 1.61% at its low. The U.S. Dollar Index finished flat at 97.62. Low rates and growth concerns continued to boost gold ($1505.9/oz, +$33.30, +2.3%), which at one point today provided investors a higher return than the S&P 500 this year.
In earnings news, Dow component Walt Disney (DIS 134.86, -7.01, -4.9%) fell nearly 5% after it missed top and bottom-line estimates. CVS Health (CVS 58.12, +4.03, +7.5%) and Match Group (MTCH 91.77, +17.86, +24.2%) climbed on positive results and guidance.
Reviewing Wednesday's economic data, which included the Consumer Credit report for June and the weekly MBA Mortgage Applications Index:
Consumer credit increased by $14.6 bln in June (Briefing.com consensus $16.5 bln) after increasing a revised $17.8 bln (from $17.1 bln) in May.
The key takeaway from the report is that the June increase in consumer credit was driven entirely by growth in nonrevolving credit, like auto and student loans. This marks a return to a dynamic that was seen earlier this year.
The weekly MBA Mortgage Applications Index increased 5.3% following a 1.4% decline in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report and Wholesale Inventories for June on Thursday.
Nasdaq Composite +18.5% YTD
S&P 500 +15.0% YTD
Dow Jones Industrial Average +11.5% YTD
Russell 2000 +11.3% YTD
Stock market posts worst day of 2019 after China weakens yuan
05-Aug-19 16:20 ET
Dow -767.27 at 25717.74, Nasdaq -278.03 at 7726.05, S&P -87.31 at 2844.74
https://www.briefing.com/investor/markets/stock-market-update/2019/8/5/stock-market-posts-worst-day-of-2019-after-china-weakens-yuan.htm
[BRIEFING.COM] The stock market had its worst day of 2019 with each of the major U.S. indices losing around 3% on Monday. Trade and growth concerns rattled capital markets after China devalued the yuan to its weakest level against the dollar since 2008. Broad-based selling left the S&P 500 down 3.0% for the day.
The Dow Jones Industrial Average fell 2.9%, the Nasdaq Composite fell 3.5%, and the Russell 2000 fell 3.0%.
Monday's session already began noticeably lower after China allowed the yen to weaken beyond 7 per U.S. dollar in response to President Trump's tariff threat. Global equities declined sharply, and the selling carried over into U.S. equities, which steadily declined throughout the session.
President Trump expressed his discontent on the "currency manipulation," while the People's Bank of China Governor, Yi Gang, said the central bank will not engage in competitive devaluation. China also said its companies agreed to suspend new agricultural purchases from the U.S.
It was clearly risk-off on Wall Street with all 11 S&P 500 sectors finishing with steep losses. Eight sectors finished with losses between 2.3% (health care) and 4.1% (information technology). The tech sector was pressured by shares of Apple (AAPL 193.34, -10.68, -5.2%) and semiconductor companies, many of which derive a large portion of their revenue from China. The Philadelphia Semiconductor Index dropped 4.4%.
The implied likelihood for a 50-basis points rate cut at the September FOMC meeting climbed to 23.5% versus 1.5% on Friday, according to the CME FedWatch Tool. Expectations for the Fed to step up its easing efforts amid increased risks to the economic outlook expounded the flight-to-safety in U.S. Treasuries. On a related note, all of Germany's sovereign debt yielded negative rates for the first time on Monday.
The 2-yr yield dropped 13 basis points to 1.58%, and the 10-yr yield dropped 12 basis points to 1.74%. The U.S. Dollar Index fell 0.5% to 97.58. WTI crude lost 2.0% to $54.64/bbl.
Separately, gold futures settled 1.2% higher at $1467.20/oz, further helped by weakness in the dollar and declining U.S. Treasury yields. Shares of Newmont Goldcorp (NEM 37.42, +0.51) advanced 1.4%.
Reviewing Monday's lone economic report, the ISM Non-Manufacturing Index for July:
The ISM Non-Manufacturing Index decreased to 53.7% in July (Briefing.com consensus 55.4) from 55.1% in June. The dividing line between expansion and contraction is 50.0%.
The key takeaway from the report is that it shows a continuation of a decelerating trend that has been in place since late 2018. The Non-Manufacturing Index is at its lowest level in almost three years.
Looking ahead, investors will receive the JOLTS - Job Openings report for June on Tuesday.
Nasdaq Composite +16.4% YTD
S&P 500 +13.5% YTD
Russell 2000 +10.3% YTD
Dow Jones Industrial Average +10.3% YTD
Wall Street ends week with more losses, as trade concerns overshadow jobs data
02-Aug-19 16:20 ET
Dow -98.41 at 26485.01, Nasdaq -107.05 at 8004.08, S&P -21.51 at 2932.05
https://www.briefing.com/investor/markets/stock-market-update/2019/8/2/wall-street-ends-week-with-more-losses-as-trade-concerns-overshadow-jobs-data.htm
[BRIEFING.COM] Wall Street ended Friday with more losses, as investors remained fixated on possible China tariffs and brushed aside an in-line employment report. The S&P 500 (-0.7%) and Dow Jones Industrial Average (-0.4%) finished well off session lows, while the Nasdaq Composite (-1.3%) and Russell 2000 (-1.1%) fell over 1.0%.
China promised retaliatory measures against the U.S. if President Trump follows through on his tariff threat. This didn't catch too many market participants by surprise, but the lack of positive news on Friday contributed to the follow-through selling.
Most of Friday's decline, however, took place in the first 90 minutes of action. Each of the major averages fell below their 50-day moving averages, which appeared to welcome a buy-the-dip mentality that abated the early selling pressure. The Russell 2000 was the only major U.S. index that closed below the key technical level.
The S&P 500 information technology (-1.7%) and energy (-1.3%) sectors led today's decline, with the latter unable to benefit from the rebound in oil ($55.74/bbl, +$1.75, +3.2%). The defensive-oriented real estate (+0.8%), consumer staples (+0.1%), and utilities (+0.1%) sectors were the lone sectors that finished higher.
July's Employment Situation Report didn't produce much interest. The data came mostly in-line with expectations, and some speculated whether the trade uncertainty would slow down the pace of U.S. hiring activity or wage growth. Nonfarm payrolls increased 164,000 (Briefing.com consensus 160,000), which coincided with decent wage growth and an unemployment rate that stayed near a 50-year low.
In earnings news, Dow components Chevron (CVX 120.73, -0.01, unch) and Exxon Mobil (XOM 71.75, -0.71, -1.0%) provided mixed results. Square (SQ 69.60, -11.38, -14.1%) and NetApp (NTAP 46.04, -11.67, -20.2%) issued disappointing guidance. Newell Brands (NWL 15.34, +1.91, +14.2%) and Pinterest (PINS 33.57, +5.27, +18.6%) provided upbeats results and guidance.
U.S. Treasuries continued to see increased demand, which pushed yields lower in a curve-flattening trade. The 2-yr yield declined one basis point to 1.71%, and the 10-yr yield declined four basis points to 1.86%. The U.S. Dollar Index declined 0.3% to 98.11.
Reviewing Friday's economic data, which included the July Employment Situation Report, the revised July reading for the University of Michigan Index of Consumer Sentiment, the Trade Balance report for June, and Factory Orders for June:
Job growth was decent in July, wage growth was decent, the unemployment rate stayed near a 50-year low with a slight pickup in the labor force participation rate, and there was a sizable drop in the number of long-term unemployed persons.
The key takeaway from the report is that it was a good report in aggregate, which means it didn't offer enough bad news to convince the Fed that it needs to cut the fed funds rate again in September.
The final July reading for the University of Michigan Index of Consumer Sentiment checked in at 98.4 (Briefing.com consensus 98.6) versus the preliminary reading of 98.2 and the final June reading of 98.2.
The key takeaway from the report is that the economic uncertainty and trade uncertainty that has bothered the Fed has yet to bother the consumer in a noticeably adverse way.
The trade deficit for June narrowed slightly to $55.2 billion (Briefing.com consensus -$54.6 billion) from $55.3 billion in May, as imports (-$4.6 billion) fell slightly more than exports (-$4.4 billion).
The key takeaway from a growth standpoint is that both exports and imports fell in June.
Factory orders increased 0.6% in June (Briefing.com consensus 0.8%) on the heels of downwardly revised 1.3% decline (from -0.7%) in May, which followed a 1.2% decline in April.
The key takeaway from the report is that nondefense capital goods orders, excluding aircraft -- a proxy for business spending -- were revised down to 1.5% from the preliminary report showing a 1.9% increase. Shipments of those same goods were up 0.3% versus 0.6% in the preliminary report. That will compute as a drag in the second estimate for Q2 GDP.
Looking ahead, investors will receive the ISM Non-Manufacturing index for July on Monday.
Nasdaq Composite +20.6% YTD
S&P 500 +17.0% YTD
Russell 2000 +13.7% YTD
Dow Jones Industrial Average +13.5% YTD
Stock market erases gains, closes lower after Trump announces more China tariffs
01-Aug-19 16:25 ET
Dow -280.85 at 26583.42, Nasdaq -64.30 at 8111.13, S&P -26.82 at 2953.56
https://www.briefing.com/investor/markets/stock-market-update/2019/8/1/stock-market-erases-gains-closes-lower-after-trump-announces-more-china-tariffs.htm
[BRIEFING.COM] The stock market gave up a healthy lead and finished noticeably lower on Thursday after President Trump announced a 10% tariff rate on another $300 billion of Chinese imports, effective September 1. The S&P 500 had nearly recovered all its losses from Wednesday, but renewed growth and trade concerns left the benchmark index down 0.9% for the session.
The Dow Jones Industrial Average lost 1.1%, the Nasdaq Composite lost 0.8%, and the Russell 2000 lost 1.5%.
Economic growth concerns were made most apparent in the steep drop in U.S. Treasury yields and oil prices ($53.99/bbl, -$4.39, -7.5%), both of which had already been on the decline in the wake of the Fed's rate cut yesterday. The 2-yr yield dropped 16 basis points to 1.72%, and the 10-yr yield dropped 13 basis points to 1.89%. The U.S. Dollar Index lost 0.2% to 98.36.
In turn, the lower rates and oil prices drove the broad-based selling in the S&P 500 financials (-2.3%) and energy (-2.3%) sectors. The decline in yields, however, did contribute to the gains in the utilities (+1.0%) and real estate (+0.2%) sectors.
Initially, the lower rates had presumably been the catalyzing force behind the rally in equities. That narrative was quickly upended after the tariff announcement brought back familiar trade concerns that the market had set aside during its run to record highs.
Concerns that trade tensions would undercut corporate earnings prospects were evident in the following groups: The S&P 500 industrials sector (-2.0%), which is home to many transportation companies with foreign business; Apple (AAPL 208.43, -4.61, -2.2%), which previously had some of its high-growth products except from tariffs; and the semiconductor stocks, many of which derive a large of portion of their revenue from China.
The Dow Jones Transportation Average lost 2.5%, and the Philadelphia Semiconductor Index lost 2.0%. The SPDR S&P Retail ETF (XRT 41.21, -1.38) was another laggard, losing 3.2% amid fears that strong consumer spending may be adversely affected by the tariffs.
Economic data released today certainly didn't help the mood, although some investors may have seen the results as a case for the Fed to step up its easing efforts, especially after the latest tariff threat. Specifically, the ISM Manufacturing Index for July declined to 51.2% (Briefing.com consensus 51.9%), which is its lowest level since Aug. 2016, and total construction spending for June unexpectedly declined 1.3% (Briefing.com consensus +0.4%).
Reviewing Thursday's economic data, which included the ISM Manufacturing Index for July, Construction Spending for June, and the weekly MBA Mortgage Applications Index:
The ISM Manufacturing Index for July checked in at 51.2% (Briefing.com consensus 51.9%) after crossing at 51.7% in June. The dividing line between expansion and contraction is 50.0%, so the July reading indicates slower growth in the manufacturing sector. The July reading is the lowest level since August 2016.
The key takeaway from the report is that it marked the fourth straight month of a deceleration in growth, which corroborates the view that business activity has softened for the manufacturing sector.
Total construction spending declined 1.3% in June (Briefing.com consensus +0.4%) following an upwardly revised 0.5% decline (from -0.8%) in May. This was the second straight monthly decline and the third straight year-over-year decline in construction spending, which is something that hasn't been seen since 2011.
The key takeaway from the report is that the weakness in June was spread across both private construction and public construction activity.
The latest weekly initial jobless claims count totaled 215,000, which was in-line with the Briefing.com consensus. Today's tally was above the prior week's revised count of 207,000 (from 206,000). As for continuing claims, they increased to 1.699 million from a revised count of 1.677 million (from 1.676 million).
Looking ahead, investors will receive the Employment Situation Report for July, the revised July reading for the University of Michigan Index of Consumer Sentiment, the Trade Balance report for June, and Factory Orders for June on Friday.
Nasdaq Composite +22.2% YTD
S&P 500 +17.8% YTD
Russell 2000 +15.0% YTD
Dow Jones Industrial Average +14.0% YTD
Stock market falls after Powell shoots down easing cycle hopes
31-Jul-19 16:25 ET
Dow -333.75 at 26864.27, Nasdaq -98.19 at 8175.43, S&P -32.80 at 2980.38
https://www.briefing.com/investor/markets/stock-market-update/2019/7/31/stock-market-falls-after-powell-shoots-down-easing-cycle-hopes.htm
[BRIEFING.COM] The S&P 500 fell as much as 1.8% on Wednesday after Fed Chair Powell indicated that the July rate cut was not the start of an easing cycle. Stocks did rally off lows, though, after Mr. Powell quickly suggested that policy could still accommodate another cut if necessary. The S&P 500 finished lower by 1.1%.
The Dow Jones Industrial Average (-1.2%) and Nasdaq Composite (-1.2%) posted comparable losses to the benchmark index, while the Russell 2000 (-0.7%) fared slightly better.
Prior to the Fed's decision to cut the target range for the fed funds rate by 25 basis points to 2.00% to 2.25%, there wasn't much conviction from buyers or sellers in the market. The major indices traded marginally higher, mainly supported by the positive price action in Apple (AAPL 213.04, +4.26, +2.0%) following its results and guidance.
In its policy directive, the Fed cited economic uncertainties and inflation levels that were running below its target for its rate decision. Two voting members, however, did dissent to the rate cut, preferring to keep rates unchanged. Separately, the Fed also noted that it will end its balance sheet reduction efforts in August, two months earlier than previously indicated.
The directive stirred some volatility in the market, but Fed Chair Powell's ensuing press conference then caused the real volatility after he used phrases like "insurance" and "mid-cycle adjustment" to describe the Fed's first rate cut since 2008. Stocks fell sharply before the Fed Chair abated selling pressure by saying that his description didn't mean "just one rate cut."
Mr. Powell's clarification wasn't enough to completely ease investors, though. All 11 S&P 500 sectors finished lower, including noticeable declines in the consumer staples (-2.0%), materials (-1.5%), and information technology (-1.5%) sectors. The Philadelphia Semiconductor Index dropped 3.5%.
The weakness in the semiconductor space was mostly attributed to Advanced Micro Devices (AMD 30.45, -3.42, -10.1%) cutting its full-year revenue outlook. The group, like the broader market, did extend losses during Fed Chair Powell's press conference.
U.S. Treasuries also experienced noticeable movements, ultimately flattening the yield curve by session's end. The 2-yr yield, which touched 1.80% prior to the press conference, finished three basis points higher to 1.88%. The 10-yr yield finished near its lows, declining four basis points to 2.02%. The U.S. Dollar Index rose 0.6% to 98.62. WTI crude increased 0.6% to $58.38/bbl.
Reviewing Wednesday's economic data, which included the ADP Employment Change report for July, the Chicago PMI for July, the Employment Cost Index for the second quarter, and the weekly MBA Mortgage Applications Index:
The ADP Employment Change report showed an estimated 156,000 positions were added to private-sector payrolls in July (Briefing.com consensus 150,000).
The Q2 Employment Cost Index increased 0.6% (Briefing.com consensus 0.6%), seasonally adjusted, for the three-month period ending in June 2019 after increasing 0.7% for the three-month period ending in March 2019. Wages and salaries, which account for about 70% of compensation costs, rose 0.7%, while benefit costs, which make up the remainder of compensation costs, increased 0.5%.
The key takeaway from the report is that there has been some moderation in the growth rate of employment costs for civilian workers.
The July Chicago PMI came in at 44.4 (Briefing.com consensus 50.5), slipping further into contraction territory after coming in at 49.7 in June. A reading below 50.0 denotes a contraction.
The weekly MBA Mortgage Applications Index declined 1.4% following a 1.9% decline in the prior week.
Looking ahead, investors will receive the ISM Manufacturing Index for July, Construction Spending for June, and the weekly Initial and Continuing Claims report on Thursday.
Nasdaq Composite +23.2% YTD
S&P 500 +18.9% YTD
Russell 2000 +16.8% YTD
Dow Jones Industrial Average +15.2% YTD
Wall Street ticks lower in front of possible market-moving events
30-Jul-19 16:15 ET
Dow -23.33 at 27198.02, Nasdaq -19.71 at 8273.62, S&P -7.79 at 3013.18
https://www.briefing.com/investor/markets/stock-market-update/2019/7/30/wall-street-ticks-lower-in-front-of-possible-marketmoving-events-.htm
[BRIEFING.COM] The stock market wavered mostly in negative territory on Tuesday, leaving the S&P 500 (-0.3%), Dow Jones Industrial Average (-0.1%), and Nasdaq Composite (-0.2%) with slight losses. There weren't too many positive catalysts for the broader market, but the small-cap Russell 2000 did advance 1.1% to finish near session highs.
The S&P 500's worst levels of the day came shortly after the open, as investors appeared uninterested to participate in the action in front of Apple's (AAPL 208.78, -0.90, -0.4%) earnings report after the close and the FOMC's rate decision tomorrow. President Trump alleging that China has yet to buy U.S. agricultural products added to the negative tone.
Still, aside from some profit taking in hot-flying stocks like Beyond Meat (BYND 194.76, -27.37, -12.3%) and Under Armour (UAA 24.08, -3.36, -12.2%) following their earnings reports, there was no serious interest to withdraw from the broader market. At its low, the S&P 500 was down 0.7% and hanging just above the 3000 level, where it would firmly stay above the rest of the day.
The final standings reflected a mixed session with five S&P 500 sectors finishing higher and six sectors finishing lower. The utilities (-0.8%), information technology (-0.7%), and consumer discretionary (-0.7%) sectors underperformed, while the energy (+1.1%), real estate (+0.9%), and materials (+0.6%) sectors finished on top.
Energy stocks gained traction as oil prices ($58.05, +1.18, +2.1%) made a big move in the afternoon on no confirmed news catalyst. The noticeable gain today could have been derived from speculation that the Fed's expected rate cut tomorrow could increase demand for oil.
In other corporate news, Procter & Gamble (PG 120.41, +4.41, +3.8%) and Merck (MRK 83.27, +0.78, +1.0%) pleased investors with their earnings results. Pfizer (PFE 38.79, -2.66) fell 6.4% after the stock was downgraded at both Bank of America/Merrill Lynch and Morgan Stanley. Capital One (COF 91.21, -5.71) fell 5.9% after disclosing a data breach that affected over 100 million customers.
U.S. Treasuries finished slightly lower in another muted session. The 2-yr yield and the 10-yr yield increased one basis point each to 1.85% and 2.06%, respectively. The U.S. Dollar Index finished unchanged at 98.05.
Reviewing Tuesday's economic data, which included the Personal Income and Spending Report for June, the Conference Board's Consumer Confidence Index for July, the S&P Case-Shiller Home Price Index for May, and Pending Home Sales for June:
Personal income increased 0.4% (Briefing.com consensus 0.4%) while personal spending rose 0.3% (Briefing.com consensus 0.3%) m/m in June. The PCE Price Index was up 0.1%, as expected, and the core PCE price Index, which excludes food and energy, jumped 0.2%, also as expected. On a yr/yr basis, the PCE Price Index held steady at 1.4% while the core PCE Price Index edged up to 1.6% from 1.5% in May.
The key takeaway from the report is that it contained decent consumer data and tame inflation data, which is not all that surprising relative to recent data seen of late.
The Conference Board's Consumer Confidence Index surged to 135.7 in July (Briefing.com consensus 125.5) from an upwardly revised 124.3 (from 121.5) in June. That is the highest reading since November 2018 and the third-highest reading since October 2000.
The key takeaway from the report is that consumers are optimistic about current and prospective business and labor market conditions, and have improved expectations for their financial outlook. That is a supportive combination that will encourage increased consumer spending activity.
The S&P Case-Shiller Home Price Index for May increased 2.4% (Briefing.com consensus 3.5%) after increasing 2.5% in April.
Pending Home Sales increased 1.6% in June (Briefing.com consensus +1.0%). Today's reading follows an unrevised increase of 1.1% in May.
Looking ahead, investors will receive the FOMC rate decision, the ADP Employment Change report for July, the Chicago PMI for July, the Employment Cost Index for the second quarter, and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +24.7% YTD
S&P 500 +20.2% YTD
Russell 2000 +17.6% YTD
Dow Jones Industrial Average +16.6% YTD
Stock market slips from record highs in front of eventful week
29-Jul-19 16:15 ET
Dow +28.90 at 27221.35, Nasdaq -36.88 at 8293.33, S&P -4.89 at 3020.97
https://www.briefing.com/investor/markets/stock-market-update/2019/7/29/stock-market-slips-from-record-highs-in-front-of-eventful-week.htm
[BRIEFING.COM] The S&P 500 lost 0.2% on Monday, slipping from record highs in a lackluster session. The Nasdaq Composite (-0.4%) and Russell 2000 (-0.6%) both underperformed, while the Dow Jones Industrial Average (+0.1%) managed to finish higher.
Monday's session didn't include much price action, as investors appeared to be waiting for several key events later this week. Some of these events will include the FOMC's rate decision, U.S.-China trade talks, the July employment report, and Apple's (AAPL 209.68, +1.94, +0.9%) earnings report. On a related note, Apple's price target was raised to $235 from $225 at UBS before its results after Tuesday's close.
Apple shares rose on the increased price target, but the broader market was still weighed down by widely-held shares of Amazon (AMZN 1912.45, -30.60, -1.6%), Facebook (FB 195.94, -3.81, -1.9%), and Alphabet (GOOG 1239.41, -11.00, -0.9%). In turn, the S&P 500 consumer discretionary (-0.6%) and communication services (-0.5%) sectors were among today's laggards but, like the broader market, finished the session off intraday lows.
The S&P 500 financials sector (-0.8%) succumbed to broad-based selling interest throughout the day. Wells Fargo (WFC 48.28, -1.02, -2.1%) was a notable laggard amid a Wall Street Journal report indicating that the Trump administration plans to make it harder for deeply indebted borrowers to acquire mortgage loans.
On the other hand, the S&P 500 defensive-oriented sectors -- utilities (+0.5%), real estate (+0.5%), health care (+0.4%), and consumer staples (+0.3%) -- were the lone sectors that finished higher.
Separately, Mylan N.V. (MYL 20.78, +2.32, +12.6%) agreed to combine with Pfizer's (PFE 41.45, -1.64, -3.8%) off-patent drug business, giving Mylan shareholders 43% of the combined company. On a related note, Mylan N.V. beat top and bottom-line estimates; Pfizer beat earnings estimates but missed revenue estimates.
U.S. Treasuries finished the session higher, pushing yields lower across the curve. The 2-yr yield and the 10-yr yield declined three basis points each to 1.84% and 2.06%, respectively. The U.S. Dollar Index finished flat at 98.04. WTI crude increased 1.2% to $56.87/bbl.
Investors did not receive any notable economic data on Monday.
Looking ahead, Tuesday will feature the Personal Income and Spending report for June, which will include the Fed's preferred inflation gauge -- the PCE Price Index. Investors will also receive the Conference Board's Consumer Confidence Index for July, Pending Home Sales for June, and the S&P Case-Shiller Home Price Index for May.
Nasdaq Composite +25.0% YTD
S&P 500 +20.5% YTD
Dow Jones Industrial Average +16.7% YTD
Russell 2000 +16.4% YTD
S&P 500, Nasdaq hit new record closes; Alphabet, GDP data spur gains
26-Jul-19 16:15 ET
Dow +51.47 at 27192.45, Nasdaq +91.67 at 8330.21, S&P +22.19 at 3025.86
https://www.briefing.com/investor/markets/stock-market-update/2019/7/26/s-and-p-500-nasdaq-hit-new-record-closes-alphabet-gdp-data-spur-gains.htm
[BRIEFING.COM] The stock market wrapped up the week on a high note, as upbeat results from Alphabet (GOOG 1250.41, +118.29, +10.5%) and encouraging Q2 GDP data helped lift the S&P 500 (+0.7%) and Nasdaq Composite (+1.1%) to record closes. The Russell 2000 rose 1.1%, while the Dow Jones Industrial Average increased just 0.2%.
Friday's session, much like in the days before, included its fair share of better-than-expected earnings reports. Alphabet gets the lead due to its mega-cap status, but honorable mentions include Starbucks (SBUX 99.11, +8.13, +8.9%) and Twitter (TWTR 41.80, +3.68, +9.7%). Dow components Intel (INTC 51.59, -0.57, -1.1%) and McDonald's (MCD 215.58, +1.14, +0.5%) underperformed despite positive results.
Besides earnings, the fact that the U.S. economy continues to grow at a healthy pace was a positive consideration for investors. The advance estimate for second-quarter GDP increased 2.1% (Briefing.com consensus 1.8%), which did mark a modest slowdown from last quarter but not as much as expected due to strong consumer spending.
The S&P 500 communication services sector (+3.3%), which is home to Alphabet and Twitter, nearly tripled the advance in the runner-up consumer staples sector (+1.2%). Laggards included energy (-0.5%) and industrials (-0.2%), although losses were modest.
Amazon (AMZN 1942.70, -31.22, -1.6%) was also left out of the advance after the company missed profit estimates and guided Q3 operating income below expectations.
In corporate news, Intel confirmed that Apple (AAPL 207.74, +0.72, +0.4%) will acquire most of its smartphone modem chip business for $1 billion. 3M (MMM 173.98, -4.15, -2.3%) disclosed an internal investigation to determine if its expenditures may have violated the U.S. Foreign Corrupt Practices Act. The Department of Justice approved the merger between T-Mobile US (TMUS 84.25, +4.34, +5.4%) and Sprint (S 7.99, +0.55, +7.4%).
U.S. Treasuries finished the session with slight losses, pushing yields higher. The 2-yr yield increased two basis points to 1.87%, and the 10-yr yield increased one basis point to 2.08%. The U.S. Dollar Index advanced 0.2% to 98.01. WTI crude increased 0.3% to $56.19/bbl.
Reviewing the Q2 GDP data, which was Friday's lone economic report:
According to the BEA, the advance estimate showed Q2 real GDP increased at a seasonally adjusted annual rate of 2.1% (Briefing.com consensus 1.8%) following a 3.1% increase in the first quarter. The GDP Price Deflator was up 2.4% (Briefing.com consensus 1.8%) after increasing 1.1% in the first quarter.
The key takeaway from the report is that it revealed some impressive strength in the U.S. consumer, evidenced by the 4.3% growth in personal consumption expenditures (PCE), which was the second highest over the past 16 quarters. PCE contributed 2.85 percentage points to Q2 GDP growth.
Investors will not receive any economic data of note on Monday.
Nasdaq Composite +25.5% YTD
S&P 500 +20.7% YTD
Russell 2000 +17.1% YTD
Dow Jones Industrial Average +16.6% YTD
Nasdaq and S&P 500 Snap Three-Day Streak
25-Jul-19 16:15 ET
Dow -128.99 at 27140.98, Nasdaq -82.96 at 8238.54, S&P -15.89 at 3003.67
https://www.briefing.com/investor/markets/stock-market-update/2019/7/25/nasdaq-and-s-and-p-500-snap-threeday-streak.htm
[BRIEFING.COM] The stock market ended Thursday near session lows after spending the day in negative territory. The Dow (-0.5%) and S&P 500 (-0.5%) posted comparable losses while the Nasdaq (-1.0%) underperformed throughout the session.
Quarterly earnings were in focus today, and while the market received a fair share of above-consensus results, individual names did not respond nearly as well. For instance, Facebook (FB 200.71, -3.95, -1.9%) beat earnings and revenue expectations, but cautioned that its revenue growth will slow. Similarly, Xilinx (XLNX 127.59, -4.55, -3.4%) beat quarterly estimates, but issued cautious guidance. The stock was among the weakest performers in the PHLX Semiconductor Index (-1.7%), which was also pressured by a defensive outlook offered overnight by South Korean manufacturer of RAM and flash memory SK Hynix. The PHLX Semiconductor Index trimmed this week's gain to 4.6% after setting a fresh record high yesterday.
In other "earnings" of note, Tesla (TSLA 228.82, -36.06, -13.6%) slid toward its July low after reporting a loss that was three times larger than what analysts had expected. The company also announced that CTO JB Straubel is leaving his role but will continue serving in an advisory capacity.
The top-weighted technology sector (-0.8%) was among today's weakest groups while most of the remaining cyclical sectors recorded slimmer losses. The energy sector (-1.2%) was an exception, finishing at the bottom of the leaderboard, even though crude oil ticked up 0.2% to $56.03/bbl.
Elsewhere, industrials (-0.2%) and consumer staples (unch) held slim gains in early trade, but could not stay above their flat lines through the close. Conglomerate 3M (MMM 178.13, -1.29, -0.7%) started with a sharp gain after beating Q2 expectations, but the stock faded from its early high to end near its session low.
On the international front, the European Central Bank released a dovish policy statement, and ECB President Mario Draghi made it clear that the central bank intends to take steps to increase inflation in the eurozone. However, the ECB President did not announce any new measures today.
Treasuries started the day on their highs, but backtracked after the release of a stronger than expected Durable Orders report for June. Today's $32 bln 7-yr Treasury note auction was received with soft demand, representing the third consecutive weak note auction. The 10-yr yield rose two basis points to 2.07%.
Reviewing today's economic data:
New orders for durable goods jumped 2.0% m/m in June (Briefing.com consensus 1.0%) following a downwardly revised 2.3% decline (from -1.3%) in May. Excluding transportation, new orders rose a healthy 1.2% (Briefing.com consensus 0.3%) following an upwardly revised 0.5% increase (from 0.3%) in May.
The key takeaway from the report is that it revealed a welcome pickup in business spending, which is embedded in the 1.9% increase in nondefense capital goods orders, excluding aircraft. Shipments of those goods were also up 0.6%, which will be a positive input for Q2 GDP forecasts.
Initial claims for the week ending July 20 declined by 10,000 to 206,000 (Briefing.com consensus 215,000) while continuing claims for the week ending July 13 fell by 13,000 to 1.676 million.
The key takeaway from the report is that there was nothing new to take away from it: initial claims remain near historically low levels in a reflection of a tight labor market.
The advance June goods trade deficit totaled $74.20 bln (prior deficit of $75.00 bln).
Advance Retail Inventories decreased 0.1% in June after increasing 0.3% in May.
Advance Wholesale Inventories increased 0.2% in June after increasing by 0.4% in May.
Tomorrow's data will be limited to the 8:30 ET release of advance Q2 GDP (Briefing.com consensus 1.8%; prior 3.1%) and Q2 GDP Deflator (Briefing.com consensus 1.8%; prior 0.6%).
Nasdaq Composite +24.2% YTD
S&P 500 +19.8% YTD
Dow Jones Industrial Average +16.4% YTD
Russell 2000 +15.8% YTD
S&P 500, Nasdaq Composite set new record highs
24-Jul-19 16:25 ET
Dow -79.22 at 27269.97, Nasdaq +70.10 at 8321.51, S&P +14.09 at 3019.56
https://www.briefing.com/investor/markets/stock-market-update/2019/7/24/s-and-p-500-nasdaq-composite-set-new-record-highs.htm
[BRIEFING.COM] The S&P 500 (+0.5%) and Nasdaq Composite (+0.9%) set new record highs on Wednesday, boosted by out-sized gains in the semiconductor stocks and by shares of companies that beat earnings estimates. The Russell 2000 rose 1.6%.
The Dow Jones Industrial Average, however, lost 0.3% amid noticeable losses in Boeing (BA 361.43, -11.54, -3.1%) and Caterpillar (CAT 131.91, -6.19, -4.5%) following disappointing earnings reports.
Today's advance was forged in the afternoon, as the market began to shake off several early concerns and instead rally around the host of companies that did provide good earnings news. Some of those concerns included the Department of Justice announcing a probe into the "market-leading online platforms," the weaker-than-expected eurozone flash manufacturing PMI for July, and Caterpillar lowering its full-year EPS guidance.
Notable earnings-related gainers included Visa (V 183.33, +2.43, +1.3%), UPS (UPS 114.39, +9.12, +8.7%), Texas Instruments (TXN 129.00, +8.93, +7.4%), Northrop Grumman (NOC 342.97, +18.98, +5.9%), Chipotle Mexican Grill (CMG 777.96, +38.36, +5.2%), and Snap (SNAP 17.61, +2.78, +18.8%). The market's ability to find support in these companies was encouraging for investors worried about market leadership being too concentrated among a handful of tech giants.
The S&P 500 communication services (+0.9%) and financials (+0.9%) sectors were the day's best-performing sectors. Semiconductor stocks had a field day, rallying on Texas Instruments' solid results. The Philadelphia Semiconductor Index advanced 3.1%, boosting its year-to-date gain to a staggering 40%.
Conversely, the consumer staples (-0.6%), real estate (-0.1%), and materials (-0.02%) sectors finished lower.
Separately, for most of the day, the DoJ regulatory threat weighed on shares of Facebook (FB 204.66, +2.30, +1.1%), Amazon (AMZN 2000.81, +6.32, +0.3%), Alphabet (GOOG 1137.81, -8.40, -0.7%), and Apple (AAPL 208.67, -0.17, -0.1%). The FTC also confirmed that Facebook will pay a $5 billion fine for its privacy mishaps, but the stock still rallied heading into its earnings report after the close.
Although the probe added to the uncertainty facing these companies, the positive mood in the market helped shares recoup a bulk of their early losses. In addition, the fact that interest rates remain low should remain a positive consideration for risk assets.
U.S. Treasury yields finished lower on Wednesday. The 2-yr yield declined one basis point to 1.82%, and the 10-yr yield declined two basis points to 2.05%. The U.S. Dollar Index was unchanged at 97.72. WTI crude lost 1.4% to $55.93/bbl.
Reviewing Wednesday's economic data, which included New Home Sales for June and the weekly MBA Mortgage Applications Index:
New home sales increased 7.0% m/m to a seasonally adjusted annual rate of 646,000 (Briefing.com consensus 660,000) from a downwardly revised 604,000 (from 626,000) in May. Sales for April and March were also revised lower.
The key takeaway from the report is that overall sales activity remains tepid despite the fundamental supports of low mortgage rates, low unemployment, and a tight supply of existing homes for sale.
The weekly MBA Mortgage Applications Index declined 1.9% following a 1.1% decline in the prior week.
Looking ahead, investors will receive Durable Goods Orders for June, the weekly Initial and Continuing claims report, and the Advance reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories for June on Thursday.
Nasdaq Composite +25.4% YTD
S&P 500 +20.5% YTD
Dow Jones Industrial Average +16.9% YTD
Russell 2000 +17.2% YTD
Wall Street lifted by trade news, positive earnings reports
23-Jul-19 16:15 ET
Dow +177.29 at 27349.19, Nasdaq +47.27 at 8251.41, S&P +20.44 at 3005.47
https://www.briefing.com/investor/markets/stock-market-update/2019/7/23/wall-street-lifted-by-trade-news-positive-earnings-reports.htm
[BRIEFING.COM] The S&P 500 increased 0.7% on Tuesday, bolstered by encouraging trade news and positive earnings reports from widely-held companies. The Dow Jones Industrial Average (+0.7%), Nasdaq Composite (+0.6%), and Russell 2000 (+0.7%) advanced in-line with the benchmark index.
It had been a tight-ranged session for a good part of the day despite positive earnings results and guidance from a diversified group of companies like Coca-Cola (KO 54.33, +3.11, +6.1%), United Technologies (UTX 134.94, +1.99, +1.5%), Sherwin-Williams (SHW 490.23, +35.64, +7.8%), and Biogen (BIIB 243.88, +11.40, +4.9%). Travelers (TRV 147.50, -2.21, -1.5%), however, did come up short of expectations.
Unsurprisingly, a positive trade headline helped energize the slow-moving market. Bloomberg reported that USTR Lighthizer and other senior officials will head to China next week to continue trade talks from Monday to Wednesday. Although this possibility had been reported earlier and many high-level talks in the past have yielded little progress, the good mood in the market flowing from earnings seemed to sway the market.
The news pushed the S&P 500 back above the 3000 level, where it would stay above on a closing basis. Ten of the 11 S&P 500 sectors finished higher, led by the trade-sensitive materials (+2.0%) and industrials (+1.2%) sectors. The utilities sector was the lone holdout, finishing lower by 0.6%.
Qualcomm (QCOM 74.12, -1.83, -2.4%) was also left out of the advance after The Wall Street Journal reported that Apple (AAPL 208.84, +1.62, +0.8%) is considering buying Intel's (INTC 51.75, +0.40, +0.8%) smartphone-modem chip business for around $1 billion. The Philadelphia Semiconductor Index finished up 1.2%.
Separately, Congress reached a deal to increase the budget deficit and suspend the debt ceiling for two years. The news provided some relief for investors, but market reaction was mostly muted as the dilemma never appeared to hinder the market beforehand and it was reported yesterday that a deal was close.
U.S. Treasuries finished on a lower note, pushing yields higher across the curve. The 2-yr yield increased two basis points to 1.83%, and the 10-yr yield increased three basis points to 2.07%. The U.S. Dollar Index advanced 0.5% to 97.74, helped by some weakness in the euro. WTI crude rose 0.9% to $56.72/bbl.
Reviewing Tuesday's economic data, which included Existing Home Sales for June and the FHFA Housing Market Index for May:
Existing home sales decreased 1.7% month-over-month in June to a seasonally-adjusted annual rate of 5.27 million (Briefing.com consensus 5.30 million) from an upwardly revised 5.36 million (from 5.34 million) in May. Total sales were 2.2% lower than the same period a year ago.
The key takeaway from the report is that the drop in mortgage rates has failed to spur a meaningful pickup in existing home sales, which continue to be constrained by the lack of available supply at lower price points.
The FHFA Housing Price Index for May increased 0.1% after advancing 0.4% in June.
Looking ahead, investors will receive New Home Sales for June and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +24.4% YTD
S&P 500 +19.9% YTD
Dow Jones Industrial Average +17.2% YTD
Russell 2000 +15.3% YTD
Wall Street carried higher by tech stocks
22-Jul-19 16:20 ET
Dow +17.70 at 27171.90, Nasdaq +57.65 at 8204.14, S&P +8.42 at 2985.03
https://www.briefing.com/investor/markets/stock-market-update/2019/7/22/wall-street-carried-higher-by-tech-stocks.htm
[BRIEFING.COM] The S&P 500 increased 0.3% on Monday in a tech-driven advance. Noticeable gains in Apple (AAPL 207.22, +4.63, +2.3%), Facebook (FB 202.32, +23.96, +2.0%), Amazon (AMZN 1985.63, +21.11, +1.1%), and Microsoft (MSFT 138.43, +1.81, +1.3%) contributed to the outperformance of the Nasdaq Composite (+0.7%).
The Dow Jones Industrial Average increased 0.1%, while the Russell 2000 declined 0.2%.
The S&P 500 information technology sector (+1.2%) was Monday's outright leader, led by shares of Apple and semiconductor companies. The other ten S&P 500 sectors didn't stray too far from their unchanged marks, although the consumer staples sector (-0.5%) did show relative weakness.
The Philadelphia Semiconductor Index rose 2.0% following positive commentary out of Goldman Sachs. The firm upgraded Micron (MU 47.19, +1.67, +3.7%), Lam Research (LRCX 207.21, +8.74, +4.4%), and Applied Materials (AMAT 50.73, +2.92, +6.1%) to Buy from Neutral, stemming from a positive view on the memory market. Similarly, Apple outperformed after Morgan Stanley raised its price target to $247 from $231.
Separately, Boston Fed President Rosengren (FOMC voter) advocated against a rate cut at the July 30-31 policy meeting after Friday's close. The market appeared undeterred by the stance on Monday, as it still expected a cut of at least 25 basis points. Still, outside of tech names, there appeared to be some buying reservations in front of key economic data released later this week.
Interestingly, declining issues outpaced advancing issues in both the NYSE and Nasdaq on Monday.
Notable companies that reported earnings on Monday included Halliburton (HAL 23.74, +1.99, +9.2%) and RPM Inc. (RPM 65.09, +2.80, +4.5%), both of which beat profit estimates. Lennox International (LII 264.00, -14.90, -5.3%), however, came up short of expectations and lowered its full-year guidance.
U.S. Treasuries closed slightly higher in a quiet session. The 2-yr yield and the 10-yr yield declined one basis point each to 1.81% and 2.04%, respectively. The U.S. Dollar Index increased 0.2% to 97.29. WTI crude advanced 1.0% to $56.20/bbl amid lingering concerns that tensions in the Middle East will disrupt supply.
Investors did not receive any notable economic data on Monday. Looking ahead, the FHFA Housing Price Index for May and Existing Home Sales for June will be released on Tuesday.
Nasdaq Composite +23.6% YTD
S&P 500 +19.1% YTD
Dow Jones Industrial Average +16.5% YTD
Russell 2000 +14.6% YTD
Wall Street fades amid geopolitical angst, lower rate-cut hopes
19-Jul-19 16:15 ET
Dow -68.77 at 27154.20, Nasdaq -60.75 at 8146.49, S&P -18.50 at 2976.61
https://www.briefing.com/investor/markets/stock-market-update/2019/7/19/wall-street-fades-amid-geopolitical-angst-lower-ratecut-hopes.htm
[BRIEFING.COM] The S&P 500 faded into the close and lost 0.6% on Friday, as geopolitical angst and expectations for a smaller Fed rate cut weighed on the broader market. The Nasdaq Composite lost 0.7%, and the Russell 2000 lost 0.5%.
The Dow Jones Industrial Average (-0.3%) fared slightly better, supported by shares of Boeing (BA 377.36, +16.25, +4.5%) after it announced a $4.9 billion charge for its 737 MAX grounding.
Price action for most of the day had been muted until Iran said it seized a British oil tanker and The Wall Street Journal reported that the Fed is signaling a 25-basis points rate cut at the July 30-31 FOMC meeting.
The latter report dampened hopes for a 50-basis points rate cut, which had already been on the decline after a Fed spokesman dialed down comments from NY Fed President Williams that were perceived as dovish yesterday. In turn, the fed-funds sensitive 2-yr yield increased four basis points to 1.82%, while the 10-yr yield increased one basis point to 2.05%. The U.S. Dollar Index rose 0.4% to 97.15.
According to the CME FedWatch Tool, the implied likelihood for the quarter-point cut climbed to 77.5% from 39.8% yesterday.
Heightened tensions in the Middle East did spur a rebound in oil prices ($55.66/bbl, +$0.47, +0.9%), which contributed to the outperformance of the S&P 500 energy sector (+0.5%). Still, losses in eight of the 11 S&P 500 sectors, including the real estate (-1.7%), utilities (-1.5%), and communication services (-1.3%) sectors, dragged on the broader market.
Transport stocks outperformed on Friday after KC Southern (KSU 123.43, +5.44, +4.6%) reported better-than-expected earnings results. The Dow Jones Transportation Average advanced 0.6% to cut its weekly loss to just 0.3%.
In other earnings news, Dow components Microsoft (MSFT 136.62, +0.20, +0.2%) and American Express (AXP 124.82, -3.58, -2.8%) beat earnings estimates, but the price action in shares was disappointing. MSFT was up as much as 3.1% today but faded alongside the broader market during the afternoon.
Friday's lone economic report was the preliminary July reading for the University of Michigan Index of Consumer Sentiment:
The preliminary University of Michigan Consumer Sentiment Index for July checked in at 98.4 (Briefing.com consensus 98.9) versus the final reading of 98.2 for June.
The key takeaway from the report is the finding that consumers' expectations fall as their inflation expectations rise, so it will be assumed for the time being that consumer expectations will remain elevated since their one-year inflation expectations dipped from 2.7% to 2.6%.
Investors will not receive any notable economic data on Monday.
Nasdaq Composite +22.8% YTD
S&P 500 +18.7% YTD
Dow Jones Industrial Average +16.4% YTD
Russell 2000 +14.8% YTD
Wall Street closes higher, lifted by dovish Fed comments and earnings
18-Jul-19 16:20 ET
https://www.briefing.com/investor/markets/stock-market-update/2019/7/18/wall-street-closes-higher-lifted-by-dovish-fed-comments-and-earnings-.htm
Dow +3.12 at 27222.97, Nasdaq +22.04 at 8207.24, S&P +10.69 at 2995.11[BRIEFING.COM] The S&P 500 overcame a sluggish start to increase by 0.4% on Thursday, as dovish Fed commentary bolstered expectations for aggressive monetary policy. In addition, mostly positive reactions to earnings reports helped provide support for the market.
The Nasdaq Composite and the Russell 2000 both increased 0.3%. The Dow Jones Industrial Average finished flat, pressured by losses in shares of Boeing (BA 361.11, -8.41, -2.3%) and UnitedHealth (UNH 260.60, -6.05, -2.3%) with UNH unable to gain on positive earnings results.
New York Fed President Williams (FOMC voter) catalyzed a slow-moving market after he said that when interest rates are low and there are signs of economic slowing, it is better to lower rates and keep them low rather than keep the Fed's powder dry. The dovish commentary increased the probability for a 50-basis points rate cut at the July 30-31 FOMC meeting to 66.9% from 34.3% yesterday, according to the fed funds futures market.
Lower rates, which were seen across the U.S. Treasury yield curve, should continue to favor risk assets. The fed-funds sensitive 2-yr yield declined five basis points to 1.78%, and the 10-yr yield declined two basis points to 2.04%. The U.S. Dollar Index lost 0.5% to 96.69.
Overall, the gains were modest, but the S&P 500 consumer staples (+0.8%), financials (+0.8%), information technology (+0.8%), and utilities (+0.8%) sectors did gain 0.8% apiece. The communication services sector (-0.9%) was a drag on the market, as shares of Netflix (NFLX 325.21, -37.23) fell 10.3% after disappointing investors with a miss on net subscriber additions.
Notable standouts on Thursday included Union Pacific (UNP 174.25, +9.70, +5.9%) and Taiwan Semi (TSM 43.19, +1.56, +3.8%) after both provided upbeat earnings results and commentary, helping fuel the gains in the Dow Jones Transportation Average (+1.3%) and Philadelphia Semiconductor Index (+1.5%). The transportation average, however, only recouped some of yesterday's 3.6% decline.
In other earnings news, Philip Morris International (PM 87.71, +6.66, +8.2%), IBM (IBM 149.63, +6.56, +4.6%), Morgan Stanley (MS 44.43, +0.66, +1.5%), and Honeywell (HON 173.88, +5.26, +3.1%) climbed on better-than-expected results.
Separately, oil prices fell for the sixth straight session on Thursday. WTI crude settled 2.8% lower at $55.19/bbl but finished on a high note after President Trump said the U.S. Navy defensively shot down an Iranian drone near the Strait of Hormuz.
Reviewing Thursday's economic data, which included the weekly Initial and Continuing Claims report, the Philadelphia Fed Index for July, and the Conference Board's Leading Economic Index for June:
Initial claims for the week ending July 13 increased by 8,000, yet they remain at a very low level of 216,000 (Briefing.com consensus 215,000). Continuing claims for the week ending July 6 dropped by 42,000 to 1.686 million.
The key takeaway from the report is that it covers the period in which the survey for the July employment report is conducted. The low level of initial claims during the survey week will underpin economists' expectations for another solid increase in nonfarm payrolls.
The Conference Board's Leading Economic Index declined 0.3% in June (Briefing.com consensus 0.0%) following an unchanged reading for May. The 0.3% decline is the first decline since December 2018 and the largest decline since January 2016.
The key takeaway from the report is that it suggests growth is apt to remain slow in the second half of the year, according to the Conference Board.
The Philadelphia Fed Index sprung back to life with a 21.8 reading for July (Briefing.com consensus 5.0) that was well ahead of the 0.3 reading for June. The dividing line between expansion and contraction is 0.0.
Looking ahead, investors will receive the preliminary University of Michigan Index of Consumer Sentiment for July on Friday.
Nasdaq Composite +23.7% YTD
S&P 500 +19.5% YTD
Dow Jones Industrial Average +16.7% YTD
Russell 2000 +15.4% YTD
CSX, transport stocks lead market lower
17-Jul-19 16:20 ET
Dow -115.78 at 27219.85, Nasdaq -37.59 at 8185.20, S&P -19.62 at 2984.42
https://www.briefing.com/investor/markets/stock-market-update/2019/7/17/csx-transport-stocks-lead-market-lower.htm
[BRIEFING.COM] The S&P 500 lost 0.6% on Wednesday, pressured by noticeable losses in the transport stocks after CSX Corp. (CSX 71.38, -8.17, -10.3%) provided disappointing earnings results and guidance. The broader market traded modestly lower for most of the day with losses accelerating into the close.
The Dow Jones Industrial Average lost 0.5%, the Nasdaq Composite lost 0.5%, and the Russell 2000 lost 0.7%.
CSX was presumably the biggest influence on the transports, but earnings warnings from trucking companies Knight-Swift (KNX 35.08, -0.81, -2.3%) and Covenant Transport (CVTI 14.65, -0.51, -3.4%) also contributed to the negative sentiment. Strikingly, the transports were among the best performers yesterday amid easing concerns about a downturn in the sector.
Evidently, the negative-minded guidance brought out the naysayers, yielding losses across the space and big losses in shares of road and rail companies like Union Pacific (UNP 164.55, -10.60, -6.1%) and Norfolk Southern (NSC 191.02, -15.44, -7.5%). The Dow Jones Transportation Average lost 3.6%, wiping out its monthly advance.
The S&P 500 industrials sector (-2.2%) was Wednesday's outright laggard, nearly doubling the losses of the second-worst performing energy sector (-1.2%). There were some bright spots in the space, though. Top-weighted component Boeing (BA 369.52, +6.77) rose 1.9% on no specific news catalyst, while United Airlines (UAL 94.78, +0.86, +0.9%) and Cintas (CTAS 260.37, +20.93, +8.7%) advanced on better-than-expected earnings results.
The S&P 500 utilities (+0.4%) and health care (+0.02%) sectors were the lone sectors that finished higher. Abbott Labs (ABT 85.76, +2.60, +3.3%) gave the health care sector some support after pleasing investors with its earnings results.
Despite earnings-related gains in Bank of America (BAC 29.19, +0.20, +0.7%) and U.S. Bancorp (USB 54.22, +1.18, +2.2%), the S&P 500 financial sector (-0.9%) was unable to gain any ground. Most components finished lower, as the decline in U.S. Treasury yields, and some curve-flattening, weighed on the sector.
The 2-yr yield declined three basis points to 1.83%, and the 10-yr yield declined six basis points to 2.06%. The U.S. Dollar Index lost 0.2% to 97.21. WTI crude lost 1.4% to $56.78/bbl.
Separately, The Wall Street Journal published a report right before the close, indicating that the U.S. and China remain conflicted about restrictions on Huawei Technologies. The report may have contributed to the increased selling into the close.
Reviewing Wednesday's economic data, which included Housing Starts and Building Permits for June and the weekly MBA Mortgage Applications Index:
Housing starts declined 0.9% m/m in June to a seasonally adjusted annual rate of 1.253 million units (Briefing.com consensus 1.270 million) while building permits declined 6.1% m/m to a seasonally adjusted annual rate of 1.220 million (Briefing.com consensus 1.300 million).
The key takeaway from the report is that the single-family supply dynamic will remain a limiting issue for the overall housing market as single-family starts were down 0.8% yr/yr while single-family permits were down 4.7% yr/yr.
The weekly MBA Mortgage Applications Index declined 1.1% following a 2.4% decline in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report, the Philadelphia Fed Index for July, and the Conference Board's Leading Economic Index for June on Thursday.
Nasdaq Composite +23.4% YTD
S&P 500 +19.1% YTD
Dow Jones Industrial Average +16.7% YTD
Russell 2000 +15.0% YTD
Wall Street closes lower despite positive bank earnings
16-Jul-19 16:20 ET
Dow -23.53 at 27335.63, Nasdaq -35.39 at 8222.79, S&P -10.26 at 3004.04
https://www.briefing.com/investor/markets/stock-market-update/2019/7/16/wall-street-closes-lower-despite-positive-bank-earnings.htm
[BRIEFING.COM] The S&P 500 lost 0.3% on Tuesday, led lower by shares of energy and technology companies while bank earnings failed to generate much excitement. The Dow Jones Industrial Average lost 0.1%, and the Nasdaq Composite lost 0.4%. The Russell 2000 finished flat.
The session began with very little price action, although the Dow did set a new all-time high in the early going amid positive reactions to earnings reports from JPMorgan Chase (JPM 115.12, +1.22, +1.1%) and Goldman Sachs (GS 215.52, +3.94, +1.9%). Like JPM and GS, Wells Fargo (WFC 45.30, -1.41, -3.0%) and Johnson & Johnson (JNJ 132.50, -2.21, -1.6%) beat earnings estimates, but shares finished noticeably lower.
Despite the mostly positive results, the broader market was seemingly uninterested as the good news may have already been priced in. An understanding that earnings from big tech companies are just around the corner may have also kept some buyers sidelined.
Price action picked up after President Trump said that there is still a "long way to go" with China on trade. This helped drive stocks to session lows, although losses were only modest. At its low, the S&P 500 was only down 0.4% and was able to hold above the 3000 level.
Losses in the S&P 500 energy (-1.1%) and information technology (-0.9%) sectors contributed to the downside bias, but gains in the industrials (+0.7%) and materials (+0.2%) sectors helped provide offsetting support.
Energy stocks were pressured by lower oil prices ($57.61/bbl, -$1.90, -3.2%) after Secretary of State Mike Pompeo said that Iran was ready to negotiate on its missile program. The industrials sector benefited from gains in the transport stocks after JB Hunt Transport Services (JBHT 97.73, +5.15, +5.6%) provided positive earnings results and an upbeat outlook for the second half of the year. The Dow Jones Transportation Average advanced 1.8%.
Separately, dovish comments from Fed Chair Powell and Chicago Fed President Evans (FOMC voter) affirmed expectations for at least a 25-basis points rate cut at the July 30-31 FOMC meeting. A 50-basis points rate cut or further rate cuts beyond this month, however, remains less clear. On Tuesday, better-than-expected retail sales for June and Dallas Fed President Kaplan (non-FOMC voter) advocating against aggressive rate cuts kept hopes subdued.
Retail sales for June increased 0.4% (Briefing.com consensus 0.2%), which contributed to the declining interest in U.S. Treasuries. The 2-yr yield and the 10-yr yield increased three basis points each to 1.86% and 2.12%, respectively. The U.S. Dollar Index advanced 0.5% to 97.38.
Reviewing Tuesday's batch of economic data, which featured Retail Sales for June:
Total retail sales were up 0.4% m/m in June (Briefing.com consensus +0.2%) following a downwardly revised 0.4% increase (from +0.5%) in May. Retail sales, excluding autos, were also up 0.4% (Briefing.com consensus +0.2%) following a downwardly revised 0.4% increase (from +0.5%) in May. Core retail sales, which exclude motor vehicle, gasoline station, building materials, and food services and drinking places sales, jumped 0.7% m/m.
The key takeaway from the report is that it was a solid report overall and will diminish the prospect of a 50-basis points cut at the July 30-31 FOMC meeting.
Import prices declined 0.9% m/m following an upwardly revised unchanged reading (from -0.3%) for May. Excluding fuel, import prices were down 0.3% for the second straight month. Export prices declined 0.7% m/m and were down 1.1% excluding agricultural exports.
The key takeaway from the report is the lack of inflation pressure seen in it. Nonfuel import prices were down 1.4% yr/yr, versus up 1.5% for the 12-month period ending June 2018. Nonagricultural export prices were down 1.6% yr/yr after being up 5.3% for the 12-month period ending June 2018.
Industrial production was unchanged in June (Briefing.com consensus +0.2%) after increasing an unrevised 0.4% in May. The total industry capacity utilization rate fell to 77.9% (Briefing.com consensus 78.2%) from an unrevised 78.1% in May.
The key takeaway from the report is that factory production declined at an annual rate of 2.2% in the second quarter, which was roughly the same pace as in the first quarter.
Business inventories increased 0.3% in May (Briefing.com consensus 0.4%) following an unrevised 0.5% increase in April. Business sales increased 0.2% after declining an unrevised 0.2% in April.
The key takeaway from the report is that the gap between inventory growth on a yr/yr basis (+5.3%) and sales growth (+1.5%) has widened, which should keep prices in check.
The NAHB Housing Market Index for July came in at 65 (Briefing.com consensus 62), up from 64 from June.
Looking ahead, investors will receive Housing Starts and Building Permits for June, the weekly MBA Mortgage Applications Index, and the Fed's Beige Book for July on Wednesday.
Nasdaq Composite +23.9% YTD
S&P 500 +19.8% YTD
Dow Jones Industrial Average +17.2% YTD
Russell 2000 +15.8% YTD
Stock market ekes out gains as earnings season begins
15-Jul-19 16:20 ET
Dow +27.13 at 27359.16, Nasdaq +14.04 at 8258.18, S&P +0.53 at 3014.30
https://www.briefing.com/investor/markets/stock-market-update/2019/7/15/stock-market-ekes-out-gains-as-earnings-season-begins.htm
[BRIEFING.COM] The stock market eked out small gains on Monday. The major averages struggled to find direction, but the S&P 500 (+0.02%), Dow Jones Industrial Average (+0.1%), and Nasdaq Composite (+0.2%) did manage to set new record closes. The small-cap Russell 2000 underperformed with a loss of 0.5%.
Citigroup (C 71.73, -0.04, -0.1%) kicked off the second quarter earnings-reporting season with better-than-expected results, but the response was underwhelming as some questioned the quality of its report. On a related note, shares of JPMorgan Chase (JPM 113.90, -1.40, -1.2%), Wells Fargo (WFC 46.70, -0.66, -1.4%), and Goldman Sachs (GS 211.58, -2.36, -1.1%) each lost over 1.0% ahead of the companies' results tomorrow morning.
Their collective weakness weighed on the S&P 500 financials sector (-0.5%), while lower oil prices ($59.51/bbl, -$0.13, -2.9%) put some pressure on the underperforming energy sector (-0.9%). The industrials sector (-0.4%) was the one other group to finish lower amid weakness from its top-weighted components, including Boeing (BA 361.61, -3.72, -1.0%) and General Electric (GE 10.27, -0.10, -1.0%).
Specifically, Boeing's 737 MAX issues continued to weigh on the stock with the planes possibly being grounded into next year, according to The Wall Street Journal. General Electric was downgraded to Neutral from Buy at UBS.
It was still a mostly positive day, though, with gains in the other eight S&P 500 sectors providing offsetting support. The utilities (+0.4%), consumer discretionary (+0.3%), and information technology (+0.3%) sectors showed relative strength on Monday. The Philadelphia Semiconductor Index was a notable standout with a gain of 0.8%.
Semiconductor company Broadcom (AVGO 288.34, +2.95, +1.0%) outperformed on reports that acquisition talks with Symantec (SYMC 22.84, -2.73, -10.7%) broke down. The China-sensitive industry might have also drawn some interest after Beijing reported better-than-expected data for industrial production, fixed asset investment, and retail sales for June.
U.S. Treasuries finished slightly higher in a quiet session. The 2-yr yield and the 10-yr yield declined one basis point each to 1.83% and 2.09%, respectively. The U.S. Dollar Index advanced 0.1% to 96.95. WTI crude declined 1.2% to $59.51/bbl.
The Empire State Manufacturing Survey for July was Monday's lone economic report:
It checked in at 4.3 versus a June reading of -8.6. That was below the Briefing.com consensus estimate of 5.0, yet above the 0.0 demarcation line between expansion and contraction. Furthermore, there was a bump in the index for future business conditions to 30.8 from 25.7.
Looking ahead, investors will receive the following economic reports on Tuesday: Retail Sales for June, Import and Export Prices for June, Industrial Production and Capacity Utilization for June, Business Inventories for May, the NAHB Housing market Index for July, and Net Long-Term TIC Flows for May.
Nasdaq Composite +24.5% YTD
S&P 500 +20.2% YTD
Dow Jones Industrial Average +17.3% YTD
Russell 2000 +15.8% YTD
Major Averages Secure Fresh Records
12-Jul-19 16:15 ET
Dow +243.95 at 27332.03, Nasdaq +48.10 at 8244.14, S&P +13.86 at 3013.77
https://www.briefing.com/investor/markets/stock-market-update/2019/7/12/major-averages-secure-fresh-records.htm
[BRIEFING.COM] The major averages ended the week at fresh record highs after a steady daylong push that was paced by the Dow Jones Industrial Average (+0.9%) while the Nasdaq (+0.6%) and S&P 500 (+0.5%) recorded slimmer gains. The small cap Russell 2000 (+0.8%) had a better showing than its large cap peers, but the index has another 10.0% to gain before revisiting its record from last year.
Today's advance was supported by continued hope for a rate cut taking place as soon as July 31. Fed Chairman Jay Powell's dovish two-day testimony on monetary policy was followed by an overt call for a lower fed funds rate range. Chicago Fed President, Charles Evans, said today that "a couple rate cuts" are needed in order to boost inflation. Interestingly, this comes just two months after the FOMC voter said that the fed funds rate could remain at its current level until late 2020. Furthermore, the Fed's preferred inflation gauge (core PCE) increased 1.7% yr/yr in Q1, which was a faster rate than what was seen when the central bank began raising rates at the end of 2015 (1.2%).
Eight out of eleven sectors recorded gains on Friday, with cyclical groups faring better than the countercyclical side. Industrials (+1.8%) and consumer discretionary (+1.1%) spent the day atop the leaderboard to end the week with respective gains of 1.2% and 2.1%.
Industrials rallied alongside heavyweight Boeing (BA 365.33, +6.33, +1.8%) while transport stocks outperformed. The Dow Jones Transportation Average jumped 2.4% with trucking names leading the push. JB Hunt (JBHT 92.94, +5.18, +5.9%) and Ryder (R 57.53, +3.14, +5.8%) spiked near 6.0% apiece, even though peer, U.S. Xpress (USX 4.32, -0.53, -10.9%), warned that industry conditions have worsened.
In other high-beta groups, the PHLX Semiconductor Index spiked 1.9% with all but two components finishing higher. The Index extended this week's advance to 2.9% while the broader technology sector rose 0.8%, gaining 1.5% for the week.
Elsewhere, Ford (F 10.49, +0.30, +2.9%) jumped almost 3.0% after Volkswagen confirmed that the two companies will increase their cooperation aimed at developing autonomous vehicle technology.
On the downside, the health care sector (-1.2%) spent the day behind the remaining groups. Drugmakers were pressured after Illumina (ILMN 305.05, -58.61, -16.1%) issued weaker than expected guidance for Q2 and lowered its outlook for the fiscal year. Another sector component, Johnson & Johnson (JNJ 134.30, -5.81, -4.2%), slid to a five week low after Bloomberg reported that the company could face a criminal probe into undisclosed health risks associated with JNJ's baby powder.
Treasuries started the day in the red, but a daylong rebound lifted all tenors into the green by the close. The 10-yr yield dipped one basis point to 2.11%. The U.S. Dollar Index returned into the neighborhood of its 200-day moving average (96.77), sliding 0.3% to 96.81.
Today's economic data was limited to June PPI:
The index for final demand increased 0.1% m/m in June (Briefing.com consensus 0.0%), held back by a 3.1% drop in the index for final demand energy, while the index for final demand, excluding food and energy, rose 0.3% m/m (Briefing.com consensus +0.2%). Those readings left the index for final demand up 1.7% yr/yr, versus 1.8% yr/yr in May. That is the lowest 12-month change since January 2017. Core PPI, however, was up 2.3% yr/yr, which was unchanged from May.
The key takeaway from the report is that Producer Price Index for June, like the Consumer Price Index for June, didn't exactly support the case for a 50-basis points cut in July. Some might argue, too, that it didn't event support the case for a 25-basis points cut in July, yet that's almost a moot (and mute) argument given the subtext of Mr. Powell's remarks in his semiannual monetary policy testimony.
Monday's economic data will be limited to the 10:00 ET release of the Empire State Manufacturing Survey (Briefing.com consensus 5.0; prior -8.6).
Nasdaq Composite +24.3% YTD
S&P 500 +20.2% YTD
Dow Jones Industrial Average +17.2% YTD
Russell 2000 +16.4% YTD
S&P 500, Dow close at record highs amid lingering rate-cut optimism
11-Jul-19 16:20 ET
Dow +227.88 at 27088.17, Nasdaq -6.49 at 8196.04, S&P +6.84 at 2999.91
https://www.briefing.com/investor/markets/stock-market-update/2019/7/11/s-and-p-500-dow-close-at-record-highs-amid-lingering-ratecut-optimism.htm
[BRIEFING.COM] The S&P 500 (+0.2%) and Dow Jones Industrial Average (+0.9%) closed at record highs on Thursday amid lingering rate-cut optimism. The Dow also hit the 27,000 level for the first time, but the Nasdaq Composite (-0.1%) and Russell 2000 (-0.5%) were unable to keep pace.
Despite the record highs, Thursday's session was relatively tight ranged. The S&P 500 quickly challenged its intraday high (3003) from yesterday, which is also its all-time high, but was unable to surpass it as the market appeared tired after a big stretch of gains.
Thursday's leaders included most of the S&P 500 cyclical sectors. The industrials (+0.7%), financials (+0.6%), and materials (+0.4%) sectors finished atop the standings. The real estate sector (-1.2%) was the day's outright laggard amid higher U.S. Treasury yields.
The 2-yr yield increased three basis points to 1.85%, and the 10-yr yield increased six basis points to 2.12%. The U.S. Dollar Index declined 0.1% to 97.06. WTI crude declined 0.4% to $60.26/bbl.
Fed Chair Powell wrapped up his semiannual testimony on Capitol Hill on Thursday, which didn't differ too much from yesterday's session. Mr. Powell's dovish tone assured the market's thinking that the Fed will cut the fed funds rate by at least 25 basis points at the July 30-31 FOMC meeting.
Higher-than-expected consumer inflation data, however, did temper some expectations for a 50-basis points rate cut. The core reading in the Consumer Price Index for June rose 0.3% (Briefing.com consensus 0.2%), raising the yr/yr rate to 2.1% versus 2.0% in May. According to the fed funds futures market, the implied likelihood for a 50-basis points cut declined to 20.4% from 26.6% yesterday.
Separately, the White House abandoned its proposal to eliminate rebates from government drug plans, which benefited shares of health insurers and companies with exposure to pharmacy benefit management.
UnitedHealth (UNH 261.16, +13.68, +5.5%), CVS Health (CVS 57.97, +2.59, +4.7%), and Cigna (CI 175.34, +14.83, +9.2%) rose on the news, but pharmaceutical companies like Merck (MRK 81.00, -3.82, -4.5%) and Pfizer (PFE 42.98, -1.08, -2.5%) underperformed. The S&P 500 health care sector was unchanged.
In earnings news, Fastenal (FAST 30.36, -0.89, -2.9%) disappointed investors by missing profit estimates. Delta Air Lines (DAL 60.16, +0.69, +1.2%), on the other hand, reported better-than-expected results and raised its full-year guidance.
Reviewing Thursday's economic data, which included the Consumer Price Index for June, the weekly MBA Mortgage Applications Index, and the Treasury Budget for June:
Total CPI increased 0.1% m/m in June (Briefing.com consensus 0.0%) while core CPI, which excludes food and energy, rose 0.3% (Briefing.com consensus +0.2%). On a yr/yr basis, total CPI was up 1.6%, versus 1.8% in May, while core CPI was up 2.1%, versus 2.0% in May.
The key takeaway from the report was that the yr/yr uptick in core CPI should seemingly diminish the prospect of a 50-basis points rate cut at the July meeting.
Initial claims for the week ending July 6 decreased by 13,000 to 209,000 (Briefing.com consensus 222,000). Continuing claims for the week ending June 29 jumped by 27,000 to 1.723 million.
The key takeaway from the report is that it continues to reflect a tight labor market where employers are reluctant to let go of employees.
The Treasury Budget for June showed a deficit of $8.5 billion versus a deficit of $74.8 billion for the same period one year ago. The Treasury Budget is not seasonally adjusted, so the June deficit cannot be compared to the $207.7 billion deficit for May.
The fiscal year-to-date deficit is $747.1 billion versus a deficit of $607.1 billion for the same period ago. The budget deficit over the last 12 months is $919 billion, versus $985.4 billion for the 12 months ending in May.
Looking ahead, investors will receive the Producer Price Index for June on Friday.
Nasdaq Composite +23.5% YTD
S&P 500 +19.7% YTD
Dow Jones Industrial Average +16.1% YTD
Russell 2000 +15.5% YTD
Stock market hits new highs after Powell boosts rate-cut expectations
10-Jul-19 16:15 ET
Dow +76.71 at 26860.29, Nasdaq +60.80 at 8202.53, S&P +13.44 at 2993.07
https://www.briefing.com/investor/markets/stock-market-update/2019/7/10/stock-market-hits-new-highs-after-powell-boosts-ratecut-expectations.htm
[BRIEFING.COM] The S&P 500 gained 0.5% on Wednesday, briefly surpassing 3000 for the first time after Fed Chair Powell fueled the market's expectations for a rate cut at the July 30-31 FOMC meeting. The Dow Jones Industrial Average (+0.3%) and the Nasdaq Composite (+0.8%) also set new intraday highs with the Nasdaq finishing at a record close. The Russell 2000 increased 0.2%.
Fed Chair Powell took to Capitol Hill for his semiannual testimony on monetary policy, but the market didn't have to wait for it to begin to hurriedly leap to record highs. The market received Mr. Powell's prepared remarks before his testimony, and the market interpreted the written statement as a strong case for at least a 25-basis points rate cut given the uncertainty in the economic outlook.
There was already a 100% implied likelihood for a 25-basis points cut in the fed funds rate prior to today, according to the fed funds futures market. The probability for a 50-basis points cut, however, did increase to 26.6% from 3.3% yesterday. Contributing to the recalculation was Fed Chair Powell saying that the stronger-than-expected June employment report did not alter the Fed's mindset, contrary to the market's thinking last Friday.
The dovish tone helped eight of the 11 S&P 500 sectors finish higher. The S&P 500 energy sector (+1.4%) led the advance, buoyed by higher oil prices ($60.48/bbl, +$2.69, +4.7%) amid bullish inventory data and supply disruption in the Gulf of Mexico. The financials (-0.5%), industrials (-0.3%), and materials (-0.2%) sectors were the only sectors that finished lower.
The Fed also released the minutes from the June FOMC meeting, although market reaction was muted as Fed Chair Powell's comments provided a more updated view on monetary policy. Mr. Powell will head back to Congress tomorrow to conclude his testimony.
Shorter-dated U.S. Treasuries increased noticeably on growing expectations for a sharp rate cut, driving the 2-yr yield down eight basis points to 1.82%. The 10-yr yield increased one basis point to 2.06%. The U.S. Dollar Index declined 0.4% to 97.10.
Separately, American Airlines (AAL 32.94, +0.58, +1.8%) was a notable gainer on Wednesday after it raised its Q2 guidance for unit revenue and pre-tax margin. Deere (DE 160.81, -2.54) fell 1.6% after UBS downgraded the stock to Neutral from Buy, although it did raise its price target to $167.
Reviewing Wednesday's economic data, which included Wholesale Inventories for May and the weekly MBA Mortgage Applications Index:
Wholesale inventories increased 0.4% in May, as expected, on top of an unrevised 0.8% increase for April. Wholesale sales increased 0.1% following an unrevised 0.4% decline in April.
The key takeaway from the report is that inventory growth continues to outpace sales growth on a year-over-year basis, which should help keep price pressures in check.
The weekly MBA Mortgage Applications Index declined 2.4% following a 0.1% decline in the prior week.
Looking ahead, investors will receive the Consumer Price Index for June, the weekly Initial and Continuing Claims report, and the Treasury Budget for June on Thursday.
Nasdaq Composite +23.6% YTD
S&P 500 +19.4% YTD
Russell 2000 +16.1% YTD
Dow Jones Industrial Average +15.1% YTD
S&P 500 ekes out gain ahead of Powell testimony
09-Jul-19 16:20 ET
Dow -22.65 at 26783.58, Nasdaq +43.35 at 8141.73, S&P +3.68 at 2979.63
https://www.briefing.com/investor/markets/stock-market-update/2019/7/9/s-and-p-500-ekes-out-gain-ahead-of-powell-testimony-.htm
[BRIEFING.COM] The S&P 500 increased 0.1% on Tuesday, as shares of large-cap technology stocks helped the stock market overcome a slow start. Overall, there appeared to be a wait-and-see mindset for potential market-moving catalysts this week, including Fed Chair Powell's semiannual monetary policy testimony on Capitol Hill tomorrow.
The Nasdaq Composite increased 0.5%, and the Russell 2000 increased 0.1%. The Dow Jones Industrial Average (-0.1%), however, lost ground as shares of 3M (MMM 165.70, -3.49, -2.1%) underperformed after the stock was downgraded to Sector Perform from Outperform at RBC Capital Mkts.
The stock market's lowest levels of the day came at the open, but investors quickly bought the dip, lifting the major indices from session lows. It still looked like the S&P 500 would close lower for the third straight day, though, until a swarm of buyers in the last 30 minutes of action helped stocks close near session highs.
Solid gains in the FAANG stocks -- Facebook (FB 199.21, +3.45, +1.8%), Apple (AAPL 201.24, +1.22, +0.6%), Amazon (AMZN 1988.30, +35.98, +1.8%), Netflix (NFLX 379.93, +3.77, +1.0%), and Alphabet (GOOG 1124.83, +8.48, +0.8%) -- contributed to the positive disposition. The S&P 500 real estate sector (+0.5%) was Tuesday's best-performing sector.
On the downside, the materials (-1.0%), consumer staples (-0.6%), and industrials (-0.2%) sectors were the lone sectors that finished lower. PepsiCo's (PEP 131.74, -0.82, -0.6%) better-than-expected earnings results were unable to stir further buying interest in the stock or the consumer staples sector.
In other corporate news, Acacia Communications (ACIA 64.91, +16.85, +35.1%) agreed to be acquired by Cisco (CSCO 56.34, +0.15, +0.3%) for $2.6 billion, or $70 per share, in cash. The deal represented a 46% premium to ACIA's closing price on Monday.
Separately, USTR Lighthizer and Treasury Secretary Mnuchin spoke to China's Vice Premier Liu He on Tuesday, according to CNBC. Market reaction was muted, as it was expected that there would be a phone call this week to continue trade talks.
U.S. Treasuries finished slightly lower in another tight-ranged session. The 2-yr yield increased one basis point to 1.90%, and the 10-yr yield increased two basis points to 2.05%. The U.S. Dollar Index advanced 0.1% to 97.51. WTI crude increased 0.7% to $57.79/bbl.
Reviewing Tuesday's economic data, which included NFIB Small Business Optimism Index for June and the JOLTS - Job Opening report for May.
The NFIB Small Business Optimism Index for June decreased to 103.3 from 105.0 in May.
The May Job Openings and Labor Turnover Survey showed that job openings decreased to 7.323 million from a revised 7.372 million (from 7.449 million) in April.
Looking ahead, investors will receive the FOMC Minutes from the June meeting, the Wholesale Inventories for May, and the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +22.7% YTD
S&P 500 +18.9% YTD
Russell 2000 +15.8% YTD
Dow Jones Industrial Average +14.8% YTD
Stocks lose ground amid analyst downgrades, dampened rate-cut hopes
08-Jul-19 16:25 ET
Dow -115.89 at 26806.23, Nasdaq -63.41 at 8098.38, S&P -14.46 at 2975.95
https://www.briefing.com/investor/markets/stock-market-update/2019/7/8/stocks-lose-ground-amid-analyst-downgrades-dampened-ratecut-hopes.htm
[BRIEFING.COM] The S&P 500 lost 0.5% on Monday, pressured by analyst downgrades and waning hopes for a 50-basis points rate cut at the end of the month. With the major indices near record highs, investors adopted a cautious mindset in front of speeches from several Fed officials this week.
The Dow Jones Industrial Average lost 0.4%, the Nasdaq Composite lost 0.8%, and the Russell 2000 lost 0.9%.
With more market participants presumably back from the holiday break, the market had a more comprehensive day to digest the better-than-expected June employment report that was released on Friday. Unlike Friday, though, where stocks rallied from session lows despite the subdued rate-cut expectations, Monday's session exhibited a lack of buying conviction.
Contributing to this lack of conviction were a slew of negative-minded analyst recommendations, which featured Apple (AAPL 200.02, -4.21, -2.1%) being downgraded to Sell from Neutral at Rosenblatt. Morgan Stanley, meanwhile, downgraded global equities to Underweight from Equal-Weight, citing a poor outlook for equities over the next three months.
Weakness in Apple contributed to the underperformance in the S&P 500 information technology sector (-0.7%). Losses from the materials (-1.1%), communication services (-0.9%), health care (-0.8%), industrials (-0.7%), and financials (-0.6%) sectors also hindered the broader market.
Selling was kept in check though, with the real estate sector (+0.4%) providing offsetting support, as the market was able to stay above Friday's session lows.
The market also appeared willing to wait to hear from several Fed officials throughout the week. Fed Chair Powell will speak three times this week, but most attention will likely be centered on his semi-annual monetary policy testimony on Capitol Hill on Wednesday and Thursday.
In other corporate news, shares of Boeing (BA 351.12, -4.74, -1.3%) underperformed the broader market amid news that a Saudi airline opted out of $5.9 billion 737 Max order in favor of Airbus.
U.S. Treasuries finished little changed in a quiet session. The 2-yr yield increased one basis point to 1.89%, and the 10-yr yield declined one basis point to 2.03%. The U.S. Dollar Index increased 0.1% to 97.41. WTI crude increased 0.2% to $57.40/bbl.
Reviewing Monday's lone economic data, the Consumer Credit report for May:
Consumer credit increased by $17.1 billion in May (Briefing.com consensus $17.7 billion) on the heels of an unrevised $17.5 billion in April.
The key takeaway from the report is that the increase was driven by growth in both nonrevolving and revolving credit.
Looking ahead, investors will receive the NFIB Small Business Optimism Index for June and the JOLTS - Job Opening report for May on Tuesday.
Nasdaq Composite +22.1% YTD
S&P 500 +18.7% YTD
Russell 2000 +15.8% YTD
Dow Jones Industrial Average +14.9% YTD
Shortened Week Ends on Slightly Lower Note
05-Jul-19 16:20 ET
Dow -43.88 at 26922.12, Nasdaq -8.44 at 8161.79, S&P -5.41 at 2990.41
https://www.briefing.com/investor/markets/stock-market-update/2019/7/5/shortened-week-ends-on-slightly-lower-note.htm
[BRIEFING.COM] The stock market ended the week on a lower note, though the final standing represented a significant improvement from morning action when the S&P 500 was down as much as 0.9%. The benchmark index narrowed its loss to 0.2% by the close while Nasdaq (-0.1%) and Russell 2000 (+0.2%) outperformed. The Dow Jones Industrial Average (-0.2%) settled in line with the benchmark index.
Equities stumbled out of the gate after a much stronger than expected headline reading of the June Employment Situation report (actual 224,000; Briefing.com consensus 160,000) dashed hopes for aggressive action from the FOMC.
The solid report served as another reminder that the U.S. economy continues holding up well against a backdrop of slowing activity elsewhere. Today's news weighed on Treasuries, sending the 10-yr yield higher by ten basis points to 2.05%, while the implied likelihood of a 50-basis point rate cut fell to just 4.9% from 29.2% on Wednesday. The fed funds futures market remains certain that a 25-basis point cut will take place on July 31.
In addition to weighing on Treasuries, the jobs report boosted the dollar, lifting the U.S. Dollar Index to its 50-day moving average (97.27). The Index gained 1.2% this week and is now within 0.6% of its high from June.
The major averages retreated through the first hour of the session, but the market found support shortly after the S&P 500 dipped to its starting level from Monday. The next few hours saw a steady rebound, which ran into resistance near Wednesday's closing levels.
Seven out of eleven sectors ended the day in negative territory. Countercyclical real estate (-0.6%) and health care (-0.7%) settled at the bottom of the leaderboard with health care pressured by biotech names after President Trump said that his administration is preparing a "favored-nations clause" that would reduce prices that Medicare pays for drugs. The iShares Nasdaq Biotechnology ETF (IBB 109.22, -1.71, -1.5%) narrowed this week's gain to just 0.2%.
The top-weighted technology sector (-0.2%) settled in line with the broader market as relative strength in largest sector components outweighed continued weakness among chipmakers. The PHLX Semiconductor Index lost 0.6% with 24 of its 30 components ending in the red. AMD (AMD 31.50, +0.31, +1.0%) was among the outperformers amid speculation that the company's newest video cards that will become available on Sunday will challenge corresponding offerings from NVIDIA (NVDA 160.23, -2.52, -1.6%) when it comes to price and performance.
On the upside, financials (+0.4%) spent the bulk of the session in the green, as the uptick in Treasury yields and the continued strength in employment data fostered the thought that banks may be able to keep their net interest margins at healthy levels.
The communications sector (+0.2%) also outperformed, ending the week ahead of the remaining ten groups with a gain of 2.7%.
Today's investor participation was well below average, as fewer than 600 million shares changed hands at the NYSE floor.
Reviewing the June Employment Situation Report:
June nonfarm payrolls increased by 224,000 (Briefing.com consensus 160,000). Over the past three months, job gains have averaged 171,000 per month. May nonfarm payrolls revised to 72,000 from 75,000
June private sector payrolls increased by 191,000 (Briefing.com consensus 147,000) while May private sector payrolls revised to 83,000 from 90,000
June unemployment rate was 3.7% (Briefing.com consensus 3.6%), versus 3.6% in May
Persons unemployed for 27 weeks or more accounted for 23.7% of the unemployed versus 22.4% in May
The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 7.2%, versus 7.1% in May
June average hourly earnings were up 0.2% (Briefing.com consensus +0.3%), after increasing an upwardly revised 0.3% (from 0.2%) in May
Over the last 12 months, average hourly earnings have risen 3.1%, versus 3.2% for the 12 months ending in May
The average workweek in June was 34.4 hours (Briefing.com consensus 34.4), unchanged from May
Manufacturing workweek was up 0.1 hour to 40.7 hours
Factory overtime was unchanged at 3.4 hours The labor force participation rate was 62.9% in June versus 62.8% in May
Monday's economic data will be limited to the 15:00 ET release of May Consumer Credit (Briefing.com consensus $17.70 bln; prior $17.50 bln).
Nasdaq Composite +23.0% YTD
S&P 500 +19.3% YTD
Russell 2000 +16.8% YTD
Dow Jones Industrial Average +15.4% YTD
Dow, S&P 500, and Nasdaq Settle at Fresh Records
03-Jul-19 13:15 ET
Dow +179.32 at 26966.00, Nasdaq +61.14 at 8170.23, S&P +22.81 at 2995.82
https://www.briefing.com/investor/markets/stock-market-update/2019/7/3/dow-s-and-p-500-and-nasdaq-settle-at-fresh-records.htm
[BRIEFING.COM] The stock market finished the abbreviated pre-holiday session on a firmly higher note. A daylong upward drift helped the Dow (+0.7%), S&P 500 (+0.8%), and Nasdaq (+0.8%) settle at fresh record highs.
Today's session was not particularly active, but a heavy batch of mostly disappointing economic data provided fuel for a rally based on the assumption that a weakening economic picture will prompt the Federal Reserve to cut the fed funds rate. While the market has been emboldened by that view, it should be noted that historically speaking, the first rate cut has not been a positive event for equities going forward. On a side note, President Trump nominated Christopher Waller and Judy Shelton the Federal Reserve's Board of Governors. Mr. Waller previously served as the Executive Vice President of the Federal Reserve Bank of St. Louis while Ms. Shelton is one of the president's economic advisors.
All eleven sectors ended Wednesday in the green, but like yesterday, the advance was paced by countercyclical groups. Real estate (+1.5%), consumer staples (+1.4%), and utilities (+0.8%) jumped out to an early lead, maintaining their position until the close. Gains in these rate-sensitive sectors were supported by continued strength in Treasuries of longer tenors. The bond market will remain open until 14:00 ET, but the 10-yr yield (-2 bps to 1.95%) and the 30-yr yield (-4 bps to 2.47%) are almost certain to finish the day at fresh lows for the year.
High-beta groups had a mixed showing today. The Dow Jones Transportation Average climbed 1.0% with airlines pacing the advance after yesterday's guidance boost at Delta Air Lines (DAL 59.15, +0.61, +1.0%). United Airlines (UAL 90.67, +1.80, +2.0%) was the group's top performer.
Chipmakers underperformed once again. The PHLX Semiconductor Index lost 0.4%, trimming this week's gain to 0.8%. Broadcom (AVGO 284.89, -10.44, -3.5%) was the weakest performer, falling 3.5% after Bloomberg reported that the company is in advanced talks to acquire Symantec (SYMC 25.10, +3.00, +13.6%). The broader technology sector (+0.7%) settled just behind the broader market.
In other M&A news, Sprint (S 6.98, +0.10, +1.5%) rallied amid reports that the company's merger with T-Mobile (TMUS 75.82, +0.34, +0.5%) is likely to be approved by the Department of Justice.
Shares of Tesla (TSLA 234.90, +10.35, +4.6%) settled higher after the company reported a larger than expected number of total deliveries in Q2.
Participants received a full slate of economic data today:
The ISM Non-Manufacturing Index dropped to 55.1% in June (Briefing.com consensus 55.8%) from 56.9% in May. The dividing line between expansion and contraction is 50.0%.
The key takeaway from the report is that it points to a slowdown in growth in the non-manufacturing sector, which accounts for the vast majority of U.S. economic activity. The June reading marks the lowest level for the index since July 2017.
Factory orders declined 0.7% in May (Briefing.com consensus -0.5%) after declining a downwardly revised 1.2% (from -0.8%) in April. This is the third decline in factory orders over the past four months.
The key takeaway from the report is that orders for nondefense capital goods orders, excluding aircraft -- a proxy for business spending -- increased 0.5% versus a 0.4% increase seen in the advance durable goods orders report.
The U.S. trade deficit widened to $55.5 billion in May (Briefing.com consensus -$54.4B) from a downwardly revised $51.2 billion (from -$50.8 billion) in April. Exports were $4.2 billion more than April exports while imports were $8.5 billion more than April imports.
The key takeaway from the report is that the average real trade deficit in the second quarter is 2.3% greater than the first quarter average, which is a negative for the Q2 GDP growth outlook.
Initial claims for the week ending June 29 decreased by 8,000 to 221,000 (Briefing.com consensus 222,000). Continuing claims for the week ending June 22 also decreased by 8,000 to 1.686 million.
The key takeaway from the report is that initial claims continue to run at relatively low levels, which suggests employers remain reluctant to reduce the size of their workforce.
Bond and equity markets will be closed for Independence Day tomorrow. On Friday, June Nonfarm Payrolls (Briefing.com consensus 160,000; prior 75,000), Nonfarm Private Payrolls (Briefing.com consensus 147,000; prior 90,000), Average Hourly Earnings (Briefing.com consensus 0.3%; prior 0.2%), Unemployment Rate (Briefing.com consensus 3.6%; prior 3.6%), and Average Workweek (Briefing.com consensus 34.4; prior 34.4) will be reported at 8:30 ET
Nasdaq Composite +23.1% YTD
S&P 500 +19.5% YTD
Russell 2000 +16.6% YTD
Dow Jones Industrial Average +15.6% YTD
S&P 500 Climbs While Small Caps Lag
02-Jul-19 16:15 ET
Dow +69.25 at 26786.68, Nasdaq +17.93 at 8109.09, S&P +8.68 at 2973.01
https://www.briefing.com/investor/markets/stock-market-update/2019/7/2/s-and-p-500-climbs-while-small-caps-lag.htm
[BRIEFING.COM] The Dow (+0.3%), Nasdaq (+0.2%), and S&P 500 (+0.3%) ended Tuesday on a modestly higher note thanks to a late push that lifted the indices out of the red. Relative weakness among small cap names sent the Russell 2000 lower by 0.6%.
Equity indices started the day near their flat lines while a modest wave of buying interest lifted the averages to session highs one hour after the open. However, the opening push saw limited participation from cyclical sectors, leading to a midday pullback. That lack of participation was most visible in the technology sector (+0.3%) where the PHLX Semiconductor Index lost 1.4%, trimming this week's gain to 1.2%. 22 out of 30 index members recorded losses of at least 1.0% while yesterday's leader—Inphi (IPHI 52.20, -1.47, -2.7%)—was the second weakest performer, falling 2.7%.
The broader technology sector was able to eke out a slim gain and its late strength helped send the key indices to fresh highs ahead of the close while most of the remaining cyclical sectors settled in the red. Financials (-0.2%) were pressured by renewed strength in Treasuries of longer tenors while energy (-1.7%) retreated amid a 4.8% drop in the price of oil. WTI crude fell beneath the confluence of its 50-day (58.72) and 200-day (58.74) moving averages, ending the day at its lowest level in eight sessions.
Elsewhere, relative weakness in the Dow Jones Transportation Average (-0.8%) kept the industrials sector (-0.1%) in negative territory. Delta Airlines (DAL 58.54, +0.75, +1.3%) bucked the trend among DJTA members, after boosting its Q2 guidance.
Staying on the earnings front, Greenbrier (GBX 28.71, -2.14, -6.9%) briefly slid to a fresh 2019 low after missing Q3 estimates and guiding Q4 results below expectations. Conversely, Amarin (AMRN 22.37, +3.13, +16.3%) rallied after issuing above-consensus guidance for Q2 and FY19.
Countercyclical sectors recorded gains across the board, which helped the S&P 500 stage its late rally. Rate-sensitive real estate (+1.8%) and utilities (+1.2%) finished in the lead.
Longer-dated Treasuries settled near their session highs while the 3-month bill underperformed with no apparent catalyst. The 10-yr yield fell six basis points to 1.98% while the 3-month yield rose three basis points to 2.19%.
Curiously, gold futures rallied to recover their entire decline from yesterday. The yellow metal settled higher by 1.5% at $1408.55/ozt and continued its advance after the 13:30 ET close of the pit session. The rally in gold accelerated after NBC reported that Vice President Mike Pence was called back to Washington just before his plane was about to touch down in New Hampshire. The vice president's spokeswoman later said that there is no cause for alarm while an unnamed White House official told Bloomberg that the reason for the return will be revealed "weeks from now."
On the international front, EU officials have agreed on nominees to top EU jobs. All nominations were in-line with this morning's report from Die Welt. Germany's Defense Minister Ursula von der Leyen was nominated to replace EU Commission President Jean-Claude Juncker while IMF Managing Director Christine Lagarde was nominated to take over for Mario Draghi at the ECB. Belgian Prime Minister Charles Michel was proposed as the replacement for EU Council President Tusk while Josep Borrell Fontelles was nominated to replace Federica Mogherini as the High Representative for Foreign Affairs and Security Policy. The nominees still need to be approved by the EU Parliament.
Investors did not receive any economic data of note. Tomorrow, the weekly MBA Mortgage Index (prior 1.3%) will be reported at 7:00 ET, followed by the June ADP Employment Change report (Briefing.com consensus 145,000; prior 27,000) at 8:15 ET. May trade balance (Briefing.com consensus -$54.40 bln; prior -$50.80 bln) and weekly Initial Claims (Briefing.com consensus 222,000; prior 227,000) will be reported at 8:30 ET while May Factory Orders (Briefing.com consensus -0.5%; prior -0.8%) and the June ISM Non-Manufacturing Index (Briefing.com consensus 55.8; prior 56.9) will be released at 10:00 ET.
Nasdaq Composite +22.2% YTD
S&P 500 +18.6% YTD
Russell 2000 +15.6% YTD
Dow Jones Industrial Average +14.8% YTD
Q3 Begins on Higher Note
01-Jul-19 16:15 ET
Dow +117.47 at 26717.43, Nasdaq +84.92 at 8091.16, S&P +22.57 at 2964.33
https://www.briefing.com/investor/markets/stock-market-update/2019/7/1/q3-begins-on-higher-note.htm
[BRIEFING.COM] The stock market began the week on a higher note, but the major averages were only able to keep a portion of their gains through the close. The S&P 500 gained 0.8% after being up 1.0% at the start while the tech-heavy Nasdaq rose 1.1% after starting the session with a 1.7% gain.
The strong open was owed to a positive view of Saturday's meeting between President Trump and China's President Xi Jinping. While the meeting did not yield concrete steps toward reaching a trade deal, it also did not lead to an escalation of the dispute. Instead, President Trump agreed to relax restrictions on sales of components to Huawei and agreed to not impose additional tariffs on imports from China at this time.
Stocks surged out of the gate with chipmakers leading the opening rally, which was not a surprise given the group's sensitivity to trade-related matters. The PHLX Semiconductor Index was up nearly 5.0% at the start of the session but trimmed its gain to 2.7% by the close. Huawei supplier Inphi (IPHI 53.67, +3.57, +7.1%) was the top performer within the group, rallying 7.1%. Semiconductor giant, Intel (INTC 48.05, +0.18, +0.4%), jumped above its 200-day moving average (48.85) at the start, but narrowed its gain to just 0.4% as the session wore on.
The technology sector (+1.5%) remained atop the leaderboard into the close, but like the rest of the market, the top-weighted group settled closer to its session low than its high.
Equities backed off their starting levels during intraday action, as optimism about the weekend outcome of the Trump-Xi meeting was partially offset by the realization that the economic situation in major export centers remains weak. To that point, China's Manufacturing PMI (actual 49.4) remained in contractionary territory in the final June reading, Japan's Manufacturing PMI decreased to 49.3 from 49.5, and the Manufacturing PMI for the eurozone slipped to 47.6 from 47.8. Adding insult to injury, South Korea reported that its exports decreased 13.5% yr/yr in June.
To be fair, the U.S. ISM Manufacturing Index also decreased in June (to 51.7 from 52.1), but it remained in expansionary territory, serving as a reminder that the U.S. economy is still a pocket of relative strength. On that note, the U.S. economic expansion entered its 121st consecutive month today, representing the longest expansionary streak on record.
Relative strength in U.S. data gave a boost to the U.S. Dollar Index, which climbed 0.7% to 96.82, reclaiming its 200-day moving average in the process.
Treasuries ended in the red with shorter tenors leading the retreat. The 10-yr yield rose three basis points to 2.03% while the 2-yr yield rose five basis points to 1.79%.
Today's economic data was limited to the June ISM Manufacturing Index and Construction Spending for May:
The ISM Manufacturing Index for June checked in at 51.7% (Briefing.com consensus 51.5%), down from 52.1% in May. The dividing line between expansion and contraction is 50.0%.
The key takeaway from the report is that it shows weakening manufacturing activity. June was the third straight month in which there was a decelerating pace of growth. This should capture the Fed's attention as it contemplates a rate-cut decision at its July 30-31 FOMC meeting.
Total construction spending declined 0.8% m/m in May (Briefing.com consensus 0.0%) following an upwardly revised 0.4% increase (from 0.0%) in April. Overall, construction spending was down 2.3% yr/yr.
The key takeaway from the report is that private construction spending remains noticeably weak, held back by a downturn in residential spending.
Market participants will not receive any noteworthy data tomorrow.
Nasdaq Composite +21.9% YTD
S&P 500 +18.3% YTD
Russell 2000 +16.4% YTD
Dow Jones Industrial Average +14.5% YTD
Stock market closes historic month higher in front of Trump-Xi meeting
28-Jun-19 16:20 ET
Dow +73.38 at 26599.96, Nasdaq +38.49 at 8006.24, S&P +16.84 at 2941.76
https://www.briefing.com/investor/markets/stock-market-update/2019/6/28/stock-market-closes-historic-month-higher-in-front-of-trumpxi-meeting.htm
[BRIEFING.COM] The S&P 500 gained 0.6% on Friday, wrapping up its best June since 1955 and closing out the quarter on a high note, as the market positioned itself for the G-20 meeting between President Trump and President Xi.
The Dow Jones Industrial Average increased 0.3%, the Nasdaq Composite increased 0.5%, and the Russell 2000 outperformed with a gain of 1.3%. On a related note, the annual rebalancing of the Russell indexes contributed to a surge in volume at the close.
End-of-the-quarter rebalancing likely factored into Friday's price action, but the market's top focus was the Trump-Xi meeting. That meeting will take place Friday night at around 10:30 p.m. ET. The consensus view was that the two sides would agree to keep talking and withhold any additional tariffs, which was an outcome that would seemingly satisfy the market.
The S&P 500 financials sector (+1.4%) had its own catalyst, rising on the back of bank stocks after the Fed did not object to the capital plans of 18 of the largest banking institutions. As a result, most of these firms will increase their quarterly dividends and buy back more of their outstanding shares.
The rest of the S&P 500 sectors also finished higher, buoyed by a last-minute pop into the close. The energy (+1.2%), industrials (+1.0%), and materials (+0.9%) sectors outperformed the broader market.
Shares of Apple (AAPL 197.92, -1.82, -0.9%) were under pressure after the company announced the departure of its long-time chief design officer, Jony Ives. Separately, The Wall Street Journal reported that Apple will move production of its new Mac Pro to China from the U.S.
In earnings news, Nike (NKE 83.95, +0.29, +0.4%) missed profit estimates for the first time in seven years, but it did calm some nerves after it maintained its full-year guidance. Constellation Brands (STZ 196.94, +8.73, +4.6%) pleased investors with its solid results and upbeat guidance.
U.S. Treasuries finished little changed on Friday. The 2-yr yield remained at 1.74%, and the 10-yr yield declined one basis point to 2.00%. The U.S. Dollar Index finished unchanged at 96.18. WTI crude fell 1.7% to $58.38/bbl after news that several EU nations set up a trade channel with Iran to avoid U.S. sanctions.
Reviewing Friday's economic data, which included the Personal Income and Spending report for May, the final reading for the University of Michigan Index of Consumer Sentiment for June, and the Chicago PMI for June:
Personal income increased 0.5% m/m in May (Briefing.com consensus 0.3%) and personal spending rose 0.4% m/m (Briefing.com consensus 0.4%) following an upwardly revised 0.6% increase (from 0.3%) for April. The PCE Price Index was up 0.2% m/m (Briefing.com consensus 0.2%) and so was the core PCE Price Index, which excludes food and energy (Briefing.com consensus 0.1%).
The key takeaway from the report is that there wasn't an acceleration in the yr/yr growth rate for either the PCE Price Index, which dipped to 1.5% from 1.6%, or the core PCE Price Index, which held steady at 1.6%. That will help maintain the stock market's belief that a rate cut is coming at the July 30-31 FOMC meeting.
The final June reading for the University of Michigan Index of Consumer Sentiment increased to 98.2 (Briefing.com consensus 97.9) from 97.9 in the preliminary reading. The June reading is down from 100.0 reported in May.
The key takeaway from the report is that respondents did not expect a significant increase in interest rates while lower mortgage rates begun positively impacting purchases of homes.
The Chicago PMI fell into contraction territory, dropping to 49.7 in June from 54.2 last month. A reading below 50.0 denotes a contraction.
Looking ahead, investors will receive the ISM Manufacturing Index for June and the Construction Spending report for May on Monday.
Nasdaq Composite +20.7% YTD
S&P 500 +17.4% YTD
Russell 2000 +16.2% YTD
Dow Jones Industrial Average +14.0% YTD
Stocks gain as investors await G-20 summit
27-Jun-19 16:15 ET
Dow -10.24 at 26526.58, Nasdaq +57.79 at 7967.75, S&P +11.14 at 2924.92
https://www.briefing.com/investor/markets/stock-market-update/2019/6/27/stocks-gain-as-investors-await-g20-summit.htm
[BRIEFING.COM] The S&P 500 advanced 0.4% on Thursday, snapping a four-session losing streak, as investors looked forward to the G-20 summit in Japan. Shares of financial companies led the broad-based advance, while energy stocks capped additional gains.
The Nasdaq Composite increased 0.7%, and the Russell 2000 increased 1.9%. The Dow Jones Industrial Average declined 0.1%, weighed down by shares of Boeing (BA 364.02, -10.92, -2.9%) after the company announced a setback for its 737 MAX update.
President Trump will meet with President Xi on the second day of the G-20 summit (Friday night in the U.S., Saturday morning in Japan), which will provide the market more clarity on the prospects for a deal. Reports today only added to the uncertainty and confusion in the market.
The South China Morning Post indicated that the two sides reached a trade truce to advance talks, but NEC Director Larry Kudlow said no specific agreements have been made prior to the summit. The Wall Street Journal also followed up, specifying that President Xi will outline a set of conditions to President Trump that the U.S. should meet in order to continue talks.
Despite the noise leading up to the meeting, the positive disposition in the market reflected some optimism that two sides can agree to keep talking without the imposition of new tariffs. Ten of the 11 S&P 500 sectors finished in the green, led by the financials (+0.9%), real estate (+0.7%), and health care (+0.6%) sectors. The energy sector (-0.8%) was the lone exception.
Boeing (BA 364.02, -10.92) was a notable laggard, losing 2.9% after it disclosed that the FAA asked it to address a risk that its 737 software patch overlooked. Boeing said that it will need an additional three months to fix the issue, raising some questions about its earnings outlook.
In earnings news, Walgreens Boots Alliance (WBA 54.52, +2.14, +4.1%) and KB Home (KBH 25.39, +1.86, +7.9%) both pleased investors with their results. Conagra Brands (CAG 25.43, -3.50, -12.1%), on the other hand, let investors down with disappointing earnings results and guidance.
U.S. Treasuries finished on a higher note, driving yields lower across the curve. The 2-yr yield and the 10-yr yield declined four basis points each to 1.74% and 2.01%, respectively. The U.S. Dollar Index was unchanged at 96.22. WTI crude increased 0.1% to $59.37/bbl.
Reviewing Thursday's economic data, which included the weekly Initial and Continuing Claims report, the third estimate for first quarter GDP, and Pending Home Sales for May:
The Department of Labor reported initial jobless claims for the week ending June 22 increased by 10,000 to 227,000 (Briefing.com consensus 219,000). Continuing claims for the week ending June 15 increased by 22,000 to 1.688 million.
The key takeaway from the report is that there hasn't been any meaningful change in the four-week moving average for initial claims, which remains at an encouragingly low level.
The third estimate for Q1 GDP was left unchanged at 3.1%, as expected, although the contribution to that estimate was altered. The GDP Price Deflator was up 0.9% (Briefing.com consensus 0.8%) after it was indicated to be up 0.8% in the second estimate.
The key takeaway from the report was the recognition that personal spending growth was revised down to 0.9% from 1.3% in the second estimate.
Pending Home Sales increased 1.1% in May (Briefing.com consensus +1.0%). Today's reading follows an unrevised 1.5% decline in April.
Looking ahead, investors will receive the following data on Friday: Personal Income and Spending for May, the PCE Price Index for May, the Chicago PMI for June, and the University of Michigan Index of Consumer Sentiment for June.
Nasdaq Composite +20.1% YTD
S&P 500 +16.7% YTD
Russell 2000 +14.7% YTD
Dow Jones Industrial Average +13.7% YTD
Stock market closes little changed, cyclical stocks gain
26-Jun-19 16:25 ET
Dow -11.40 at 26536.82, Nasdaq +25.25 at 7909.96, S&P -3.60 at 2913.78
https://www.briefing.com/investor/markets/stock-market-update/2019/6/26/stock-market-closes-little-changed-cyclical-stocks-gain.htm
[BRIEFING.COM] The S&P 500 declined 0.1% on Wednesday in a mixed session. Cyclical sectors provided the market some support, but weakness in the defensive-oriented sectors dragged on the broader market.
The Dow Jones Industrial Average (-0.04%) finished fractionally lower, and the Russell 2000 declined 0.2%. The Nasdaq Composite increased 0.3%
The stock market's best levels of the day came shortly after the opening bell, as many headlines called attention to Treasury Secretary Steven Mnuchin's optimistic tone in a morning interview with CNBC. It should be noted, though, that Mr. Mnuchin simply reiterated that the U.S. was 90% close to a deal, which he said in April, and that there remains a path to a deal.
It wasn't too surprising to see the market react positively to old trade news in front of the highly-anticipated G-20 summit this weekend. That summit could bring potential market-moving news but given the uncertainty of the outcome, and the market re-calculating the Fed's rate decision next month, the mood in the market felt less enthusiastic.
The broader market finished little changed, but there were some big moves in the S&P 500 sectors. The defensive-oriented utilities (-2.2%), real estate (-2.0%), consumer staples (-1.4%), and health care (-1.3%) sectors declined noticeably. These sectors, except health care, may have gotten overvalued heading into end-of-the-quarter re-balancing.
The cyclical energy (+1.5%), information technology (+1.1%), consumer discretionary (+0.4%), and industrials (+0.2%) sectors were the lone sectors to finish higher on Wednesday.
Higher oil prices ($59.37/bbl, +$1.53, +2.6%) fueled broad-based buying in the energy space after the EIA released some bullish inventory data. The tech sector derived its strength from shares of Apple (AAPL 199.80, +4.23, +2.2%) and many of the semiconductor stocks, which outperformed after Micron (MU 37.04, +4.36, +13.3%) pleased investors with solid quarterly results and better-than-feared guidance. The Philadelphia Semiconductor Index advanced 3.2%.
In other earnings news, investors were able to overlook downside earnings guidance from FedEx (FDX 159.92, +3.94, +2.5%), suggesting that much of the bad news may have already been priced-in to the stock's recent underperformance. FedEx also beat earnings estimates. General Mills (GIS 51.31, -2.39, -4.5%), on the other hand, disappointed investors with a revenue miss.
U.S. Treasuries finished on a lower note, driving yields higher across the curve. The 2-yr yield increased four basis points to 1.78%, and the 10-yr yield increased six basis points to 2.05%. The U.S. Dollar Index increased 0.1% to 96.22.
Reviewing Wednesday's economic data, which included Durable Goods Orders for May, the weekly MBA Mortgage Applications Index, and the Advance reports for International Trade in Goods, Wholesale Inventories, and Retail Inventories for May:
Total durable goods orders declined 1.3% in May (Briefing.com consensus -0.3%) after declining 2.8% in April, yet orders, excluding transportation, increased 0.3% (Briefing.com consensus 0.1%) after dropping 0.1% in April.
The key takeaway from the report is that shipments of nondefense capital goods, excluding aircraft -- which factors into GDP forecasts -- increased 0.7% on the heels of a 0.4% increase in April while new orders for nondefense capital goods, excluding aircraft -- a proxy for business spending -- rose 0.4% after declining 1.0% in April.
The weekly MBA Mortgage Applications Index increased 1.3% following a 3.4% decline in the prior week.
The Advance report for International Trade in Goods for May showed a deficit of $74.5 billion following a revised deficit of $70.9 billion (from $72.1 billion). The Advance report for Wholesale Inventories for May increased 0.4%, and the Advance report for Retail Inventories for May increased 0.5%.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report, the third estimate for first quarter GDP, and Pending Home Sales for May on Thursday.
Nasdaq Composite +19.2% YTD
S&P 500 +16.2% YTD
Russell 2000 +12.6% YTD
Dow Jones Industrial Average +13.8% YTD
Stocks lose ground on subdued expectations for rate cut, G-20 summit
25-Jun-19 16:20 ET
Dow -179.32 at 26548.22, Nasdaq -120.98 at 7884.71, S&P -27.97 at 2917.38
https://www.briefing.com/investor/markets/stock-market-update/2019/6/25/stocks-lose-ground-on-subdued-expectations-for-rate-cut-g20-summit.htm
[BRIEFING.COM] The S&P 500 lost 1.0% on Tuesday, as subdued expectations for next month's Fed rate decision and the upcoming G-20 summit contributed to a risk-off mindset. Shares of technology companies, particularly the mega-cap stocks, underperformed the broader market.
The Nasdaq Composite lost 1.5%, the Dow Jones Industrial Average lost 0.7%, and the Russell 2000 lost 0.6%.
St. Louis Fed President James Bullard (FOMC voter), who was the lone dissident in this month's FOMC meeting, said he didn't think it was necessary to cut the fed funds rate by 50 basis points. Instead, he favored a 25 basis points reduction, viewing it as an "insurance" cut.
This stance from one of the Fed's most vocal doves, in addition to comments from Fed Chair Powell, tempered the market's hopes for a 50 basis points cut next month. Fed Chair Powell reminded the market that monetary policy should not overreact to any individual data point or short-term swings in sentiment.
Expectations for the upcoming G-20 summit were also lowered after a White House official told Reuters that the U.S. will not accept any new tariff conditions and that the U.S. is not willing to concede to the Chinese on trade. The goal is to simply reopen talks, which was not the constructive tone the market was anticipating.
These subdued expectations, along with some disappointing economic data, contributed to some broad-based profit taking in equities. Ten of the 11 S&P 500 sectors finished lower, led by the mega-cap stocks within the information technology (-1.8%), communication services (-1.6%), and consumer discretionary (-1.1%) sectors. The materials sector was unchanged.
Regarding economic data, new home sales for May and consumer sentiment for June both declined below expectations. On a related note, home construction company Lennar (LEN 48.22, -3.19, -6.2%) provided investors with downside Q3 guidance.
In M&A news, the health care sector (-0.4%) was home to a mega-merger deal on Tuesday. AbbVie (ABBV 65.70, -12.75, -16.3%) announced it will acquire Allergan (AGN 162.43, +32.86, +25.4%) for about $63 billion, or $188.24 per share, in cash and stock. With shares of AbbVie losing over 16%, the premium was reduced to 37% over AGN's closing price on Monday.
U.S. Treasuries finished on a mostly higher note. The 2-yr yield was unchanged at 1.74%, and the 10-yr yield declined three basis points to 1.99%. The U.S. Dollar Index increased 0.2% to 96.16. WTI crude was unchanged at $57.81/bbl.
Reviewing Tuesday's economic data:
The Conference Board's Consumer Confidence Index fell to 121.5 in June (Briefing.com consensus 132.0) from a downwardly revised 131.3 (from 134.1) in May. The index is at its lowest level since September 2017.
The key takeaway from the report is that it reflects growing concern about trade tensions among consumers that had been previously lacking, but which had been showing up in business confidence surveys. Flagging confidence on the part of businesses and consumers alike, if it is sustained, is an adverse development for the growth outlook.
New home sales declined 7.8% m/m in May to a seasonally adjusted annual rate of 626,000 (Briefing.com consensus 683,000) from an upwardly revised 679,000 (from 673,000) in April.
The key takeaway from the report is that demand was relatively soft despite a drop in mortgage rates and a 2.8% yr/yr decline in the median sales price of $308,000.
The FHFA Housing Price Index for April increased 0.4% (Briefing.com consensus 0.2%) following an unrevised 0.1% increase in March.
The S&P Case-Shiller Home Price Index for April increased 2.5% as expected after increasing a revised 2.6% in March (from 2.7%).
Looking ahead, investors will receive the following reports on Wednesday: Durable Goods Orders for May, the weekly MBA Mortgage Applications Index, and the Advance reports for International Trade in Goods, Retail Inventories, and Wholesales Inventories for May.
Nasdaq Composite +18.8% YTD
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S&P 500 closes slightly lower in mixed session
24-Jun-19 16:20 ET
Dow +8.41 at 26727.54, Nasdaq -26.01 at 8005.69, S&P -5.11 at 2945.35
https://www.briefing.com/investor/markets/stock-market-update/2019/6/24/s-and-p-500-closes-slightly-lower-in-mixed-session-.htm
[BRIEFING.COM] The S&P 500 declined 0.2% on Monday, finishing near session lows in a day that showed little conviction from investors. With big gains already registered in June and the G-20 summit set to begin at the end of the week, the broader market appeared content trading little changed for most of the session.
The Dow Jones Industrial Average (+0.03%) finished fractionally higher, while the Nasdaq Composite lost 0.3%. The Russell 2000 underperformed with a loss of 1.3%.
President Trump and President Xi are expected to partake in an extended meeting at G-20, which many see as a potential market-moving event. Although many analysts aren't expecting a swift resolution to the trade dispute this weekend, there is still optimism that progress can be made.
It was a mixed session with six S&P 500 sectors finishing lower and five finishing higher. The energy sector (-0.9%) gave back some of its gains from last week, while the consumer discretionary sector (-0.5%) was dragged lower by many stocks within the SPDR S&P Retail ETF (XRT 41.67, -0.65, -1.5%). The materials (+0.5%), consumer staples (+0.3%), and information technology (+0.2%) sectors provided offsetting support.
The health care sector (-0.5%) was pressured by the insurance and hospital stocks after President Trump signed an executive order to make health care costs more transparent to patients. Shares of Bristol-Myers (BMY 45.68, -3.66, -7.4%) also underperformed amid a host of negative news, one of which included an announcement that its acquisition of Celgene (CELG 93.47, -5.44, -5.5%) will be pushed back to the end of 2019 or beginning of 2020.
On a related note, President Trump signed a separate executive order, hitting Iran with new sanctions after it shot down a U.S. military last week. Market reaction was muted, as President Trump already indicated last week that more sanctions were coming.
In M&A news, Caesars Entertainment (CZR 11.44, +1.45, +14.5%) confirmed it will be acquired by Eldorado Resorts (ERI 45.77, -5.45, -10.6%) for $12.75/share in cash and stock, or approximately $8.6 billion.
U.S. Treasuries finished on a higher note, pushing yields lower across the curve. The 2-yr yield declined four basis points to 1.74%, and the 10-yr yield declined five basis points to 2.02%. The U.S. Dollar Index declined 0.2% to 96.00 for its fourth consecutive decline. WTI crude increased 0.8% to $57.82/bbl.
Investors did not receive any economic data on Monday. On Tuesday, investors will receive New Home Sales for May, the Conference Board's Consumer Confidence Index for June, the FHFA Housing Price Index for April, and the S&P Case-Shiller Home Price Index for April.
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S&P 500 +17.5% YTD
Russell 2000 +13.5% YTD
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Stocks cap strong week on slightly lower note
21-Jun-19 16:20 ET
Dow -34.04 at 26719.13, Nasdaq -19.63 at 8031.70, S&P -3.72 at 2950.46
https://www.briefing.com/investor/markets/stock-market-update/2019/6/21/stocks-cap-strong-week-on-slightly-lower-note.htm
[BRIEFING.COM] The stock market finished slightly lower on this quadruple-witching expiration Friday, as it cooled off from a big stretch of gains. The S&P 500 declined 0.1%, but it did set a new intraday high (2964.63) and finished the week higher by 2.2%.
The Dow Jones Industrial Average (-0.1%) and the Nasdaq Composite (-0.2%) trimmed their weekly gains to 2.4% and 3.0%, respectively. The Russell 2000 (-0.9%) underperformed but still finished the week with a gain of 1.8%.
It was a tight-ranged session with neither buyers nor sellers showing much conviction. Indications that the Fed and other central banks are leaning more dovish remained a measure of support for equities, which contributed to a flattish session instead of a pullback.
The S&P 500 energy (+0.8%), utilities (+0.5%), health care (+0.4%), and communication services (+0.4%) sectors were today's best performers. The real estate (-1.1%), industrials (-0.5%), and information technology (-0.5%) sectors trailed the pack.
Energy stocks continued to benefit from higher oil prices ($57.37/bbl, +$0.25, +0.4%) and also from an explosion at the East Coast's largest refinery on Friday. The move in oil wasn't that noticeable, especially considering it was only a fraction of its 9% weekly gain, but the underlying geopolitical driver had some investors feeling cautious.
After Iran shot down a U.S. military drone on Thursday, President Trump said he ordered a retaliatory strike on Tehran but scrapped the plans ten minutes prior to launch. Mr. Trump said he didn't think the damage inflicted would have been proportional to shooting down an unmanned drone.
Separately, Reuters reported that the Department of Commerce barred several more Chinese supercomputing companies from purchasing parts from U.S. companies. The Philadelphia Semiconductor Index lost 0.7%.
The news provided mixed signals ahead of planned talks with China next week. Earlier in the day, Vice President Mike Pence canceled a Monday speech that was expected to carry a hawkish tone, suggesting that the U.S. did not want to upset Beijing before the G-20 summit.
U.S. Treasuries backtracked from their best levels of the year, driving yields higher across the curve. The 2-yr yield increased six basis points to 1.78%, and the 10-yr yield increased seven basis points to 2.07%. The U.S. Dollar Index lost 0.4% to 96.20.
Reviewing Friday's lone economic report, Existing Home Sales for May:
Existing home sales increased 2.5% month-over-month in May to a seasonally-adjusted annual rate of 5.34 million (Briefing.com consensus 5.30 million) from an upwardly revised 5.21 million (from 5.19 million) in April. Total sales were 1.1% lower than the same period a year ago.
The key takeaway from the report is that the drop in mortgage rates spurred increased sales activity. At the same time, though, the lower rates drove increased demand that helped push the median home price to a record high in an inventory-constrained market.
Investors will not receive any economic data on Monday.
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