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Market Wrapped Up in Holiday Trade
22-Nov-17 16:15 ET
Dow -64.65 at 23526.18, Nasdaq +4.88 at 6867.35, S&P -1.95 at 2597.08
https://www.briefing.com/investor/markets/stock-market-update/2017/11/22/market-wrapped-up-in-holiday-trade.htm
[BRIEFING.COM] The trading day is done, and for many participants, it was over before it began. The low trading volume said as much, as did the small changes in the major indices which held to tight trading ranges throughout the session.
Price returns ranged from down 0.3% for the Dow Jones Industrial Average to up 0.1% for the Nasdaq Composite, which established another record high.
The lack of concerted movement was not surprising considering the large gains registered on Tuesday left many participants convinced that the turkey-day work was done and that the time had arrived to settle in for the Thanksgiving holiday. Markets will be closed on Thursday and the stock and bond markets will have early closes at 1:00 p.m. ET and 2:00 p.m. ET, respectively, on Friday.
While there wasn't much movement today at the index level, there were some notable moves in individual stocks. Standouts in that regard include the likes of Deere & Co. (DE 145.33, +6.10, +4.4%), Hewlett-Packard Enterprise (HPE 13.10, -1.02, -7.2%), GameStop (GME 17.38, +0.65, +3.9%), and Guess? (GES 15.62, -2.33, -13.0%), all of which reported earnings results after yesterday's close.
Separately, there was notable strength in shares of Apple (AAPL 174.96, +1.82, +1.1%) and Amazon.com (AMZN 1156.16, +16.67, +1.5%), both of which are expected to be big beneficiaries of the holiday selling season, which will ramp up excitedly on Thursday. In the same vein, a number of retail issues exhibited relative strength in front of Black Friday.
From a sector standpoint, the telecommunications sector (+1.7%) had the best showing as industry leaders Verizon (VZ 47.12, +0.94, +2.0%) and AT&T (T 34.86, +0.53, +1.5%) were pushed higher on speculation the FCC may soon roll back net neutrality rules.
The energy sector (+0.4%) was next in line, getting a boost from rising oil prices ($57.98, +$1.15, +2.0%), which benefited from a weaker dollar, reports of a drawdown in oil inventories, and some defensive posturing in front of the holiday that also showed up in the Treasury market. The yield on the 10-yr note slipped four basis points to 2.32%.
All other sector moves were limited to down 0.4% to up 0.1%.
For the most part, the major indices were non-responsive to news today, including the release of the FOMC Minutes for the October 31-November 1 meeting, which contained the admission that "several participants expressed concerns about a potential buildup of financial imbalances" given elevated asset valuations and low financial market volatility.
Some misgivings about the low inflation readings were also expressed in the minutes, but overall, there was no change in the market's perception that the Fed is inclined to raise the target range for the fed funds rate at its December meeting. That consideration was reflected in the fed funds futures market, which was unchanged from Tuesday in showing a 100% probability of a rate hike at the December meeting.
There was a good bit of economic data released today, although none of it stirred any concern -- or conviction -- among today's participants.
The Durable Goods Orders report for October revealed a 1.2% decrease in orders (Briefing.com consensus +0.4%) that was led by a 4.3% drop in new orders for transportation equipment. Excluding transportation, orders were up 0.4% (Briefing.com consensus +0.5%) on the heels of an upwardly revised 1.1% increase (from +0.7%) for September.
The key takeaway from the report is that business spending decelerated in October, yet there is little reason at this juncture to think that deceleration is more than some normal slowing following some nice-sized gains in previous months.
Initial claims for the week ending November 18 decreased by 13,000 to 239,000, as expected, leaving claims in the sweet spot they have been for some time. Continuing claims for the week ending November 11 increased by 36,000 to 1.904 million.
The key takeaway from the report is that it covers the period in which the household survey for the November employment report was conducted, so it should feed economists' expectations for another solid month of nonfarm payroll gains.
The University of Michigan's Consumer Sentiment Index for November was revised to 98.5 (Briefing.com consensus 97.9) from the preliminary reading of 97.8. The upward revision was a byproduct of an upward adjustment in the reading for the expectations index. The final reading for October was 100.7, which was a decade peak, so consumer sentiment remains at lofty levels.
The key takeaway from the report is that consumers are feeling more confident in their expectations for income, employment, and inflation, which could bode well for future spending activity.
Happy Thanksgiving!
Nasdaq Composite +27.6% YTD
Dow Jones Industrial Average +19.1% YTD
S&P 500 +16.0% YTD
S&P Mid Cap 400 +11.9%
Russell 2000 +11.9% YTD
Back to Record Territory
21-Nov-17 16:30 ET
Dow +160.50 at 23590.83, Nasdaq +71.76 at 6862.47, S&P +16.89 at 2599.03
https://www.briefing.com/investor/markets/stock-market-update/2017/11/21/back-to-record-territory.htm
[BRIEFING.COM] Equities sprung to new record highs on Tuesday, with technology shares leading the charge.
The tech-heavy Nasdaq (+1.1%) outpaced the S&P 500 (+0.7%) and the Dow (+0.7%), but all three major stock indices finished at fresh record highs. The small-cap Russell 2000 (+1.0%) also posted a new all-time high, marking its first record close since October 5.
Trading volume was light once again on Tuesday and will likely remain that way throughout the abbreviated holiday week, creating the potential for outsized moves in either direction.
While there wasn't a particular catalyst to credit for the unexpected wave of buying, a positive performance from equity markets overseas certainly contributed to Wall Street's bullish bias. Indices in the Asia-Pacific region finished Tuesday broadly higher, with Hong Kong's Hang Seng (+1.9%) pacing the advance.
Stocks were strong in Europe as well, sending the Euro Stoxx 50 higher by 0.5%, despite continued uncertainty stemming from the collapse of coalition talks in Germany. On a related note, German Chancellor Angela Merkel said that she would prefer new elections rather than trying to form a minority government.
With the positive tone having already been set in both Europe and Asia, U.S. equities followed suit, opening Tuesday's session in the green. The major U.S. averages extended their opening gains for the first hour of trading, but then began a sideways trend that carried them to the closing bell.
The S&P 500's technology sector (+1.2%) was strong from the jump, helped by upbeat performances from mega-cap names like Apple (AAPL 173.14, +3.16), Microsoft (MSFT 83.72, +1.19), Facebook (FB 181.86, +3.12), and Alphabet (GOOG 1034.49, +16.11)--all of which added at least 1.4%.
Following Tuesday's rally, the technology sector has added 38.6% year to date, more than double the S&P 500's advance of 16.1%.
The health care sector (+0.9%) also outperformed on Tuesday, led by medical device company Medtronic (MDT 82.66, +3.76), which jumped 4.8%. MDT shares advanced after the company reported better-than-expected profits for its fiscal second quarter and reaffirmed its guidance for the fiscal year.
On the downside, AT&T (T 34.33, -0.31) struggled, losing 0.9%, after the U.S. Department of Justice announced its decision to file a lawsuit against the company's acquisition of Time Warner (TWX 89.56, +1.85). Conversely, TWX shares added 2.1%. The DOJ's decision was announced on Monday afternoon.
The telecom services group (-0.5%) was the only sector to finish in the red, but the heavily-weighted financial space (+0.3%) underperformed as the yield curve continued to flatten--which doesn't bode well for the earnings prospects of lenders.
U.S. Treasuries ended Tuesday on a mixed note, cutting the 2yr-10-yr spread to 59 basis points. The yield on the benchmark 10-yr Treasury note slipped one basis point to 2.36%, while the 2-yr yield climbed two basis points to 1.77%.
Reviewing Tuesday's economic data, which was limited to Existing Home Sales for October:
Existing home sales increased 2.0% in October to an annualized rate of 5.48 million units (Briefing.com consensus 5.42 million). The September reading was revised to 5.37 million from 5.39 million.
The key takeaway from the report is that notable supply constraints remain, which will continue to act as a drag on overall sales due to the limited inventory and the high prices on available inventory that is crimping affordability.
On Wednesday, investors will receive a number of economic reports, including the weekly MBA Mortgage Applications Index at 7:00 ET, weekly Initial Claims (Briefing.com consensus 239K) at 8:30 ET, October Durable Goods Orders (Briefing.com consensus +0.4%) also at 8:30 ET, and the final reading of the University of Michigan Consumer Sentiment Index for November (Briefing.com consensus 97.9) at 10:00 ET.
Also of note, the minutes from the latest FOMC meeting will be released on Wednesday at 14:00 ET.
Nasdaq Composite +27.5% YTD
Dow Jones Industrial Average +19.4% YTD
S&P 500 +16.1% YTD
Russell 2000 +11.9% YTD
Quiet Start to the Holiday Week
20-Nov-17 16:30 ET
Dow +72.09 at 23430.33, Nasdaq +7.92 at 6790.71, S&P +3.29 at 2582.14
https://www.briefing.com/investor/markets/stock-market-update/2017/11/20/quiet-start-to-the-holiday-week.htm
[BRIEFING.COM] Stocks had a quiet, but positive, start to the abbreviated Thanksgiving week on lighter-than-usual trading volume.
The Dow Jones Industrial Average climbed 0.3%, finishing a step above the S&P 500 and the Nasdaq, which added 0.1% apiece. Meanwhile, small caps outperformed, sending the small-cap Russell 2000 higher by 0.7%.
Tax reform remained a topic of conversation in the media on Monday, despite the lack of new developments. The House did its part last week when it passed its version of a tax reform bill, and analysts continue to debate whether the Senate can do the same when its version goes to the floor for a vote sometime after Thanksgiving.
Fed Chair Janet Yellen announced that she will resign from the Board of Governors when Jerome Powell replaces her as Fed Chair in early February. Ms. Yellen had the right to stay on the Board of Governors until January 2024, but her decision was not a surprise and had little impact on the financial markets.
As for corporate news, there were a few notable headlines on Monday, but the day was pretty quiet overall.
Chipmakers showed relative strength, evidenced by the 1.2% increase in the PHLX Semiconductor Index, after Marvell (MRVL 21.59, +1.30) announced that it will acquire Cavium Networks (CAVM 84.02, +8.19) for approximately $6 billion, or $80.00 per share, in cash and stock. MRVL shares added 6.4%, while CAVM shares jumped 10.8%.
The S&P 500's technology sector (+0.3%), which houses chipmakers, finished ahead of the broader market, but a ways behind the telecom services group (+1.0%), which settled at the top of the sector standings. Verizon (VZ 46.20, +0.78) led the telecom rally, adding 1.7%, after Wells Fargo upgraded VZ shares to 'Outperform' from 'Market Perform.'
Telecom giant AT&T (T 34.64, +0.13) also had a relatively positive showing, climbing 0.4%, following reports that the Department of Justice plans to make a major antitrust announcement on Monday evening that involves the company's pending acquisition of Time Warner (TWX 87.71, -1.01). TWX shares lost 1.1%.
The heavily-weighted financial sector climbed 0.5%, while the other advancing sectors added no more than 0.4%.
On the flip side, the health care space was the weakest group on Monday, moving lower by 0.4%. Within the group, Dow component Merck (MRK 54.10, -1.10) showed relative weakness, losing 2.0%, after Switzerland-based rival Roche announced positive clinical trial results for its cancer immunotherapy treatment called Tecentriq.
In the bond market, U.S. Treasuries moved lower in another curve-flattening trade, reducing the 2yr-10-yr spread to just 62 basis points. The yield on the benchmark 10-yr Treasury note climbed two basis points to 2.37%, while the 2-yr yield jumped three basis points to 1.75%. Yields move inversely to prices.
Elsewhere, efforts to form a coalition government in Germany fell apart overnight, leaving Europe's largest economy in a state of political uncertainty. However, European equities were able to climb despite the news, with Germany's DAX (+0.5%) pacing the advance.
Major indices in the Asia-Pacific region ended Monday on a mixed note, with Japan's Nikkei (-0.6%) slipping for the seventh time in nine sessions.
Reviewing Monday's economic data, which was limited to October Leading Indicators:
The Conference Board Leading Economic Index increased 1.2% in October (Briefing.com +0.8%). The prior month's reading was revised to +0.1% from -0.2%.
On Tuesday, investors will again receive just one economic report--October Existing Home Sales (Briefing.com consensus 5.42 million)--which will be released at 10:00 ET.
Nasdaq Composite +26.2% YTD
Dow Jones Industrial Average +18.6% YTD
S&P 500 +15.3% YTD
Russell 2000 +10.8% YTD
Slim Losses Ahead of Thanksgiving Week
17-Nov-17 16:30 ET
Dow -100.12 at 23358.24, Nasdaq -10.50 at 6782.80, S&P -6.79 at 2578.85
https://www.briefing.com/investor/markets/stock-market-update/2017/11/17/slim-losses-ahead-of-thanksgiving-week.htm
[BRIEFING.COM] Stocks ended a rather uneventful Friday session modestly lower as investors turned their attention to the upcoming Thanksgiving holiday week.
The Dow lost 0.4%, while the S&P 500 and the Nasdaq dropped 0.3% and 0.2%, respectively. Small caps outperformed, sending the Russell 2000 higher by 0.4%.
Most of the S&P 500's 11 sectors finished Friday in negative territory, but losses were pretty modest overall. The top-weighted technology sector (-0.7%) showed relative weakness, as did the utilities (-0.7%) and real estate (-0.6%) groups, while the other laggards finished with losses of no more than 0.5%.
On the flip side, the energy sector advanced 0.4% to register its only win of the week. Energy shares climbed in tandem with the price of crude oil, which managed to retrace just about all of its weekly decline; West Texas Intermediate crude futures jumped 2.5% to $56.71 per barrel, ending the week with a slim loss of 0.1%.
Retail shares also advanced on Friday, thanks to an overwhelmingly positive batch of quarterly earnings.
Foot Locker (FL 40.82, +8.97), Abercrombie & Fitch (ANF 15.55, +3.00), and Shoe Carnival (SCVL 26.75, +6.12) were the top performers, adding between 23.9% and 29.7%, after all three companies reported better-than-expected profits for the third quarter. Abercrombie & Fitch and Shoe Carnival also provided upbeat sales guidance.
Similarly, Ross Stores (ROST 72.25, +6.56) and Gap (GPS 29.40, +1.92) added 10.0% and 7.0%, respectively, following upbeat results.
In other corporate news, 21st Century Fox (FOXA 31.15, +1.83) climbed 6.2% following reports that Comcast (CMCSA 36.16, -0.91) is interested in acquiring a substantial piece of the company and Tesla (TSLA 315.05, +2.55) added 0.8% after unveiling its new semi truck and next-generation Roadster.
U.S. Treasuries ended on a mixed note, pushing the 2yr-10yr spread lower by three basis points to 63 bps. The yield on the 2-yr Treasury note climbed two basis points to 1.72%, while the benchmark 10-yr yield slipped one basis point to 2.35%.
Elsewhere, equity indices in the Asia-Pacific region finished Friday mostly higher, with Japan's Nikkei and Hong Kong's Hang Seng adding 0.2% and 0.6%, respectively. Meanwhile, European bourses were weak on Friday, sending the Euro Stoxx 50 lower by 0.5%.
Reviewing Friday's economic data, which was limited to October Housing Starts and Building Permits:
Housing starts increased to a seasonally adjusted annualized rate of 1.290 million units in October (Briefing.com consensus 1.198 million), up from a revised 1.135 million units in September (from 1.127 million). Building permits increased to a seasonally adjusted 1.297 million in October (Briefing.com consensus 1.243 million) from a revised 1.225 million in September (from 1.215 million).
The key takeaway from the report is that it will be a positive input for fourth quarter GDP forecasts as the number of units under construction --1.096 million -- was slightly ahead of the third quarter average of 1.077 million.
On Monday, investors will receive just one economic report--October Leading Indicators--which will be released at 10:00 ET.
Nasdaq Composite +26.0% YTD
Dow Jones Industrial Average +18.2% YTD
S&P 500 +15.2% YTD
Russell 2000 +10.0% YTD
Week In Review: Lots of Noise, Little Movement
The U.S. equity market ended a busy week little changed, with the benchmark S&P 500 losing just 0.1%. Meanwhile, the Dow dropped 0.3% this week, while the Nasdaq and small-cap Russell 2000 outperformed, finishing with gains of 0.5% and 1.2%, respectively.
Investors continued to keep an eye on Capitol Hill, where Republican lawmakers are trying to implement the biggest tax overhaul in more than 30 years. The House passed its version of a tax reform bill on Thursday, while the Senate continued to make changes to its version, which now includes a provision to repeal the Affordable Care Act's individual mandate.
Retailers dominated this week's batch of earnings--one of the final batches of the third quarter earnings season.
Shares of Wal-Mart (WMT) jumped 10.9% to a new all-time high on Thursday after the world's largest retailer reported better-than-expected earnings and revenues for the third quarter and issued upbeat profit guidance for fiscal year 2018. Conversely, shares of Target (TGT) tumbled 9.9% on Wednesday after the company issued a disappointing earnings forecast for the holiday season.
Ross Stores (ROST), Gap (GPS), Advance Auto (AAP), Foot Locker (FL), Abercrombie & Fitch (ANF), Buckle (BKE), Shoe Carnival (SCVL), and Hibbett Sports (HIBB) all soared after beating quarterly profit estimates. Most also beat sales estimates, and many provided upbeat guidance.
Unsurprisingly, the S&P 500's consumer discretionary (+1.3%) and consumer staples (+1.0%) sectors, which house retailers, finished near the top of the week's sector standings. The telecom services (+0.8%) group also outperformed, trimming its November loss to 2.1%.
On the flip side, the energy sector (-3.4%) struggled, giving back the prior week's advance and then some. The price of crude oil decreased at the beginning of the week--which didn't bode well for the energy group--but the commodity bounced back on Friday to end the week little changed; West Texas Intermediate crude futures slipped 0.1% to $56.71 per barrel.
Industrial shares also underperformed after General Electric (GE) cut its dividend by half and dialed back its profit forecast for 2018. GE shares ended the week lower by 11.1%, extending their year-to-date decline to 42.4%. The S&P 500's industrial sector lost 1.1% for the week.
In the bond market, U.S. Treasuries moved in a curve-flattening trade, sending the 2yr-10yr spread to its lowest level since 2007. The yield on the benchmark 10-yr Treasury note dropped five basis points to 2.35%, while the 2-yr yield climbed six basis points to 1.72%.
Following this week's events, investors still strongly believe that the Fed will raise rates next month, with the CME FedWatch Tool placing the chances of a December rate hike at 100.0%.
Bulls Retake Control; House Passes Tax Reform
16-Nov-17 16:30 ET
Dow +187.08 at 23458.36, Nasdaq +87.08 at 6793.30, S&P +21.02 at 2585.64
https://www.briefing.com/investor/markets/stock-market-update/2017/11/16/bulls-retake-control-house-passes-tax-reform.htm
[BRIEFING.COM] Stocks bounced back from recent weakness on Thursday, sending the tech-heavy Nasdaq (+1.3%) to a new all-time high.
Upbeat earnings reports from Dow components Wal-Mart (WMT 99.62, +9.79) and Cisco Systems (CSCO 35.88, +1.77) helped fuel the upbeat sentiment even before the opening bell, as did strength in overseas markets; Japan's Nikkei (+1.5%) led the charge in Asia, while France's CAC (+0.7%) and Germany's DAX (+0.6%) set the pace in Europe.
The U.S. House of Representatives passed its version of a tax reform bill in a party-line vote, as expected, which allowed the equity market to keep its bullish disposition into the closing bell. The focus will now shift to the Senate, which continues to debate its version of a tax overhaul.
As for the other major stock indices, the S&P 500 and the Dow added 0.8% apiece, while the small-cap Russell 2000 rallied 1.6%.
The technology (+1.3%) and consumer staples (+1.6%) sectors were among the strongest groups on Thursday, underpinned by Cisco and Wal-Mart, respectively. Wal-Mart shares jumped 10.9% to a new record high after the world's largest retailer reported better-than-expected earnings and revenues for the third quarter and issued upbeat profit guidance for fiscal year 2018.
Meanwhile, shares of Cisco Systems jumped 5.2%, hitting their best level in over 16 years, after the tech giant reported above-consensus earnings and issued upbeat guidance for the upcoming quarter.
The lightly-weighted telecom services (+1.8%) and materials (+1.3%) groups also had solid showings, trimming their monthly losses. However, the heavily-weighted financial group (+0.1%) struggled to keep pace with the broader market, with insurers like Travelers (TRV 130.81, -2.90) showing particular weakness; TRV shares lost 2.2%.
West Texas Intermediate crude futures slipped 0.4% to $55.11/bbl, which weighed on the energy group (-0.6%). For the week, energy shares within the S&P 500 have lost 3.8%, while WTI crude futures have dropped 2.9%. Investors remain optimistic that major oil producers will extend their supply-cut deal later this month.
Treasury yields rose as investors sold U.S. sovereign debt, sending the 2yr-10yr spread higher by one basis point to 66 basis points. The benchmark 10-yr yield jumped three basis points to 2.36%, while the 2-yr yield climbed two basis points to 1.70%. The U.S. Dollar Index ticked up 0.1% to 93.83.
Reviewing Thursday's economic data, which included October Industrial Production and Capacity Utilization, the weekly Initial Claims Report, the November Philadelphia Index, and October Import/Export Prices:
Industrial Production increased 0.9% in October (Briefing.com consensus +0.5%), while the September reading was revised to +0.4% (from +0.3%). Capacity Utilization rose to 77.0% (Briefing.com consensus 76.3%) from a revised reading of 76.4% in September (from 76.0%).
The key takeaway from the report is that industrial production is back on a growth track following the hurricanes. According to the Federal Reserve, industrial production increased 0.3% in October excluding the effects of the hurricanes.
The latest weekly initial jobless claims count totaled 249,000, while the Briefing.com consensus expected a reading of 234,000. Today's tally was above the unrevised prior week count of 239,000. As for continuing claims, they declined to 1.860 million from a revised count of 1.904 million (from 1.901 million).
The key takeaway from the report is that there is nothing out of the ordinary with the initial claims jump, which reflects normal volatility and marks the 141st straight week initial claims have been below 300,000.
The Philadelphia Fed Survey for November declined to 22.7 from an unrevised 27.9 in October while economists polled by Briefing.com had expected a reading of 24.6.
The key takeaway from the report is that manufacturing firms in the region expect growth to continue, evidenced by the diffusion index for future general activity rising from 46.4 in October to 50.1 in November.
Import prices excluding oil rose 0.2% in October after increasing 0.3% in September. Export prices excluding agriculture decreased 0.3% in October after rising a revised 0.9% in September (from 1.0%).
The key takeaway from the report is that the 1.4% year-over-year increase in nonfuel import prices is the largest year-over-year increase since the year ended March 2012. Nonagricultural export prices are up 2.5% year-over-year, down from the 3.0% increase for the 12 months ending September.
On Friday, investors will receive just one economic report--October Housing Starts (Briefing.com consensus 1198K)--which will be released at 8:30 ET.
Nasdaq Composite +26.2% YTD
Dow Jones Industrial Average +18.7% YTD
S&P 500 +15.5% YTD
Russell 2000 +9.6% YTD
Weakness Continues
15-Nov-17 16:30 ET
Dow -138.19 at 23271.28, Nasdaq -31.66 at 6706.22, S&P -14.25 at 2564.62
https://www.briefing.com/investor/markets/stock-market-update/2017/11/15/weakness-continues.htm
[BRIEFING.COM] Stocks slid for the fourth time in five sessions on Wednesday as investors continued to weigh the prospect of tax reform.
The Dow and the S&P 500 lost 0.6% apiece, while the Nasdaq finished lower by 0.5%. Losses were more substantial at the opening bell, but a relatively positive performance from the heavily-weighted financial sector (+0.2%) proved useful in defusing the bearish sentiment. A late bout of selling pulled the major averages from their best marks of the day.
Senate Republicans announced on Tuesday evening that they've added a provision to their tax reform bill that would repeal the Affordable Care Act's individual mandate, which requires all Americans to have health insurance. The individual mandate is a hotly debated topic among lawmakers and an attempt to repeal it may face resistance--potentially delaying the GOP's tax overhaul effort.
Uncertainty surrounding tax reform has been a stumbling block for the market as of late, although it's tough to gauge the true level of concern among investors, who may just see the pause as an opportunity to cash in on recently minted record highs.
Energy shares extended weekly losses on Wednesday as the price of crude oil continued retreating from the two-year high it touched last week; West Texas Intermediate crude futures slid 0.7% to $55.29 per barrel, while the S&P 500's energy sector lost 1.2%. The energy group now trades lower by 3.2% for the week.
On a related note, the Energy Information Administration reported that U.S. crude stockpiles unexpectedly rose by 1.9 million barrels last week.
The top-weighted technology sector (-0.9%) also underperformed on Wednesday, as did the consumer staples (-1.1%), utilities (-1.0%), and real estate (-0.8%) groups. Within the tech space, Apple (AAPL 169.08, -2.26) showed particular weakness, finishing lower by 1.3%. The tech giant has now settled in the red for five sessions in a row.
In earnings news, Target (TGT 54.16, -5.93) tumbled 9.9% after issuing a disappointing earnings forecast for the holiday season.
U.S. Treasuries rallied in a curve-flattening trade, reducing the 2yr-10yr spread to 65 basis points--its lowest level since 2007. The yield on the benchmark 10-yr Treasury note dropped five basis points to 2.33%, while the 2-yr yield finished flat at 1.68%.
Elsewhere, stock indices in both Europe and the Asia-Pacific region settled the midweek session broadly lower, with Japan's Nikkei (-1.6%) showing notable weakness.
Reviewing Wednesday's economic data, which included the Consumer Price Index for October, Retail Sales for October, September Business Inventories, November Empire Manufacturing, and the weekly MBA Mortgage Applications Index:
Total CPI increased 0.1% (Briefing.com consensus +0.1%) in October while core CPI, which excludes food and energy, rose 0.2% (Briefing.com consensus +0.2%). On a year-over-year basis, total CPI and core CPI are up 2.0% and 1.8%, respectively.
The key takeaway from the report is that inflation pressures are still not acute, yet they are likely not weak enough to persuade the Federal Reserve from raising the fed funds rate again at its December meeting.
October retail sales increased 0.2% (Briefing.com consensus +0.1%). The prior month's increase was revised to 1.9% from 1.6%. Excluding autos, retail sales increased 0.1% in October while the Briefing.com consensus expected an increase of 0.2%. The prior month's increase was revised to 1.2% from 1.0%.
The key takeaway from the report is that it isn't as soft as it appears at first blush, as there was an unwinding of some of the hurricane-related sales strength that led to the remarkably strong sales activity in September.
Business Inventories were unchanged (0.0%) in September, as expected. The August reading was revised to 0.6% from 0.7%.
The key takeaway from the report is that sales growth is outpacing inventory growth, which is a step toward regaining some pricing power.
The Empire Manufacturing Survey for November declined to 19.4 from the prior month's reading of 30.2. The Briefing.com consensus estimate was pegged at 26.0.
The weekly MBA Mortgage Applications Index increased 3.1%.
On Thursday, investors will receive the weekly Initial Claims Report (Briefing.com consensus 234K), the November Philadelphia Index (Briefing.com consensus 24.6), and October Import/Export Prices at 8:30 ET, followed by October Industrial Production (Briefing.com consensus +0.5%) and Capacity Utilization (Briefing.com consensus 76.3%) at 10:00 ET.
Also of note, Wal-Mart (WMT 89.83, -1.26) will report earnings on Thursday morning.
Nasdaq Composite +24.6% YTD
Dow Jones Industrial Average +17.8% YTD
S&P 500 +14.6% YTD
Russell 2000 +7.9% YTD
Slide Resumes Following Brief Pause
14-Nov-17 16:25 ET
Dow -30.23 at 23409.47, Nasdaq -19.72 at 6737.88, S&P -5.97 at 2578.87
https://www.briefing.com/investor/markets/stock-market-update/2017/11/14/slide-resumes-following-brief-pause.htm
[BRIEFING.COM] Stocks slipped on Tuesday, retracing all of Monday's slim gains, as investors continued to digest the prospect of tax reform--which has been a stumbling block for the market as of late. The major stock indices modestly added to, and trimmed, their opening losses throughout the day, eventually settling near the top of their trading ranges.
The tech-heavy Nasdaq dropped 0.3%, while the S&P 500 and the Dow lost 0.2% and 0.1%, respectively.
Energy shares showed particular weakness as the price of crude oil continued to retreat from the two-year high it touched at the beginning of the prior week. West Texas Intermediate crude futures declined by 1.9%, settling at a price of $55.70 per barrel. The S&P 500's energy sector finished lower by 1.5%.
The materials (-1.1%) and telecom services (-1.4%) groups also finished with sizable losses, but most other sectors closed roughly in line with, or above, the broader market. The health care space (-0.4%) faced slightly heavier selling as biotechnology shares slipped to a three-month low; the iShares Nasdaq Biotechnology ETF (IBB 305.05, -5.03) lost 1.6%.
Meanwhile, industrial giant General Electric (GE 17.90, -1.12) tumbled another 5.9% following Monday's decision to slash its dividend by 50%.
However, there were a handful of groups that managed to move higher on Tuesday, including the utilities space, which added 1.2%. The rate-sensitive group benefited from increased buying in the Treasury market, which sent yields lower across the curve. The benchmark 10-yr yield dropped two basis points to 2.38%.
The consumer staples (+0.3%) and consumer discretionary (+0.1%) spaces also showed relative strength. Within the consumer discretionary group, Home Depot (HD 168.06, +2.71) climbed 1.6% after reporting better-than-expected earnings and revenues for the third quarter and raising its guidance for 2018.
Advance Auto (AAP 95.72, +13.44) and TJX (TJX 67.94, -2.82) also reported earnings on Tuesday--with mixed results. TJX shares slipped 4.0% after the apparel and home goods retailer missed sales estimates for the third quarter, while Advance Auto shares surged 16.3% after the auto parts retailer beat Q3 profit estimates and reaffirmed its same store sales guidance for fiscal year 2017.
In other corporate news, Buffalo Wild Wings (BWLD 145.35, +28.10) jumped 24.0% following reports that private equity firm Roark Capital has made a bid to buy the casual dining and sports bar franchise for more than $150 per share.
From Washington, unconfirmed reports indicate that Senate leaders have decided to add a repeal of the Affordable Care Act's individual mandate to the upper chamber's version of a tax reform bill. If true, this development may slow tax reform negotiations. On a related note, the House is expected to vote on its version of the bill this Thursday.
Elsewhere, equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note, with Japan's Nikkei (unch) showing relative strength. The Euro Stoxx 50 (-0.5%) moved lower for the seventh session in a row as the euro climbed 1.1% against the U.S. dollar to 1.1794--its highest level in nearly three weeks.
Reviewing Tuesday's economic data, which was limited to the October Producer Price Index and the October NFIB Small Business Optimism Index:
Producer prices rose 0.4% in October (Briefing.com consensus +0.1%), while core producer prices also rose 0.4% (Briefing.com consensus +0.2%). Year over year, producer prices are up 2.8% and core producer prices have risen 2.4%.
The key takeaway from the report is that it will create some angst about possible pass-through effects on consumer prices and will help solidify expectations for a December rate hike from the Federal Reserve.
The NFIB Small Business Optimism Index increased to 103.8 in October from 103.0 in the September reading.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index at 7:00 ET, the Consumer Price Index for October (Briefing.com consensus +0.1%) at 8:30 ET, Retail Sales for October (Briefing.com consensus +0.1%) at 8:30 ET, November Empire Manufacturing (Briefing.com consensus 26.0) at 8:30 ET, and September Business Inventories (Briefing.com consensus 0.0%) at 10:00 ET.
Nasdaq Composite +25.2% YTD
Dow Jones Industrial Average +18.5% YTD
S&P 500 +15.2% YTD
Russell 2000 +8.4% YTD
Slim Victory Ends Two-Session Slide
13-Nov-17 16:30 ET
Dow +17.49 at 23439.70, Nasdaq +6.66 at 6757.60, S&P +2.54 at 2584.84
https://www.briefing.com/investor/markets/stock-market-update/2017/11/13/slim-victory-ends-twosession-slide.htm
[BRIEFING.COM] Stocks crept toward record highs on Monday, ending a two-session losing streak. The S&P 500, the Nasdaq, and the Dow added 0.1% apiece.
With the third quarter earnings season nearly in the books, investors continued to chew on the prospect of tax reform. The House is expected to vote on its version of a tax reform bill this Thursday, but, even if the bill passes, the lower chamber still has some work to do in order to reconcile its version with the version that the Senate unveiled last week.
The two versions must match and be approved by both chambers in order to put the bill on President Trump's desk.
The S&P 500's utilities sector was the best-performing group on Monday, finishing with a gain of 1.2%, followed from a distance by the consumer staples (+0.6%), materials (+0.5%), and consumer discretionary (+0.3%) groups. In total, seven of the eleven sectors settled in positive territory, but General Electric (GE 19.02, -1.47) kept the upbeat sentiment in check.
GE shares dropped 7.2%, hitting a fresh five-year low, after the company cut its divided by half and dialed back its profit forecast for 2018. The dividend cut was expected by many and was deemed necessary by new CEO John Flannery in order to restructure the 125-year-old industrial giant. Following Monday's decline, GE shares are down 39.8% year to date.
In other corporate news, toymaker Mattel (MAT 17.64, +3.02) spiked 20.7% following weekend reports that rival Hasbro (HAS 96.83, +5.38) has made a bid to acquire the company; Hasbro shares also moved higher, adding 5.9%. The reported bid comes two weeks after a disappointing third quarter earnings report for Mattel and at a time when MAT shares are challenging their lowest level since 2009.
Meanwhile, pharmacy retailers like CVS Health (CVS 71.48, +0.49) breathed a sigh of relief after Amazon (AMZN 1129.17, +3.82) announced that it plans to use recently obtained state pharmacy licenses to sell medical devices and supplies, not prescriptions--as was previously rumored. CVS shares climbed 0.7%.
In the bond market, U.S. Treasuries kicked off the week on a mostly flat note, with the yield on the benchmark 10-yr Treasury note finishing unchanged at 2.40%. Shorter-dated issues showed relative weakness, however, leaving the 2-yr yield higher by three basis points at 1.69%.
Elsewhere, the Euro Stoxx 50 (-0.4%) moved lower for the sixth session in a row, while equities in the Asia-Pacific region ended Monday mixed with Japan's Nikkei (-1.3%) showing relative weakness. In the UK, 40 Conservative members of parliament have reportedly agreed to sign a letter of no confidence against Prime Minister Theresa May--just eight members shy of forcing a leadership vote.
Reviewing Monday's economic data, which was limited to the October Treasury Budget:
The Treasury Budget for October showed a deficit of $63.2 billion versus a deficit of $45.8 billion for October 2016.
The Treasury Budget data is not seasonally adjusted, so the October deficit cannot be compared to the $8.0 billion surplus registered in September.
On Tuesday, investors will receive just one notable economic report--the Producer Price Index for October (Briefing.com consensus +0.1%)--which will be released at 8:30 ET. The NFIB Small Business Optimism Index for October will cross the wires at 7:00 ET, but is not expected to have much impact on the financial markets.
Nasdaq Composite +25.5% YTD
Dow Jones Industrial Average +18.6% YTD
S&P 500 +15.5% YTD
Russell 2000 +8.7% YTD
InvestmentHouse - More Calls the Top is Here (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- More calls that the top is here as the market tests rather normally.
- Small caps continue their struggle as GOP tax ineptitude dims hopes or any
substantive relief, especially for small caps.
- Leadership still looks fully capable of pushing more upside as retail
improves, oil improves, software rallies, and chips and FAANG test recent
moves.
The stock indices started the week higher but then could not find any
further upside impetus, trailing off into the weekend. That left the
indices down for the week but at near support at the 10 or 20 day EMA. RUTX
was the lone index out, dropping to the 50 day MA midweek but holding it
through Friday.
SP500 -2.23, -0.09%
NASDAQ +0.89, 0.01%
DJ30 -39.73, -0.17%
SP400 -0.02%
RUTX +0.02%
SOX +0.65%
VOLUME: NYSE -2%; NASDAQ -12%. Volume remained above average but faded to
near average on both exchanges. Strong all week, not so bad on the early
week upside, more of some churn as the indices struggled.
ADVANCE/DECLINE: NYSE -1.3:1, NASDAQ +1.1:1. Still chronically weak
breadth.
Hardly the end of the world as many made it out to be. Indeed. This was
called a 'dress rehearsal' for the 'big one' yet to come or an outright
start of a large selloff. Anyone can be right on any market call at a given
time, but looking across the market it is hard to see where the breakdowns
are occurring that would label this the start of a major selloff.
VIX is oft discussed, but VIX did not rise as the stock market rose, the
classic major top signal VIX can flash. Yes when VIX is low it CAN suggest
a selloff, but VIX can be low for a long time before stocks sell; that makes
this a very hit or miss indicator. The worrisome one is that VIX uptrend as
stocks uptrend; major tops -- the kind being discussed by many as what is
coming -- typically have VIX rise with stocks as part of the blow off phase.
Further, leadership is holding up. More than that, over the past couple of
weeks some old leaders were recycled to new leaders as FAANG stocks broke
out from trading ranges. At the same time most of the recent leaders
continued looking solid enough and they are even picking up some help from
oil stocks. Leadership appears more than solid enough to keep the market
working.
The market IS showing some issues in at least two respects: 1) small caps
struggling most likely over the pathetic GOP handling of the tax reform
effort, and 2) a chronic lack of breadth. Both of those conditions are of
course somewhat tied together.
Small caps led the move higher on the tax reform pass-through proposal. The
subsequent handling has been utterly feckless and there are also those in
the GOP who will, as explained last week, never support anything that would
give President Trump a major win. The small caps tested normally at first,
but as the missteps mounted, the test became more volatile and this past
week RUTX flopped to the 50 day MA, still well above the 38% Fibonacci
retracement of the August to October move.
Some say the market cannot rally without the small caps. Nonsense. The
market has rallied many times without the small caps. It can and has
rallied on just the FAANG and a few other mega caps. Sure it would be great
to have all stocks working higher, but it is not a prerequisite.
As for the breadth, it stinks. That is the result of the small caps fading
even as the mega caps work reasonably well though they were off a bit last
week. Ultimately if the majority of the market does not follow that
eventually leads to failure. With the big names just posting breakouts from
consolidations, however, they look fully capable of leading to the upside at
least through yearend.
THE MARKET
CHARTS
NASDAQ: Moved higher through Wednesday as the mega caps continued their
moves, then faded through Friday, testing the 20 day EMA intraday Thursday
and recovering, and holding the 10 day EMA in a narrow range Friday. Still
a very solid uptrend, making a test of the 20 day EMA as it did in late
October. This makes the second test of the 20 day after rising off a 50 day
MA test in September. MACD broke out to a higher high with price, upside
volume on the break higher from late October is great, big names are leading
upside. This does not look to be an index that is in the throes of a
rollover.
SOX: Similar to NASDAQ, SOX gapped higher Monday and rallied to a higher
post-2000 high Wednesday. Thursday was rougher, gapping lower, selling
through the 10 day EMA, but recovering to hold that near support Friday. A
bit more extended than NASDAQ as SOX has not tasted the 50 day MA since late
August, trending up the 10 day EMA in a steady rise.
RUTX: Much is being made about the small caps, and that is understandable
after its scintillating move from mid-August to October on the pass-through
rates -- rates that now are showing ZERO change in the Senate plan. The
easy test turned volatile and that continued last week as a move higher
through Monday collapsed Tuesday and RUTX fell to the 50 day MA to end the
week. Still 24 points above the 38% Fibonacci retracement and the July high.
SP400: The midcaps shook off the tax issues. Lower on the week, but a very
modest test to the 20 day EMA, holding that level Thursday and Friday with
doji. Not powerful, but holding its move higher at near support.
SP500: SP500 and SP500 are very similar right now. SP500 put in a new high
Wednesday then tested it Thursday and Friday, closing just below the 10 day
EMA for the week. Still a very nice trend upside.
DJ30: Finally tested after the 9 week move. Thursday DJ30 tapped the 20
day EMA on the low, the first touch of this level since early September when
DJ30 rose off the 50 day EMA. Pretty normal test.
LEADERSHIP
FAANG: Solid early week, tested late week. AAPL rallied through Wednesday
to new highs, modest test to Friday well over the 10 day EMA. AMZN rallied
through Wednesday, modest test into Friday, well over the 10 day EMA. FB
bounced Monday and Tuesday, faded into Friday, still a nice consolidation of
the break higher. GOOG up through Wednesday, faded to the 10 day EMA to
test on Friday. NFLX fell to the 50 day MA with a doji Friday and we will
see if it can reset and start a new move higher; did this the last two times
it tested the 50 day.
Oil: Some really decent moves and some good setups. DVN working well after
breaking through the 200 day SMA. DO solidly moving. CRR, MRO, NOG, TELL
and many others look solid.
Semiconductors: A week were many of the leaders tested, e.g. INTC, TXN,
AVGO, SWKS, XLNX, SLAB -- lots of tests of near support making this coming
week an important one for these stocks to show they can move back up and
continue leadership.
Software: VMW started back upside. RHT breaking higher from a nice
consolidation. CRM rallying to a higher high once more. TTWO broke out
with a gap and is testing. CALD testing a breakout.
Financial: Tested back on the week as interest rates fell. JPM is on the
50 day MA. BAC and C testing the 50 day as well.
Retail: Some solid moves from PII, SKX Friday. KSS was under a lot of
pressure after earnings but surged back quite nicely. WMT still strong. HD
holding the weeklong 50 day EMA test.
MARKET STATS
DJ30
Stats: -39.73 points (-0.17%) to close at 23422.21
Nasdaq
Stats: +0.89 points (+0.01%) to close at 6750.94
Volume: 1.98B (-11.61%)
Up Volume: 1.1B (+270.73M)
Down Volume: 830.17M (-539.83M)
A/D and Hi/Lo: Advancers led 1.08 to 1
Previous Session: Decliners led 1.62 to 1
New Highs: 76 (+7)
New Lows: 66 (-26)
S&P
Stats: -2.32 points (-0.09%) to close at 2582.30
NYSE Volume: 848.7M (-1.96%)
A/D and Hi/Lo: Decliners led 1.32 to 1
Previous Session: Decliners led 1.64 to 1
New Highs: 77 (+4)
New Lows: 61 (-9)
SENTIMENT INDICATORS
VIX: 11.29; +0.79
VXN: 15.03; -0.01
VXO: 9.80; +0.54
Put/Call Ratio (CBOE): 1.18; +0.08
Bulls and Bears: Bulls put in the fifth consecutive week above 60.0, rising
to a cycle high at 64.4. Definitely enough bullishness to work against a
continued upside move.
Bulls: 64.4 versus 63.5
Bears: 14.4 versus 14.4
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 64.4 versus 63.5
63.5 versus 62.3 versus 60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5
versus 47.1 versus 49.5 versus 49.5 versus 48.1 versus 50.5 versus 57.5
versus 60.0 versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9
versus 51.5 versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1
versus 58.7 versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8
versus 49.5 versus 56.7 versus 53.4 versus 57.7 versus 63.1 versus 61.2
versus 61.8 versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6
versus 60.2 versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3
versus 55.6 versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9
Bears: 14.4 versus 14.4
14.4 versus 15.1 versus 15.2 versus 15.1 versus 17.0 versus 17.1 versus 19.0
versus 20.2 versus 19.1 versus 19.1 versus 18.3 versus 18.1 versus 17.0
versus 16.2 versus 16.5 versus 16.7 versus 18.6 versus 18.8 versus 18.6
versus 18.3 versus 19.2 versus 18.3 versus 17.1 versus 17.3 versus 17.9
versus 17.9 versus 18.3 versus 17.5 versus 18.3 versus 18.1 versus 17.3
versus 13.75 versus 17.3 versus 16.5 versus 17.5 versus 17.6 versus 16.7
versus 17.6 versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6
versus 19.6 versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5
versus 25.7 versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8
versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.402% versus 2.34%. Wow, from a rally over the 50 day SMA that
looked solid, followed by a short test, bonds plunged Friday, gapping lower
and dropping back to the 200 day SMA.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.34%
versus 2.326% versus 2.316% versus 2.32% versus 2.332% versus 2.349% versus
2.358% versus 2.378% versus 2.37% versus 2.419% versus 2.456% versus 2.435%
versus 2.421% versus 2.366% versus 2.383% versus 2.318% versus 2.341% versus
2.30% versus 2.302% versus 2.275% versus 2.321% versus 2.345% versus 2.345%
versus 2.361% versus 2.348% versus 2.327% versus 2.326% versus 2.341% versus
2.339% versus 2.312% versus 2.307% versus 2.236% versus 2.222% versus 2.253%
versus 2.276% versus 2.273% versus 2.246% versus 2.234% versus 2.201% versus
2.186% versus 2.19% versus 2.167% versus 2.134% versus 2.042%
EUR/USD: 1.16646 versus 1.16439. Euro rebounded late week though still
well off the September high.
Historical: 1.16439 versus 1.15871 versus 1.15954 versus 1.1609 versus
1.16092 versus 1.16575 versus 1.15480 versus 1.1644 versus 1.16091 versus
1.16330 versus 1.18163 versus 1.17570 versus 1.1759 versus 1.17798 versus
1.18476 versus 1.17995 versus 1.1771 versus 1.17932 versus 1.1823 versus
1.1834 versus 1.18662 versus 1.1813 versus 1.17460 versus 1.17352 versus
1.17100 versus 1.1754 versus 1.17676 versus 1.17315 versus 1.1812 versus
1.17817 versus 1.1746 versus 1.17852 versus 1.18540 versus 1.19476 versus
1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus 1.1918 versus
1.1874 versus 1.19706 versus 1.19551 versus 1.20379 versus 1.2025 versus
1.19258 versus 1.19143 versus 1.18621 versus 1.19131 versus 1.18938 versus
1.19731 versus 1.19678 versus 1.19212 versus 1.18 versus 1.17516 versus
1.1813 versus 1.17595 versus 1.17107 versus 1.17812 versus 1.17445 versus
1.17751 versus 1.18216 versus 1.17652
USD/JPY: 113.526 versus 113.379. Dollar faded on the week, holding at the
20 day EMA to close the festivities.
Historical: 113.379 versus 113.99 versus 113.723 versus 113.758 versus
114.064 versus 114.010 versus 114.010 versus 113.845 versus 113.640 versus
113.175 versus 113.675 versus 114.071 versus 113.607 versus 113.913 versus
113.31 versus 113.530 versus 112.561 versus 113.031 versus 112.21 versus
112.20 versus 111.852 versus 112.25 versus 112.413 versus 112.41 versus
112.700 versus 112.653 versus 112.818 versus 112.79 versus 112.667 versus
112.716 versus 112.442 versus 112.86 versus 112.289 versus 111.649 versus
1.12125 versus 111.995 versus 112.454 versus 111.559 versus 111.435 versus
110.846 versus 110.01 versus 110.62 versus 110.216 versus 109.434 versus
107.847 versus 108.444
Oil: 56.74, -0.43. Oil Surged into Monday with a new breakout rally high,
then tested laterally the rest of the week, waiting for the 10 day EMA to
catch up to the move.
Gold: 1274.20, -13.30. Gold edged higher off the 200 day SMA into
Thursday, hit the 50 day EMA, then flopped Friday.
MONDAY
Tons of data on the week. PPI, CPI, New York and Philly PMI, Retail sales
for October, Inventories, Capacity and Utilization. Lots of data for the
market to chew on in addition to what is becoming the tail end of earnings
season.
Last week saw the small caps really struggle with the GOP tax reform
ineptitude and impotence. The big names that just broke out of bases tested
their moves but are holding up very well. Chips tested as well, coming back
to near support. Software is still solid, oil is making some good moves and
more are set up to make good moves.
There is plenty of potential for the upside to resume. As noted earlier,
there are calls that the selling has just started or is about to start. It
may, but from the action last week and the leaders that are still out in the
market, I am not seeing imminent failure. There can ALWAYS be events that
appear to upset even the best setups. Plenty of geopolitics, growing
threats in the Middle East, continuing threats from Korea. The continued
playing politics in our cesspool of a federal government, playing with our
lives and our finances as they play power politics.
The market, however, has shown strength through it all. For now, at least,
there is still the notion that the upside potential outweighs the downside
given the status of the Fed and the chairman transition, the regulation
rollback, a more business friendly climate (for all but certain groups it
would appear), and still the outside hope of a meeting of the minds and
votes on tax reform.
Therefore with the setups we see, we are still looking mostly upside. Oil,
semiconductors, big industrials, retail, FAANG still sport solid setups we
want to ride higher if they show the moves higher.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6750.94
Resistance:
6796 is the November 2017 all-time high
Support:
The 20 day EMA at 6688
6641 is the October high
The 50 day EMA at 6576
6477 is the September intraday high
The 2016 trendline at 6463
6461 is the July 2017 prior all-time high
6450 is the early September high
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
The 200 day SMA at 6193
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2582.30
Resistance:
2597 is the November 2017 all-time high
Support:
The 20 day EMA at 2573
The 50 day EMA at 2541
2535 is the upper channel line from the March 2009 uptrend channel
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
The 200 day SMA at 2434
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 23,422.21
Resistance:
23,602 is the November 2017 all-time high
Support:
The 20 day EMA at 23,316
The 50 day EMA at 23,876
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
The 200 day SMA at 21,517
21,169 is the March 2017 all-time high
Stocks End Little Changed as Investors Chew on Tax Reform
10-Nov-17 16:30 ET
Dow -39.73 at 23422.21, Nasdaq +0.89 at 6750.94, S&P -2.32 at 2582.30
https://www.briefing.com/investor/markets/stock-market-update/2017/11/10/stocks-end-little-changed-as-investors-chew-on-tax-reform.htm
[BRIEFING.COM] Doubts about the future of tax reform continued to linger on Friday, but stocks pared opening losses in the afternoon to leave the major U.S. indices little changed. The S&P 500 and the Dow finished with modest losses of 0.1% and 0.2%, respectively, while the Nasdaq closed just a tick above its unchanged mark.
The Senate's version of a tax reform bill, which was released on Thursday, has created some doubts in the market about the GOP's ability to implement a tax overhaul as it differs from the House's version of a tax reform bill in several key areas--most notably, the Senate's version calls for delaying a cut in the corporate tax rate by one year.
However, it's tough to say that the Senate's tax reform proposal did little more than give investors an excuse to take some profits following yet another string of record highs. One thing is clear, if investors are concerned about the prospect of tax reform, it didn't impact the equity market significantly this week as the S&P 500 finished with a weekly loss of just 0.2%.
On the whole, Friday's session was pretty uneventful. Many banks were closed in honor of Veterans Day, leading to slightly below-average trading volume.
The S&P 500's energy sector (-0.8%) ended the week on a down note as the price of crude oil declined 0.7% to $56.75/bbl. Health care shares also underperformed, sending the health care group lower by 0.9%, but most of the other sectors finished roughly in line with, or above, the broader market.
Pharmacy retailers like CVS Health (CVS 70.99, +1.97) and Walgreens Boot Alliance (WBA 70.99, +1.85) helped push the consumer staples group (+1.0%) to the top of the sector standings, adding 2.9% and 2.7%, respectively, while department store retailer J.C. Penney (JCP 3.17, +0.42) spiked 15.3% after reporting better-than-expected earnings and revenues for its fiscal third quarter.
In other earnings news, chipmaker NVIDIA (NVDA 216.14, +10.82) climbed 5.3%, hitting a new all-time high, after reporting better-than-expected earnings and revenues and issuing above-consensus revenue guidance for the fourth quarter. Meanwhile, Dow component Walt Disney (DIS 104.78, +2.10) added 2.1% despite missing profit and sales estimates.
U.S. Treasuries finished on a broadly lower note, erasing their gains from earlier in the week. The yield on the benchmark 10-yr Treasury note jumped seven basis points to 2.40%--settling near a two-week high--while the 2-yr yield climbed three basis points to 1.66%. Yields move inversely to prices.
Elsewhere, stocks in the Asia-Pacific region ended Friday on a mixed note, with Japan's Nikkei (-0.8%) showing relative weakness, while the Euro Stoxx 50 dropped 0.5%.
Reviewing Friday's economic data, which was limited to the University of Michigan Consumer Sentiment Index for November:
The preliminary reading of the University of Michigan Consumer Sentiment Index for November declined to 97.8 (Briefing.com consensus 100.5) from 100.7 in October.
The key takeaway from the report is that consumers' anticipated wage gains recorded the highest two-month level in a decade.
On Monday, investors will receive just one economic report--the October Treasury Budget--which will be released at 14:00 ET.
Nasdaq Composite +25.4% YTD
Dow Jones Industrial Average +18.5% YTD
S&P 500 +15.3% YTD
Russell 2000 +8.7% YTD
Week In Review: A Taxing Release
Stocks got off to a good start this week, hitting new record highs on Monday and Wednesday, but retraced their gains in the latter half--a move that was nominally attributed to the release of the Senate's tax reform bill. More likely, however, this week's loss was the result of some profit taking following a largely uninterrupted two-month rally. The S&P 500 and the Nasdaq shed 0.2% apiece, while the Dow lost 0.5%.
The financial sector paced this week's retreat, which is fitting considering the group played a leadership role in the market's most recent bullish run; the financial sector jumped 11.4% from September 8 to November 3, while the benchmark S&P 500 added 5.1%. Dow components JPMorgan Chase (JPM) and Goldman Sachs (GS) lost 3.9% and 1.7% this week, respectively.
Industrial shares also struggled, with transports showing particular weakness; the Dow Jones Transportation Average dropped 2.6%.
Meanwhile, the energy sector outperformed, finishing with a gain of 1.1%. The group benefited from an increase in the price of crude oil, which touched its highest level in more than two years; WTI crude futures finished higher by 2.0% at $56.75/bbl. Heightened tensions in the Middle East, which could potentially disrupt crude production in the region, were largely credited for the move.
Saudi Arabia's Crown Prince Mohammad bin Salman ordered the arrests of some of the country's most prominent political and business figures on allegations of corruption. In addition, Saudi Arabia ordered its citizens to leave Lebanon after accusing the country of declaring war, citing the presence of Iranian-backed Hezbollah members within the Lebanon government.
Back in the U.S., earnings season continued this week--albeit with fewer notable companies on the docket--but headlines were focused on M&A developments. Sprint (S) and T-Mobile US (TMUS) lost 7.2% and 3.6%, respectively, after announcing over the weekend that they could not reach a merger agreement.
Meanwhile, chipmaker Broadcom (AVGO) slipped 3.2% after bidding $70 per share (in cash and stock) for Qualcomm (QCOM), which, conversely, ended the week higher by 4.5%. There were also reports that the Department of Justice would require the sale of CNN before it would approve AT&T's (T) acquisition of Time Warner (TWX), but later reports said that claim was false.
Also of note, Walt Disney (DIS) and 21st Century Fox (FOXA) were reportedly in discussions regarding a sale of assets to Disney from Fox in recent weeks.
On the political front, the Senate on Thursday released its version of a tax reform bill, which called for delaying a cut in the corporate tax rate to 20% from 35% by one year and differed from the version that the House unveiled last week in several other key areas--including deductions related to state and local property taxes.
The two chambers will have to hammer out those differences in order to put the bill on the president's desk for approval, and uncertainty surrounding Congress' ability to do just that were cited by some as the main catalyst for Wall Street's weakness in the latter half of the week.
Following this week's events, investors still strongly believe that the Fed will raise rates next month, with the CME FedWatch Tool placing the chances of a December rate hike at 100.0%.
Investors Take Profits After Senate Calls for Corporate Tax Cut Delay
09-Nov-17 16:30 ET
Dow -101.42 at 23461.94, Nasdaq -39.07 at 6750.06, S&P -9.78 at 2584.60
https://www.briefing.com/investor/markets/stock-market-update/2017/11/9/investors-take-profits-after-senate-calls-for-corporate-tax-cut-delay.htm
[BRIEFING.COM] U.S. equities retreated from record highs on Thursday as investors took some profits following a largely uninterrupted two-month rally. The major indices finished near the top of their trading ranges, with the S&P 500 and the Dow losing 0.4% apiece. The tech-heavy Nasdaq (-0.6%) underperformed as technology shares faced particularly heavy selling.
The Senate released its version of a tax reform bill, which called for delaying a cut in the corporate tax rate by one year and differed from the version that the House unveiled last week in several other key areas--including property tax, mortgage interest, and medical expense deductions. The two chambers will have to hammer out those differences in order to put the bill on the president's desk for approval, and doubts surrounding Congress' ability to do just that were cited by some as the main catalyst for Thursday's sell off.
More likely, however, the Senate's unveiling provided a convenient excuse for investors to take some money off the table following yet another record high run for the major U.S. indices. All three major averages finished the prior session at fresh all-time highs and have added between 5.0% and 7.6% since September 8.
Technology shares within the S&P 500 were particularly weak on Thursday, losing 0.9%. Chipmakers paced the tech retreat, sending the PHLX Semiconductor Index lower by 2.0%, with names like Broadcom (AVGO 265.64, -6.76) and Advanced Micro (AMD 11.12, -0.59) losing 2.5% and 5.0%, respectively.
The industrial sector (-1.3%) did even worse, settling at the bottom of the sector standings, while a handful of groups managed to move modestly higher--including consumer discretionary (+0.2%), energy (+0.3%), utilities (+0.1%), and telecom services (+0.3%).
Shares of 21st Century Fox (FOXA 28.70, +0.61) jumped 2.2% after the media giant reported better-than-expected earnings and sales for its fiscal first quarter. Peers like Walt Disney (DIS 102.68, +1.50), CBS (CBS 58.08, +0.83), and Viacom (VIAB 24.78, +0.48) moved higher in sympathy, adding between 1.5% and 2.0%.
Retailers outperformed as well, evidenced by the 1.6% increase in the SPDR S&P Retail ETF (XRT 39.71, +0.64). Macy's (M 19.50, +1.93) led the retail advance, surging 11.0% after reporting above-consensus earnings for its fiscal third quarter and reaffirming its guidance for 2018.
In other corporate news, CNBC reported that the Department of Justice has not set a requirement for Time Warner (TWX 87.05, -1.45) to sell CNN in order to be acquired by AT&T (T 34.00, +0.56), as was reported on Wednesday. Time Warner shares slipped 1.6%, while AT&T shares climbed 1.7%.
U.S. Treasuries ended on a mixed note, with shorter-dated issues showing relative strength while longer-dated issues exhibited relative weakness. The benchmark 10-yr Treasury note finished flat, however, with its yield settling unchanged at 2.33%. Meanwhile, the U.S. Dollar Index dropped 0.4% to 94.42, and WTI crude futures climbed 0.6% to $57.14/bbl.
Elsewhere, Japan's Nikkei had an unnerving bout of volatility on Thursday before ending little changed (-0.2%), while the Euro Stoxx 50 tumbled 1.0%.
Reviewing Thursday's economic data, which was limited to the weekly Initial Claims Report and September Wholesale Inventories:
The latest weekly initial jobless claims count totaled 239,000, while the Briefing.com consensus expected a reading of 231,000. Today's tally was above the unrevised prior week count of 229,000. As for continuing claims, they rose to 1.901 million from the unrevised count of 1.884 million.
The key takeaway is that initial claims, which remained below 300,000 for the 140th straight week, are low and indicative of a tight labor market.
September Wholesale Inventories increased 0.3% (Briefing.com consensus +0.3%). The prior month's reading was revised to +0.8% from +0.9%.
The key takeaway from the report is that the sales increase outpaced the inventory increase by a sizable margin, which is a step in the right direction for wholesalers trying to regain some pricing power.
On Friday, investors will receive two economic reports--the preliminary reading of the University of Michigan Consumer Sentiment Index for November (Briefing.com consensus 100.5) and the October Treasury Budget. The two reports will be released at 10:00 ET and 14:00 ET, respectively.
Nasdaq Composite +25.4% YTD
Dow Jones Industrial Average +18.7% YTD
S&P 500 +15.5% YTD
Russell 2000 +8.7% YTD
Slim Victory Leaves Stocks at Fresh Record Highs
08-Nov-17 16:30 ET
Dow +6.13 at 23563.36, Nasdaq +21.34 at 6789.13, S&P +3.74 at 2594.38
https://www.briefing.com/investor/markets/stock-market-update/2017/11/8/slim-victory-leaves-stocks-at-fresh-record-highs.htm
[BRIEFING.COM] Equities ticked higher on Wednesday, with all three major indices--the Nasdaq (+0.3%), the S&P 500 (+0.1%), and the Dow (unch)--finishing at new record highs.
Technology shares outperformed in the midweek session, with video game developers showing particular strength. Take-Two Interactive (TTWO 117.65, +11.26)--which owns labels like Rockstar Games and 2K Games--jumped 10.6% after reporting better-than-expected revenues for its fiscal second quarter and issuing above-consensus sales guidance for the holiday season.
Meanwhile, the S&P 500's consumer staples sector finished at the top of the sector standings, settling higher by 1.1%. Heavyweights like Wal-Mart (WMT 90.26, +1.31), PepsiCo (PEP 112.00, +1.53), Kraft Heinz (KHC 79.58, +1.40), Costco (COST 169.05, +2.77), and Walgreens Boot Alliance (WBA 68.90, +0.98) all finished with gains between 1.4% and 1.8%.
Conversely, the heavily-weighted financial sector (-0.6%) moved lower for the fourth session in a row, keeping the broader market's gain in check. Within the group, lenders like Bank of America (BAC 26.79, -0.39), Wells Fargo (WFC 54.26, -0.79), and JPMorgan Chase (JPM 97.64, -1.11) finished with losses between 1.1% and 1.4%.
In other corporate news, Snap (SNAP 12.91, -2.21) tumbled 14.6% after reporting below-consensus revenues and daily active user growth for the third quarter. Snap shares were down as much as 22.0% in overnight trading, but strengthened following news that Chinese tech giant Tencent (TCEHY 49.77, +0.01) has purchased a 12.0% stake in the social media company.
Shares of Time Warner (TWX 88.50, -6.16) also declined on Wednesday, finishing lower by 6.5%, following a Financial Times report that the U.S. Department of Justice may force the company to sell CNN in order to be acquired by AT&T (T 33.44, +0.37). An alternative option would be selling AT&T's satellite television unit DirecTV--according to the New York Times.
Elsewhere, crude oil futures had a volatile session following the Department of Energy's weekly inventory report, which showed that U.S. stockpiles unexpectedly increased by 2.2 million barrels last week. In the end, WTI crude futures settled lower by 0.4% at a price of $56.81/bbl, and energy stocks within the S&P 500 finished behind the broader market, moving lower by 0.4%.
U.S. Treasures moved lower during the midweek session, sending yields higher across the curve; the benchmark 10-yr yield climbed two basis points to 2.33%. Meanwhile, the U.S. Dollar Index slipped 0.1% to 94.75, gold climbed 0.6% to $1,283.70/ozt, and the CBOE Volatility Index (VIX 9.76, -0.13) dropped 1.3%.
Wednesday's economic data was limited to the weekly MBA Mortgage Applications Index--which was unchanged from the prior week.
On Thursday, investors will receive two economic reports--the weekly Initial Claims Report (Briefing.com consensus 231K) and September Wholesale Inventories (Briefing.com consensus +0.3%). The two pieces of data will be released at 8:30 ET and 10:00 ET, respectively.
In addition, the Senate's version of a tax reform bill is scheduled to be released on Thursday.
Nasdaq Composite +26.1% YTD
Dow Jones Industrial Average +19.2% YTD
S&P 500 +15.9% YTD
Russell 2000 +9.2% YTD
Energy Shares Fuel Modest Victory on Monday
06-Nov-17 16:30 ET
Dow +9.23 at 23548.42, Nasdaq +22.00 at 6786.44, S&P +3.29 at 2591.13
https://www.briefing.com/investor/markets/stock-market-update/2017/11/6/energy-shares-fuel-modest-victory-on-monday.htm
[BRIEFING.COM] The U.S. equity market ticked higher on Monday, with all three major indices rewriting the record highs they posted on Friday. The Nasdaq and the S&P 500 added 0.3% and 0.1%, respectively, while the Dow (unch) eked out a narrow victory. The major indices traded within a pretty narrow range from start to finish.
Energy stocks led Monday's advance as the price of crude oil rallied to its highest level since July 2015; WTI crude futures finished higher by 3.0% at $57.29/bbl. The price increase followed a weekend purge in Saudi Arabia, in which Crown Prince Mohammed bin Salman imprisoned dozens of princes, ministers, and ex-ministers on allegations of corruption. The S&P 500's energy sector finished at the top of the day's sector standings with a gain of 2.2%.
The consumer discretionary sector (+0.7%) also finished comfortably ahead of the broader market. Within the group, 21st Century Fox (FOXA 27.45, +2.48) and Walt Disney (DIS 100.64, +2.00) jumped 9.9% and 2.0%, respectively, following a CNBC report that the two companies have discussed a deal in recent weeks that would result in Disney owning most of 21st Century Fox. Meanwhile, Michael Kors (KORS 54.62, +7.00) surged 14.7% after reporting better-than-expected earnings and revenues.
Conversely, telecoms within the S&P 500 struggled on Monday, losing 2.4%, after Sprint (S 5.90, -0.77) and T-Mobile US (TMUS 55.54, -3.37) announced that they failed to reach a merger agreement; the two companies lost 11.5% and 5.7%, respectively. However, Charter Communications (CHTR 348.40, +12.97) jumped 3.9% following reports that Softbank--the parent company of Sprint--is now willing to re-explore acquisition talks with the company.
The consumer staples sector (-1.1%) also underperformed amid broad weakness. Within the group, pharmacy retailer CVS Health (CVS 66.80, -2.45) and food distributor Sysco (SYY 54.17, -2.49) dropped 3.5% and 4.4%, respectively, despite reporting above-consensus earnings.
In other corporate news, Broadcom (AVGO 277.52, +3.89) submitted a $70 per share takeover offer for Qualcomm (QCOM 62.52, +0.71), which, if completed, would mark the largest technology acquisition in history. However, CNBC reported that Qualcomm is expected to reject Broadcom's offer. The two chipmakers finished with respective gains of 1.4% and 1.2%.
Elsewhere, U.S. Treasuries finished mostly higher, with the yield on the benchmark 10-yr Treasury note slipping two basis points to 2.32%. However, the 2-yr Treasury note bucked the trend, sending its yield one basis point higher to 1.62%. Meanwhile, the U.S. Dollar Index slid 0.2% to 94.63.
Also of note, New York Fed President William Dudley announced his decision to retire in mid-2018. Mr. Dudley has headed the New York Fed since 2009.
Investors did not receive any economic data on Monday, but they will receive three reports on Tuesday--the NFIB Small Business Optimism Index at 7:00 ET, the September Job Openings and Labor Turnover Survey (JOLTS) at 10:00 ET, and September Consumer Credit (Briefing.com consensus $18.3 billion) at 15:00 ET.
Nasdaq Composite +26.1% YTD
Dow Jones Industrial Average +19.2% YTD
S&P 500 +15.7% YTD
Russell 2000 +10.4% YTD
Before the Open (Nov 6)
http://leavittbrothers.com/blog/index.php/2017/11/06/before-the-open-nov-6-6/
by admin on November 6, 2017
in Before the Open
Share Your Thoughts
Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets traded quietly and closed with a slight lean to the upside. China, Thailand and the Philippines posted gains; South Korea fell. Europe, Africa and the Middle East are trading mixed. Poland, Turkey, Denmark, South Africa, Kenya and Hungary are up; the UAE, Greece, Spain, Portugal and Austria are down. Futures in the States point towards a flat open for the cash market.
Webinar Series…
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Webinar: The Real Keys to Surviving and Making Solid Profits in the Market, Part I
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Webinar: The Real Keys to Surviving and Making Solid Profits in the Market, Part II
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Webinar: The Real Keys to Surviving and Making Solid Profits in the Market, Part III
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The dollar is flat. Oil and copper are up. Gold and silver are up. Bonds are up.
Stock headlines from barchart.com…
Cavium (CAVM +3.42%) jumped 14% in pre-market trading after the WSJ reported that Marvell Technology is in advanced talks to combine with Cavium. Marvell Technology (MRVL +1.26%) dropped 9% in pre-market trading on the news.
Dish Network (DISH -0.41%) was upgraded to ‘Buy’ from ‘Hold’ at Pivotal Research Group LLC with a price target of $65.
Berkshire Hathaway ({=BRK/A=}) lost almost 1% in after-hours trading after it reported Q3 operating EPS of $2,094, below consensus of $2,347.
Qualcomm (QCOM +12.71%) gained over 1% in after-hours trading after Nomura said that Broadcom paying $70 a share for Qualcomm feels a “little low.”
Host Hotels (HST +0.87%) was upgraded to ‘Outperform’ from ‘Market Perform’ at Wells Fargo Securities with a price target of $21.
Hyatt Hotels (H +0.97%) were downgraded to ‘Neutral’ from ‘Outperform’ at B Riley FBR.
Twitter (TWTR +0.96%) was upgraded to ‘Neutral’ from ‘Sell’ at Citigroup.
Electronics for Imaging (EFII +0.64%) was downgraded to ‘Equal-Weight’ from ‘Overweight’ at Barclays.
Hilton (HLT +0.99%) was downgraded to ‘Market Perform’ from ‘Outperform’ at Wells Fargo Securities.
TherapeuticsMD (TXMD -5.42%) rose over 3% in after-hours trading after it said it will provide a “TX-004HR regulatory update” with its Q3 earnings conference call Monday morning.
Sprint (S +3.73%) was downgraded to ‘Underweight’ from ‘Sector Weight’ at Keybanc Capital Markets with a 12-month target price of $5.50.
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Today’s Economic Calendar
12:30 PM TD Ameritrade IMX
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings from Morningstar
this week’s Economic Numbers/Reports powered by ECONODAY
InvestmentHouse - Manufacturing Jobs Continue to Impress (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- NASDAQ, SOX find large cap strength and lead higher.
- Big NASDAQ names, FAANG breakout of consolidations, attempting to assume
leadership once again.
- Tax plan leaves small and midcaps mostly out in the cold.
- Jobs report is not good in most respects but the manufacturing jobs
continue to impress and belie the prior administration's claims those jobs
were gone for good.
- Now we see if FAANG and company actually will lead.
The past week solidified more of a turn from the small and midcaps to the
large cap NASDAQ stocks. Not that the small and midcaps rolled over; no,
they are still testing good moves. What we saw, however, was a return to
some of the big names in FAANG and other large cap NASDAQ stocks that led
the market higher into mid-summer, then spent 3 to 4 to 5 months
consolidating in trading ranges. This earnings season broke them out of
their consolidations and they are testing the move (FB, MSFT) and in some
cases already starting back upside after the test (AVGO, AMZN, GOOG, TXN).
That helped push the indices higher with emphasis on SOX and NASDAQ while
SP500, DJ30 put in steady advances up the 10 day EMA. SP400 and RUTX did
not do much; SP400 continued a choppy move up the 10 day EMA while RUTX
continued a very volatile pullback around the 20 day EMA.
SP500 7.99, 0.31%
NASDAQ 49.50, 0.74%
DJ30 22.93, 0.10%
SP400 0.25%
RUTX -0.11%
SOX 1.77%
VOLUME: NYSE -10%, NASDAQ -3%. Above average volume on NASDAQ as it surged
to a new high. Volume faded to just above average on NYSE as it posted a
new high.
ADVANCE/DECLINE: NYSE -1.1:1; NASDAQ -1.02:1. It was all the large caps on
Friday. All large caps.
The tax proposal may still help small business and thus move RUTX and SP400
up out of their tests, but in reviewing the proposed tax plan the small
business pass-through tax treatment is rather complex (so much for the
postcard tax form Ryan touted) and is not as generous as that paid out to
the big C corporations. So, I guess you form a C corp to try and get the
20% rate (and have to worry about double taxation) or just take a modest tax
cut on the uppermost income the business makes and try to cram it into what
they consider 'capital income' and the 25% rate versus 'wage income' at the
39.6% rate. As the movie starring Alec Baldwin and Meryl Streep was titled,
"It's Complicated." Oh that is rich: more complex and not that much, if any
benefit.
But, I digress. The key for the market was the big name FAANG and other
NASDAQ stocks broke out from their consolidations/trading ranges. They look
as if they are ready to take back some leadership.
The key to any rally is a continued stream of leadership. These big names
led into the summer, small caps and midcaps took over along with industrial
names of all market caps, chips were in their own world as they rotated
among themselves higher and higher, and now the big names are back in the
leadership mix. Along the way China stocks led, biotechs made good
leadership moves, but then faded back in many cases. All of that is
rotation as some fall while others pick up the slack. That is healthy for
the market.
Throw into this that there are some potential new areas working upside, e.g.
new entries shaping up in retail, some telecom showing life, oil making some
moves -- and you have even more potential leaders or at least supporting
roles setting up to try and add to the upside.
Thus, though the stock market's rally seems rather implausible in that it is
still going after avoiding the traditional September and October weakness,
with the reemergence of the big names it appears the stock indices could
rally into yearend even without that traditional early fall selloff. A
tightening but gradual Fed, lower regulation making a difference (as seen in
the productivity numbers), still tax reform hope are all still driving
upside momentum.
NEWS/ECONOMY
Yes there was a jobs report Friday but it was an afterthought, something
that did not inhibit the action and would not unless it was too extreme one
way or the other. As it was the report was not that great. That was okay
for the market; I guess it assumed the Fed would be held to its prior
schedule.
October Jobs Report
Non-farm Jobs: 261K vs 300K vs 18K (from -33K); Aug revised up 39K, so 99K
jobs added back the 2 prior months.
Unemployment: 4.1 vs 4.2 vs 4.2. But, it was an exodus from the workforce
that caused the drop. Very similar to the Obama years; want to lower
unemployment, lower the number of workers. Magic.
Wages: 0.0 vs 0.1 vs 0.5 prior. Terrible wage performance in terms of the
drop off. Just no consistency.
Participation: 62.7%. Labor force -765K; total out of work force -968K.
'Yewge' drop out from the workforce with now a new record 95.385M people are
out of the work force.
Food and Drink: +89K
Biz Professional +50K
Manufacturing +24K. This is still pretty amazing as the percentage of
manufacturing jobs and not just the total number is WAY above the Obama
years when we were told thee jobs were gone for good. Hmm.
Retail -8400. Wow this happened relatively fast did it not? From being one
of the leading hiring groups to bleeding jobs the past six months.
Mining -2000. Back to negative after some gains.
THE MARKET
CHARTS
SOX: The past two Fridays saw chips scream upside. The prior week it was
earnings from INTC, TXN. This past Friday it was QCOM and AVGO as they
screamed higher on word AVGO may acquire QCOM. So AVGO came back to the US
with a lot of fanfare in order to buy QCOM? Hmm.
NASDAQ: Also a big mover over the Fridays with a general trend higher in
between. Rising above the 10 day EMA as NASDAQ looks impressive, not
surprising given the breakouts in the large caps on their earnings.
SP500: New closing high as it continues rising up the 10 day EMA. Not a
huge move but is working through its volatility, keeping the move higher
going.
DJ30: A slower week after leading the move two weeks back, still trending
up the 10 day EMA but letting others take the lead.
RUTX: Holding near the 20 day EMA in now the fifth week of pullback, and
struggling with a lot of volatility. The sellers and buyers are still
evenly matched as RUTX trades in big intraday ranges but holds its near
support.
SP400: Volatile as well, but working up the 10 day EMA nonetheless. Not as
volatile as RUTX and it is also maintaining its uptrend while it bounces
around intraday.
LEADERSHIP
FAANG: AMZN started back up after the test of its earnings report breakout.
FB showing a nice doji test of its break higher. AAPL gapped upside on its
earnings. GOOG continued higher on still not much volume. NFLX just
sliding modestly higher along the 10 day EMA.
Semiconductors: The potential AVGO/QCOM deal had the group very excited as
those stocks surged. AVGO was already better on the AAPL earnings as was
SWKS. ON, BRKS still moving higher as did TXN. MU remains solid. Some
wild moves, e.g. COHU sold off hard then reversed to hold its trend. QRVO
is interesting and some of the solar stocks such as JASO, FSLR look good.
Software: Tested more on the week e.g. VMW, but CRM moved higher on the
week. FFIV still looks as if it could move upside and CALD did blast
higher. DATA was a big disappointment on its earnings.
Oil: Some good setups again, but will they move? DO testing its earnings
move, SN looks really good to move higher. ESV, DVN and others look good.
Financial: Overall testing the moves, holding at the 10 day EMA, e.g. JPM,
BAC, though they are getting ready to move.
Retail: WMT continues higher. AMZN started to bounce from its test. CONN
looks ready to bounce. TLRD still in a nice test. Some very solid, some
not, some trying to hang on, e.g. HD.
Machinery/Manufacturing: Started cracking as EMR, TEX, CMI really struggled
on the week. CAT, HOLI still nice.
Telecom: setting up in some key names. CAMP looks very good. GLW in a cup
with handle after a surge two weeks back.
MARKET STATS
DJ30
Stats: +22.93 points (+0.10%) to close at 23539.19
Nasdaq
Stats: +49.49 points (+0.74%) to close at 6764.44
Volume: 2.2B (-3.08%)
Up Volume: 1.34B (+250M)
Down Volume: 812.21M (-337.79M)
A/D and Hi/Lo: Decliners led 1.02 to 1
Previous Session: Advancers led 1.3 to 1
New Highs: 156 (+28)
New Lows: 83 (+7)
S&P
Stats: +7.99 points (+0.31%) to close at 2587.84
NYSE Volume: 810.6M (-9.93%)
A/D and Hi/Lo: Decliners led 1.08 to 1
Previous Session: Decliners led 1.02 to 1
New Highs: 138 (-17)
New Lows: 80 (-12)
SENTIMENT INDICATORS
VIX: 9.14; -0.79
VXN: 13.90; -0.80
VXO: 8.09; -0.69
Put/Call Ratio (CBOE): 0.94; +0.07
Bulls and Bears: Bulls continue rising for the fourth week over 60.0 and
bears fall to lows not seen since 2014 and 2015. 60+ has been a governor on
market rises, but it is not an immediate cause and effect. In other words,
you hit the levels, but the market can continue to rally.
Bulls: 63.5 versus 62.3
Bears: 14.4 versus 15.1
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 63.5 versus 62.3
62.3 versus 60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5 versus 47.1
versus 49.5 versus 49.5 versus 48.1 versus 50.5 versus 57.5 versus 60.0
versus 60.2 versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5
versus 50.00 versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus 58.7
versus 58.5 versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 49.5
versus 56.7 versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8
versus 62.7 versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2
versus 59.8 versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6
versus 51.0 versus 42.9 versus 41.7 versus 47.1 versus 42.9
Bears: 14.4 versus 15.1
15.1 versus 15.2 versus 15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2
versus 19.1 versus 19.1 versus 18.3 versus 18.1 versus 17.0 versus 16.2
versus 16.5 versus 16.7 versus 18.6 versus 18.8 versus 18.6 versus 18.3
versus 19.2 versus 18.3 versus 17.1 versus 17.3 versus 17.9 versus 17.9
versus 18.3 versus 17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75
versus 17.3 versus 16.5 versus 17.5 versus 17.6 versus 16.7 versus 17.6
versus 17.5 versus 17.3 versus 18.3 versus 18.4 versus 19.6 versus 19.6
versus 19.2 versus 19.6 versus 22.3 versus 21.6 versus 23.5 versus 25.7
versus 24.3 versus 23.1 versus 23.8 versus 23.1 versus 22.8 versus 23.1
versus 24.3
OTHER MARKETS
Bonds: 2.332% versus 2.349%. Bonds rallied for another week, making it to
the 50 day SMA and the mid-October high. Okay, serious resistance here.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.349%
versus 2.358% versus 2.378% versus 2.37% versus 2.419% versus 2.456% versus
2.435% versus 2.421% versus 2.366% versus 2.383% versus 2.318% versus 2.341%
versus 2.30% versus 2.302% versus 2.275% versus 2.321% versus 2.345% versus
2.345% versus 2.361% versus 2.348% versus 2.327% versus 2.326% versus 2.341%
versus 2.339% versus 2.312% versus 2.307% versus 2.236% versus 2.222% versus
2.253% versus 2.276% versus 2.273% versus 2.246% versus 2.234% versus 2.201%
versus 2.186% versus 2.19% versus 2.167% versus 2.134% versus 2.042%
EUR/USD: 1.16092 versus 1.16575. After moving up to the 10 day EMA in a
recovery move, Friday the euro started lower again. The rounded top looks to
be in against the dollar and the euro is heading lower.
Historical: 1.16575 versus 1.15480 versus 1.1644 versus 1.16091 versus
1.16330 versus 1.18163 versus 1.17570 versus 1.1759 versus 1.17798 versus
1.18476 versus 1.17995 versus 1.1771 versus 1.17932 versus 1.1823 versus
1.1834 versus 1.18662 versus 1.1813 versus 1.17460 versus 1.17352 versus
1.17100 versus 1.1754 versus 1.17676 versus 1.17315 versus 1.1812 versus
1.17817 versus 1.1746 versus 1.17852 versus 1.18540 versus 1.19476 versus
1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus 1.1918 versus
1.1874 versus 1.19706 versus 1.19551 versus 1.20379 versus 1.2025 versus
1.19258 versus 1.19143 versus 1.18621 versus 1.19131 versus 1.18938 versus
1.19731 versus 1.19678 versus 1.19212 versus 1.18 versus 1.17516 versus
1.1813 versus 1.17595 versus 1.17107 versus 1.17812 versus 1.17445 versus
1.17751 versus 1.18216 versus 1.17652 versus 1.17596 versus 1.17619 versus
1.17975 versus 1.1774 versus 1.18718 versus 1.18457 versus 1.18072 versus
1.18281 versus 1.18293 versus 1.1683 versus 1.17419 versus 1.1646 versus
1.1637 versus 1.16640 versus 1.16271 versus 1.15280 versus 1.15549 versus
1.14735
USD/JPY: 114.064 versus 114.010. Rallied back to the prior week's high and
the July high. First real test of the new move upside.
Historical: 114.010 versus 114.010 versus 113.845 versus 113.640 versus
113.175 versus 113.675 versus 114.071 versus 113.607 versus 113.913 versus
113.31 versus 113.530 versus 112.561 versus 113.031 versus 112.21 versus
112.20 versus 111.852 versus 112.25 versus 112.413 versus 112.41 versus
112.700 versus 112.653 versus 112.818 versus 112.79 versus 112.667 versus
112.716 versus 112.442 versus 112.86 versus 112.289 versus 111.649 versus
1.12125 versus 111.995 versus 112.454 versus 111.559 versus 111.435 versus
110.846 versus 110.01 versus 110.62 versus 110.216 versus 109.434 versus
107.847 versus 108.444 versus 109.132 versus 108.747 versus 110.254 versus
110.049 versus 110.289 versus 109.652 versus 108.04 versus 109.160 versus
109.573 versus 109.195 versus 109.648 versus 109.173 versus 109.205 versus
109.333 versus 109.842 versus 110.6621 versus 109.927
Oil: 55.64, +1.10. Breaking through the top of the range. Okay, oil is
now trying the breakout.
Gold: 1269.20, -8.90. Still trying to get off the second bottom at the 200
day SMA.
MONDAY
A huge week of data and decisions and earnings, and now another week of
earnings as the season, similar to professional basketball, seems
interminable.
As noted in the opening, despite all the data and the Fed intrigue and
earnings, it is the action in the NASDAQ large caps that held the week's
key. Earnings certainly aided: these stocks were set to move and the
earnings helped them make the breaks. Good tests have them set to move
higher. We picked up some FB Friday, looking at AMZN this week, and still
looking at GOOG as well.
Other big names in chips, software, even drugs worked and we let positions
run, picked up new ones, and plan on picking up more.
Yes that sounds bullish, and with sentiment over 60.0 for a month, that is a
bit worrisome. The market, however, keeps rotating and finding new
leadership or should I say recycled leadership in the case of the NASDAQ
large caps and FAANG? It appears that way.
That keeps us looking for upside plays -- with a smattering of downside here
and there in those sectors that were leading but are in the process of
testing.
There is news this weekend as Saudi Arabia, under its new prince, cleans
house in what is described as fighting corruption. That has Prince CNBC
(Alwaleed Bin Talal) arrested on corruption charges. Saudi also said it
intercepted a missile from Yemen aimed at one of Saudi's airfields near its
capitol. Maybe that means something, but it won't to this market.
Plenty of bullishness for certain, but as I noted last week again after
discussing it over a month ago, all of those billionaire money managers that
so loudly proclaimed they were out of the market because it was surely ready
to crash those that followed their advice are being forced back into the
market. That provides the fuel to continue the move because their billions
are now what helps drive the market higher.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6754.44
Resistance:
More new highs
Support:
6641 is the October high
The 20 day EMA at 6637
The 50 day EMA at 6534
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 2016 trendline at 6446
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
The 200 day SMA at 6164
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2587.84
Resistance:
New highs again
Support:
The 20 day EMA at 2563
2531 is the upper channel line from the March 2009 uptrend channel
The 50 day EMA at 2530
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
The 200 day SMA at 2426
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 23,539.19
Resistance:
Support:
The 10 day EMA at 23,384
The 50 day EMA at 22,736
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
The 200 day SMA at 21,338
21,169 is the March 2017 all-time high
Wall Street Ends Busy Session Little Changed
02-Nov-17 16:30 ET
Dow +81.25 at 23516.26, Nasdaq -1.59 at 6714.93, S&P +0.49 at 2579.85
https://www.briefing.com/investor/markets/stock-market-update/2017/11/2/wall-street-ends-busy-session-little-changed.htm
[BRIEFING.COM] Equities ended Thursday little changed after a late-afternoon rally trimmed modest losses from earlier in the session. The S&P 500 ended a tick above its flat line, while the Nasdaq finished slightly lower and the Dow (+0.4%) outperformed, settling at a new record high. Small caps had a good showing, pushing the Russell 2000 higher by 0.3%.
Highlights of the House's tax reform bill include an immediate--and permanent--reduction in the corporate tax rate from 35.0% to 20.0%, a repeal of state and local tax deductions--with the exception of a $10,000 limit for property taxes, a limit for mortgage interest deductions on new home loans of less than $500,000 (adjusted from $1,000,000), and no major changes to 401(k) tax laws.
The bill also calls for reducing the number of tax brackets from seven to four--12%, 25%, 35%, and 39.6%--with the rate for top earners remaining unchanged.
Stocks initially sold off after the media leaked details of the bill in the morning, but the market bounced back soon thereafter. Financials helped fuel the turnaround and remained strong for the remainder of the session; the S&P 500's financial sector finished with a gain of 0.9%. The industrials (+0.5%), utilities (+0.4%), and real estate (+0.9%) groups also outperformed.
Meanwhile, the technology sector (+0.1%) manged to eke out a slim victory, but was weighed down by Facebook (FB 178.92, -3.74), which dropped 2.1% despite reporting better-than-expected earnings and revenues. Conversely, chipmaker Qualcomm (QCOM 54.84, +1.38) jumped 2.6% after beating both top and bottom line estimates.
In other earnings news, Tesla (TSLA 299.26, -21.82) plunged 6.8% after reporting worse-than-expected earnings and delaying its Model 3 production target of 5,000 per week by another quarter. Newell Brands (NWL 30.01, -10.99)--which owns names like Sharpie, Crock-Pot, and Yankee Candle--also tumbled, losing 26.8%, after missing earnings estimates and cutting its outlook.
Dow component DowDuPont (DWDP 72.04, -1.28) also declined, losing 1.8%, despite reporting above-consensus earnings. The materials sector (-0.8%), which houses DowDuPont, finished near the bottom of the sector standings, alongside the telecom services (-1.0%) and consumer discretionary (-0.8%) groups.
Elsewhere, the Bank of England announced its first rate hike in a decade, increasing the Bank Rate by 25 basis points to 0.50% in a 7-2 vote. However, the British pound dropped 1.4% against the U.S. dollar to 1.3064, hitting a fresh one-month low.
In the bond market, U.S. Treasuries climbed in a curve-flattening trade; the yield on the benchmark 10-yr Treasury note dropped three basis points to 2.35%, while the 2-yr yield slipped one basis point to 1.62%. Yields move inversely to prices.
Also of note, President Trump nominated Fed Governor Jerome Powell to replace Fed Chair Janet Yellen when her term ends in February--as expected.
Reviewing Thursday's economic data, which included third quarter Productivity, third quarter Unit Labor Costs, and the weekly Initial Claims Report:
The preliminary unit labor costs ticked up 0.5% during the third quarter, while the Briefing.com consensus expected no change (0.0%). The preliminary productivity reading showed an increase of 3.0%, while the Briefing.com consensus expected an increase of 2.8%.
The key takeaway from the productivity report is that it was the highest quarterly increase since the third quarter of 2014, offering a hopeful sign that U.S. economic activity and workers' standard of living will be improving.
The latest weekly initial jobless claims count totaled 229,000, while the Briefing.com consensus expected a reading of 235,000. Today's tally was below the revised prior week count of 234,000 (from 233,000). As for continuing claims, they declined to 1.884 million from the revised count of 1.899 million (from 1.893 million).
The key takeaway is the initial claims are holding at historically low levels, underscoring the tightness in the labor market.
On Friday, investors will receive the Employment Situation Report for October (Briefing.com consensus 300K) at 8:30 ET, the September Trade Balance (Briefing.com consensus -$43.5 billion) also at 8:30 ET, and both the October ISM Services Index (Briefing.com consensus 58.5) and September Factory Orders at 10:00 ET.
Nasdaq Composite +24.7% YTD
Dow Jones Industrial Average +19.0% YTD
S&P 500 +15.2% YTD
Russell 2000 +10.3% YTD
Mixed Outing in the Midweek Session
01-Nov-17 16:30 ET
Dow +57.77 at 23435.01, Nasdaq -11.14 at 6716.52, S&P +4.10 at 2579.36
https://www.briefing.com/investor/markets/stock-market-update/2017/11/1/mixed-outing-in-the-midweek-session.htm
[BRIEFING.COM] Stocks touched record highs at Wednesday's opening bell, but the bullish sentiment was quickly stifled, leaving the market little changed. The major indices finished the session mixed, settling in the lower half of their trading ranges. The Dow and the S&P 500 added 0.3% and 0.2%, respectively, while the Nasdaq slipped 0.2%. Small caps struggled, sending the Russell 2000 lower by 0.7%.
The Federal Open Market Committee announced its latest policy decision on Wednesday afternoon, but the event came and went without much impact on the financial markets. As expected, the FOMC voted unanimously to leave the fed funds target range at 1.00%-1.25% and reiterated its belief that the economy will continue to expand at a moderate pace.
Wednesday's policy statement did little to alter the market's belief that the Fed will hike rates at the December FOMC meeting, evidenced by the CME FedWatch Tool--which places the chances of a December rate hike at 98.2%. On a related note, President Trump is expected to unveil his Fed Chair nominee on Thursday, with reports indicating that it'll likely be Fed Governor Jerome Powell.
In addition, House Republicans say they'll release their tax reform bill on Thursday--one day later than their original self-imposed deadline.
Energy stocks led Wednesday's modest rally, even though WTI crude futures declined 0.4% to $54.18/bbl. Crude oil held a gain of more than 1.0% early in the session, but moved back to its flat line after the Energy Information Administration reported that U.S. crude stockpiles declined by 2.4 million barrels last week. Still, the commodity finished near an eight-month high.
The S&P 500's energy sector added 1.1%, but gains from the other groups were pretty modest. The consumer staples space was one of the top performers outside of energy, adding 0.3%, thanks in part to cosmetic giant Estee Lauder (EL 122.12, +10.31), which surged 9.2% on better-than-expected earnings and revenues.
Meanwhile, the materials sector (+0.6%) also outperformed, with DowDuPont (DWDP 73.32, +1.01) adding 1.4% before its Thursday morning earnings release.
On the flip side, Apple (AAPL 166.89, -2.15) struggled on Wednesday, losing 1.3%, following three straight sessions of big gains. The tech giant will report earnings on Thursday evening and goes into Thursday's session with an incredible year-to-date gain of 44.1%. With a market cap of around $860 billion, Apple is the largest component within the S&P 500.
Telecom stocks continued their bearish 2017 campaign in the midweek session, with CenturyLink (CTL 17.85, -1.14) pacing the retreat. The company finished with a loss of 6.0% after completing its acquisition of Level 3 Communications--a process that took nearly a year. The S&P 500's telecom services sector declined by 0.5%, extending its year-to-date loss to 16.4%.
In the bond market, U.S. Treasuries finished mostly lower, but longer-dated issues showed relative strength. The yield on the 2-yr Treasury note climbed four basis points to 1.63%, while the benchmark 10-yr yield finished flat at 2.38%. Generally speaking, Treasuries ticked lower following the Fed's policy release. Meanwhile, the U.S. Dollar Index finished higher by 0.3% at 94.69.
Reviewing Wednesday's economic data, which included the October ADP Employment Change Report, the October ISM Index, September Construction Spending, and the weekly MBA Mortgage Applications Index:
The ADP National Employment Report showed an increase of 235,000 in October (Briefing.com consensus 215,000). The September reading was left unrevised at 135,000.
The ISM Index for October declined to 58.7 from an unrevised reading of 60.8 in September, while the Briefing.com consensus expected a downtick to 59.0.
The key takeaway from the report is that manufacturing conditions remain solid, as the October dip is most likely just a cooling off from what was a very hot September reading.
The Construction Spending report for October rose 0.3%, while the Briefing.com consensus expected a decrease of 0.2%. The prior month's increase was revised to 0.1% from 0.5%.
The key takeaway from the report is that overall construction spending remains modest and an inhibitor of stronger real GDP growth.
The weekly MBA Mortgage Applications Index decreased 2.6% to follow last week's 4.6% decline.
On Thursday, investors will receive the weekly Initial Claims Report (Briefing.com consensus 235K), third quarter Productivity (Briefing.com consensus 2.8%), and third quarter Unit Labor Costs (Briefing.com consensus 0.0%)--all of which will be released at 8:30 ET.
Nasdaq Composite +24.8% YTD
Dow Jones Industrial Average +18.6% YTD
S&P 500 +15.2% YTD
Russell 2000 +10.0% YTD
Slim Victory Leaves Nasdaq at Record High
31-Oct-17 16:30 ET
Dow +28.50 at 23377.24, Nasdaq +28.71 at 6727.66, S&P +2.43 at 2575.26
https://www.briefing.com/investor/markets/stock-market-update/2017/10/31/slim-victory-leaves-nasdaq-at-record-high.htm
[BRIEFING.COM] Equities ticked higher on Tuesday, ending the session near their opening marks. The Nasdaq (+0.4%) outperformed both the S&P 500 (+0.1%) and the Dow (+0.1%), finishing at a new record high. Meanwhile, small caps did even better, sending the Russell 2000 higher by 0.8%.
The S&P 500's consumer staples sector (+0.8%) paced Tuesday's advance, thanks in large part to Mondelez International (MDLZ 41.43, +2.13)--the owner of brands like Oreo, Trident, and Chips Ahoy!--and Kellogg (K 62.53, +3.66)--which houses brands like Froot Loops and Pringles. The two companies jumped 5.4% and 6.2%, respectively, after reporting better-than-expected earnings and revenues.
Within the Dow Jones Industrial Average, Intel (INTC 45.49, +1.12) was the strongest component, adding 2.5%, following a Wall Street Journal report that Apple (AAPL 169.04, +2.32) could use the chipmaker's hardware, instead of Qualcomm's (QCOM 51.01, -3.65), in future iPhones and iPads. QCOM shares moved in the opposite direction, losing 6.7%.
As a reminder, Apple and Qualcomm are currently in a legal battle, with Apple alleging that Qualcomm has unfairly used its monopoly position as a manufacturer of baseband processors.
The price of crude oil climbed on Tuesday, helping the S&P 500's energy sector (+0.4%) finish near the top of the sector standings. WTI crude futures finished the session higher by 0.4%, at a price of $54.35/bbl--which marks the commodity's best close since late February. Over the last three weeks, WTI crude has climbed more than 10.0%.
Conversely, health care stocks struggled, with Mylan (MYL 35.71, -2.53) leading the retreat. The pharmaceutical company plunged 6.6% after Bloomberg reported that executive Rajiv Malik is the target of a multi-state investigation into generic drug price collusion. Pfizer (PFE 35.06, -0.09) also underperformed, slipping 0.3%, despite reporting above-consensus third quarter earnings.
The heavily-weighted financial sector (-0.3%) also moved lower, as did the industrials (-0.4%) and consumer discretionary (-0.1%) groups. Within the consumer discretionary space, Under Armour (UAA 12.52, -3.89) was by far the weakest performer, plunging 23.7%, after cutting its outlook for the full year and reporting its first quarterly fall in revenue since going public back in 2005.
Outside the equity market, U.S. Treasuries finished modestly lower, with shorter-dated issues showing particular weakness; the yield on the benchmark 10-yr Treasury note climbed one basis point to 2.38%, while the 2-yr yield jumped three basis points to 1.59%. Meanwhile, the U.S. Dollar Index climbed 0.1% to 94.44.
The Federal Open Market Committee began a two-day policy meeting on Tuesday, but its latest policy directive--which will be released on Wednesday afternoon--is not expected to do much more than set the stage for a December rate hike. The CME FedWatch Tool currently places the chances of a December rate hike at 99.5%.
Reviewing Tuesday's economic data, which included the third quarter Employment Cost Index, the October Chicago PMI, October Consumer Confidence, and the August S&P Case-Shiller Home Price Index:
The third quarter Employment Cost Index rose 0.7%, while the Briefing.com consensus expected an increase of 0.6%.
The key takeaway is that there was a slight pickup in compensation costs in the third quarter, but not enough to trigger any undue inflation alarm.
Chicago PMI for October hit 66.2 (Briefing.com consensus 61.0), up from 65.2 in September.
The key takeaway from the report is that manufacturing conditions are strong in the Chicago Fed region, underscored by the New Orders Index hitting its highest level (69.9) since June and the second highest since May 2014.
The consumer confidence reading for October increased to 125.9 from the prior month's revised reading of 120.6 (from 119.8). The Briefing.com consensus expected the survey to hit 121.5.
The key takeaway from the report is that upbeat attitudes about the current job market factored prominently in the elevated reading, which is a hopeful indication for stronger consumer spending activity.
The Case-Shiller 20-city Index increased 5.9% in August.
On Wednesday, investors will receive the weekly MBA Mortgage Applications Index at 7:00 ET, the October ADP Employment Change Report (Briefing.com consensus 215K) at 8:15 ET, the October ISM Index (Briefing.com consensus 59.0) at 10:00 ET, September Construction Spending (Briefing.com consensus -0.2%) also at 10:00 ET, and the latest FOMC policy decision at 14:00 ET.
In addition, auto and truck sales for the month of October will be released throughout the day, and the House is scheduled to release its tax reform bill.
Nasdaq Composite +25.0% YTD
Dow Jones Industrial Average +18.3% YTD
S&P 500 +15.0% YTD
Russell 2000 +10.7% YTD
Slipping From Record Highs
30-Oct-17 16:30 ET
Dow -85.45 at 23348.74, Nasdaq -2.30 at 6698.95, S&P -8.24 at 2572.83
https://www.briefing.com/investor/markets/stock-market-update/2017/10/30/slipping-from-record-highs.htm
[BRIEFING.COM] The U.S. equity market retreated from record highs on Monday as investors engaged in a little profit taking ahead of another busy week. The Nasdaq touched a new record high early in the session, but eventually settled just a tick below its flat line. The S&P 500 and the Dow finished with respective losses of 0.3% and 0.4%, while the small-cap Russell 2000 underperformed, dropping 1.2%.
After opening modestly lower, the stock market looked as if it might take a stab at another record high, but a Bloomberg report that the House is considering a gradual phase-in approach for reducing the corporate tax rate prompted a sharp, but modest, sell off. The White House later said that President Trump does not support a phase-in approach, but equities continued trending sideways at session lows.
Telecoms paced Monday's retreat after the Nikkei Asian Review reported that Sprint's (S 6.34, -0.65) parent company, SoftBank, plans to end merger talks between Sprint and T-Mobile US (TMUS 59.58, -3.37). The two wireless names moved sharply lower following the report, but pared some of their losses after CNBC's David Faber said parts of the report were untrue.
Still, the two companies finished solidly lower, dropping 9.3% and 5.4%, respectively, and the S&P 500's telecom services sector lost 1.4%.
The health care sector (-1.1%) also struggled on Monday, with Dow component Merck (MRK 54.71, -3.53) showing particular weakness. The pharmaceutical giant tumbled 6.1% after announcing on Friday that it withdrew its European application for its cancer drug Keytruda. Morgan Stanley, Barclays, and SunTrust each downgraded the company following the announcement.
On a positive note, Apple (AAPL 166.72, +3.67) climbed 2.3% to settle at a fresh record high. The tech giant has added 5.9% over the last two sessions after the company announced that demand for its new iPhone X has been "off the charts" and following upbeat earnings from fellow mega caps Amazon (AMZN 1110.85, +9.90), Microsoft (MSFT 83.89, +0.08), and Alphabet (GOOG 1017.11, -2.16).
Apple, which is the largest company in the S&P 500 by market cap, will report earnings on Thursday evening.
In the bond market, U.S. Treasuries ended Monday with solid gains, erasing their losses from last week; the yield on the benchmark 10-yr Treasury note dropped five basis points to 2.37%. News of a potential phase-in approach for reducing the corporate tax rate (as mentioned above) and another lukewarm reading for the PCE Price Index helped fuel the rally.
Reviewing Monday's economic data, which included September Personal Income, Personal Spending, and PCE Prices:
Personal income ticked up 0.4% in September (Briefing.com consensus +0.3%) following an unrevised increase of 0.2% in August. Personal spending rose 1.0% (Briefing.com consensus +0.8%), while the prior month's uptick was left unrevised at 0.1%. The PCE Price Index jumped 0.4% (Briefing.com consensus +0.4%), while the core PCE Price Index--which excludes food and energy--increased 0.1% (Briefing.com consensus +0.1%). The PCE Price Index is the Fed's preferred inflation gauge.
With the September increases, the PCE Price Index is up 1.6% year-over-year, versus up 1.4% for August, while the core PCE Price Index is up 1.3%, unchanged from August. The key takeaway is that the PCE price data won't trigger any major inflation alarm, yet it also won't be seen as persuading the Fed from raising the fed funds rate at its December meeting.
On Tuesday, investors will receive several pieces of data, including the third quarter Employment Cost Index (Briefing.com consensus 0.6%) at 8:30 ET, the August S&P Case-Shiller Home Price Index (Briefing.com consensus 5.9%) at 9:00 ET, the October Chicago PMI (Briefing.com consensus 61.0) at 9:45 ET, and October Consumer Confidence (Briefing.com consensus 121.5) at 10:00 ET.
Nasdaq Composite +24.4% YTD
Dow Jones Industrial Average +18.2% YTD
S&P 500 +14.9% YTD
Russell 2000 +9.9% YTD
InvestmentHouse - Q3 GDP Beats Upside for Back to Back 3% Gains (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- Earnings of the mega caps blast NASDAQ, SOX higher.
- Strong moves, narrow breadth.
- Q3 GDP beats upside for back to back 3% gains. Inventories rise
presumptively in anticipation of Q4 holiday sales.
- Stock buybacks down 15% but authorizations are up.
- Some of the big names still in the buy zone and we see other forgotten
names setting up a familiar upside pattern that has returned nice gains.
- Big question: was Friday the start of a new break higher based on new
rotation?
Friday showed definitely no earnings or good news saturation in the stock
market as a sack full of strong earnings provided the fuel for new breaks
higher and new highs for NASDAQ, SP400, SP500 and SOX, and a solid break
higher for RUTX off its test. FB, AMZN, GOOG, AAPL, MSFT, INTC all broke
out as well. Impressive moves and of course all of the financial station
analysts were spluttering all over themselves as is always the case when
there are impressive moves. That is okay; GOOG and others show strong
breakout moves.
SP500 20.67, 0.81%
NASDAQ 144.49, 2.20%
DJ30 33.33, 0.14%
SP500 0.54%
RUTX 0.73%
SOX 2.14%
NASDAQ 100 2.91%
VOLUME: NYSE +2%, NASDAQ +14%. NYSE volume moved a bit farther above
average, matching Wednesday, showing some good accumulation. NASDAQ volume
jumped to the highest in six weeks as it gapped and rallied. Plenty of
NASDAQ accumulation, but in what stocks?
ADVANCE/DECLINE: NYSE 1.65:1, NASDAQ 1.7:1. The breadth shows you which
stocks: the large cap stocks. Huge percentage moves on NASDAQ and SOX and
very decent gains on SP500 and even RUTX. But breadth was paltry by
comparison. It was a large cap move. Not that there is anything wrong with
that -- for the short term.
Impressive breakout move but not a broad move. Money poured into the FAANG
and large cap tech stocks. It stayed in software, machinery, retail,
financial, semiconductors -- most of the same leaders. It continued out of
China stocks and biotechs, very solid leadership groups that are not so
solid now.
With still solid leadership groups and big funds finding love again in FAANG
and massive cap tech, it could be this is a new breakout for a new run
higher. Money moving into new areas fuels moves and everyone has seen how
when money goes to FAANG NASDAQ moves up.
The other side of the coin is this good news is being piled on top of
already reported good news and could be the last hurrah of money moving in
on this earnings season. That would mean the market has hit or is near the
good news saturation point, something discussed over the past week. So one
question is whether the Friday action was the last great surge of this last
part of the rally?
Whether this is a saturation point gap remains to be seen, but other than
overall weak breadth Friday the moves did not have that look. We will wait
and see how they shake out to start the coming week as per the plan, but we
are ready to play upside off of these moves if they set up. The moves were
too strong not to be ready for that.
Moreover, it was not just these gap moves Friday. There are many stocks
again setting up patterns after long declines, trying to 'turn the corner'
back to the upside out of these bases. The semiconductors did this and we
made a lot of money on them. The China stocks did this and the same
outcome. Biotech stocks. Financial stocks. Hated, loathed, despised
downtrodden groups that had the look of turning, did so, and are now loved
and adored market leaders. They have established bases at the lows, the
FAANG and large cap tech have done so off their last rallies, both can rally
and thus continue the overall market rally.
Early this week we will see how sticky is the money that entered the market
Friday. Does it build on the Friday breakouts and do the new areas that are
setting up make breakouts or do the great moves upside reverse indicating
money is using the upside to exit? It will be one or the other, whether it
takes a day or several days to show the verdict.
NEWS/ECONOMY
Q3 GDP, 1st: 3.0% versus 2.8% expected versus 3.1% Q2.
Not a boom, nothing really changed, but many took heart of back to back 3%
reads. Why? Well, after a weak end to 2016 and start of 2017, the economy
is back to 'trend,' though 'trend' the past 9 years has been well below the
3% historical trend.
Indeed, the prior 10 years were the first since the Great Depression to not
have a single year that averaged 3% GDP annual growth. If tax cuts should
perhaps get a relatively quick thumbs up, perhaps confidence could jump and
what looks to be a good quarter 4 gets to be a great quarter 4 and posts the
first 3% annual growth rate in over 10 years? Highly unlikely as Q4 would
need to grow at roughly 4.7%, but there is promise there.
What caused the expectations beat?
INVENTORIES: added 0.7% to GDP. That can be good, that can be bad. In an
upswing economy, rising inventories indicate producers and sellers building
inventories in anticipation of future sales. The holiday season is coming,
and this kind of inventory build shows anticipation of coming sales. That
is economically bullish.
CONSUMPTION: 2.4% versus 2.2% expected and 2.24% prior. Added 1.62 points
to GDP.
Harvey and Irma: Apparently they had NO impact, or they had an impact and
prevented GDP from being huge. I would think the Bureau of Economic
Statistics just muffed the storm impact.
TAKEAWAY: If tax reform is passed the economy gets interesting. If
healthcare reform is passed and gets the ACA monkey off small business'
back, the combination could be a real boom, not just the ultra large cap
company boom seen thus far.
Stock Buybacks: Down 15% through Q3 in 2017. Big market driver as we know.
Buyback authorizations: Corporate resolutions to buy back shares for the
company treasury are way up, they simply have not been implemented. If
companies start announcing buybacks then the rally has new fuel for DJ30 25K
by yearend.
Caveat: It is earnings season, companies are reporting some pretty solid
results (lots of top line beats again versus cost-cutting bottom line beats
the prior 8 years), but they are as of yet not announcing buybacks.
THE MARKET
Of course some huge moves with NASDAQ even outpacing SOX' gain. Yet,
breadth was paltry (1.7:1 NASDAQ, 1.6:1 NYSE) as a few big names led the
move. Staying power? We will see.
CHARTS
NASDAQ: Have to lead with NASDAQ as its components were exploding higher.
Boom, boom, boom, boom. NASDAQ gapped upside rallied through the prior
highs earlier in October, and surged, closing near the session high. Volume
rallied Wednesday to Friday as it tested the 20 day EMA then on the blast
higher Friday.
SOX: SOX worked through its personal problems and chop over the past two
weeks, all the while holding the 10 day EMA. Then Friday, boom, a gap and a
fill, then a race higher and closing at a new post-2000 high near the
session high.
SP400: After a quite volatile week, and indeed Friday, the midcaps surged
to a new high, closing at that high. Not out of the woods but a good move.
SP500: Very similar action to the midcaps, gapping upside, testing the 10
day EMA then rallying to a new high. Lots of volatility the past week but
held support and we will see if this breakout on good volume holds.
RUTX: After lots of volatility the past two weeks, RUTX fell below the 20
day EMA intraday Wednesday but recovered. Friday was the big move, breaking
upside for 3/4%. No new high but got the test and now breaking upside.
LEADERSHIP
China stocks: Struggling as money moves out. BABA earnings this week and
perhaps it can bring them back. BABA trying to hold the 50 day EMA. SINA
breaks the 50 day. BIDU dives lower on earnings. BZUN as well. HTHT
trying to hang on. Overall the sector is a lot weaker.
Biotech: An awful week. CELG gapping lower and lower. AMGN plunges to the
200 day SMA. BIIB breaks the 50 day MA's. IDRA plummets. IMMU, INFI still
solid enough. Overall, very volatile.
FAANG: Of course a big day with AMZN, GOOG leading the way. FB strong as
well, AAPL surging upside. NFLX was quiet but has earnings this week. FB
as well.
Software: MSFT earnings helped surge the market and that stock. Others
were solid as usual, e.g. DATA, NTNX, VMW, CRM.
Financial: A solid week with JPM at a new rally high, BAC ditto. GS testing
decently.
Semiconductors: A big group of course but some big names made big moves,
e.g. INTC, TXN while others held gains and continued higher, e.g. AMAT,
LRCX, ON, BRKS. AMD bombed but even XLNX that had reversed managed a very
nice comeback.
Machinery/Manufacturing: Strong week for CAT, CMI, EMR. HON, HOLI holding
up very well.
Retail: WMT, TGT, WSM all solid either rallying farther or testing a bit.
Others such as TLRD, SIG look as if they might be ready to turn the corner.
MARKET STATS
DJ30
Stats: +33.33 points (+0.14%) to close at 23434.19
Nasdaq
Stats: +144.49 points (+2.20%) to close at 6701.26
Volume: 2.41B (+13.68%)
Up Volume: 1.43B (+571.19M)
Down Volume: 946.7M (-263.3M)
A/D and Hi/Lo: Advancers led 1.7 to 1
Previous Session: Advancers led 1.04 to 1
New Highs: 197 (+65)
New Lows: 76 (+6)
S&P
Stats: +20.67 points (+0.81%) to close at 2581.07
NYSE Volume: 888.7M (+2.31%)
A/D and Hi/Lo: Advancers led 1.64 to 1
Previous Session: Advancers led 1.1 to 1
New Highs: 181 (-6)
New Lows: 79 (-4)
SENTIMENT INDICATORS
VIX: 9.80; -1.50
VXN: 14.30; -1.52
VXO: 8.27; -1.05
Put/Call Ratio (CBOE): 0.88; +0.01
Bulls and Bears: Third week over 60 for the bulls as they are banging at the
top of the sentiment range that has rallies in check. Look at the chart
below: every time the 60 level is hit and holds consistently there is a
selloff. Sentiment has spent a LOT of time in 2017 at 50 or above.
Bulls: 62.3 versus 60.0
Bears: 15.1 versus 15.2
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 62.3 versus 60.60
60.6 versus 60.4 versus 57.5 versus 54.3 versus 50.5 versus 47.1 versus 49.5
versus 49.5 versus 48.1 versus 50.5 versus 57.5 versus 60.0 versus 60.2
versus 57.8 versus 50.0 versus 52.5 versus 54.9 versus 51.5 versus 50.00
versus 55.8 versus 50.00 versus 51.9 versus 58.1 versus 58.7 versus 58.5
versus 54.7 versus 51.9 versus 56.3 versus 55.8 versus 49.5 versus 56.7
versus 53.4 versus 57.7 versus 63.1 versus 61.2 versus 61.8 versus 62.7
versus 61.8 versus 58.2 versus 60.6 versus 58.6 versus 60.2 versus 59.8
versus 59.8 versus 59.6 versus 58.8 versus 56.3 versus 55.6 versus 51.0
versus 42.9 versus 41.7 versus 47.1 versus 42.9 versus 46.1 versus 46.7
versus 45.2
Bears: 15.1 versus 15.2
15.2 versus 15.1 versus 17.0 versus 17.1 versus 19.0 versus 20.2 versus 19.1
versus 19.1 versus 18.3 versus 18.1 versus 17.0 versus 16.2 versus 16.5
versus 16.7 versus 18.6 versus 18.8 versus 18.6 versus 18.3 versus 19.2
versus 18.3 versus 17.1 versus 17.3 versus 17.9 versus 17.9 versus 18.3
versus 17.5 versus 18.3 versus 18.1 versus 17.3 versus 13.75 versus 17.3
versus 16.5 versus 17.5 versus 17.6 versus 16.7 versus 17.6 versus 17.5
versus 17.3 versus 18.3 versus 18.4 versus 19.6 versus 19.6 versus 19.2
versus 19.6 versus 22.3 versus 21.6 versus 23.5 versus 25.7 versus 24.3
versus 23.1 versus 23.8 versus 23.1 versus 22.8 versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.419% versus 2.456%. Bonds were hammered lower with TLT breaking
below the 200 day SMA. A bit of recovery Friday, but hitting the 200 day
SMA from below.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.456%
versus 2.435% versus 2.421% versus 2.366% versus 2.383% versus 2.318% versus
2.341% versus 2.30% versus 2.302% versus 2.275% versus 2.321% versus 2.345%
versus 2.345% versus 2.361% versus 2.348% versus 2.327% versus 2.326% versus
2.341% versus 2.339% versus 2.312% versus 2.307% versus 2.236% versus 2.222%
versus 2.253% versus 2.276% versus 2.273% versus 2.246% versus 2.234% versus
2.201% versus 2.186% versus 2.19% versus 2.167% versus 2.134% versus 2.042%
EUR/USD: 1.16091 versus 1.16330. Dollar rallied, euro dropped below the
September and October lows to close the week. Kind of a 3 month head and
shoulders formed on the euro.
Historical: 1.16330 versus 1.18163 versus 1.17570 versus 1.1759 versus
1.17798 versus 1.18476 versus 1.17995 versus 1.1771 versus 1.17932 versus
1.1823 versus 1.1834 versus 1.18662 versus 1.1813 versus 1.17460 versus
1.17352 versus 1.17100 versus 1.1754 versus 1.17676 versus 1.17315 versus
1.1812 versus 1.17817 versus 1.1746 versus 1.17852 versus 1.18540 versus
1.19476 versus 1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus
1.1918 versus 1.1874 versus 1.19706 versus 1.19551 versus 1.20379 versus
1.2025 versus 1.19258 versus 1.19143 versus 1.18621 versus 1.19131 versus
1.18938 versus 1.19731 versus 1.19678 versus 1.19212 versus 1.18 versus
1.17516 versus 1.1813 versus 1.17595 versus 1.17107 versus 1.17812 versus
1.17445 versus 1.17751 versus 1.18216 versus 1.17652 versus 1.17596 versus
1.17619 versus 1.17975 versus 1.1774 versus 1.18718 versus 1.18457 versus
1.18072 versus 1.18281 versus 1.18293 versus 1.1683 versus 1.17419 versus
1.1646 versus 1.1637 versus 1.16640 versus 1.16271 versus 1.15280 versus
1.15549 versus 1.14735
USD/JPY: 113.675 versus 114.071. Dollar moving up the 10 day EMA but up
one session, down the next.
Historical: 114.071 versus 113.607 versus 113.913 versus 113.31 versus
113.530 versus 112.561 versus 113.031 versus 112.21 versus 112.20 versus
111.852 versus 112.25 versus 112.413 versus 112.41 versus 112.700 versus
112.653 versus 112.818 versus 112.79 versus 112.667 versus 112.716 versus
112.442 versus 112.86 versus 112.289 versus 111.649 versus 1.12125 versus
111.995 versus 112.454 versus 111.559 versus 111.435 versus 110.846 versus
110.01 versus 110.62 versus 110.216 versus 109.434 versus 107.847 versus
108.444 versus 109.132 versus 108.747 versus 110.254 versus 110.049 versus
110.289 versus 109.652 versus 108.04 versus 109.160 versus 109.573 versus
109.195 versus 109.648 versus 109.173 versus 109.205 versus 109.333 versus
109.842 versus 110.6621 versus 109.927
Oil: 53.90, +1.26. Spent all week bumping up at the start of resistance at
the top of the range (52.50ish) then -- boom -- breaking higher Friday.
Key, key test of the February high at 54.90 - 55.00 ahead.
Gold: 1271.80, +2.20. Nice rally from late June to early September
followed by a September fade to the 200 day SMA and 61% Fibonacci
retracement. A bounce then a fade the past two weeks back to that same
level. This setup is typically a pretty darn solid upside setup that would
move gold higher. Why would gold move higher? North Korea? Interesting
incongruity.
MONDAY
The big story? The revival of the front shooter theory in the JFK
assassination after the release of -- almost -- all of the remaining
government documents.
Okay, perhaps that is not the biggest story but it has a lot of people
talking. Also the false flag operations of the CIA and FBI on US soil,
plans to assassinate Castro -- things we kind of knew were happening and
many claim are happening to this day in other areas. Surprise! Or not.
Or how about the first charges in the Russia probe to be released Monday?
Will Mueller be one of the ones charged? From the stories reported, the
whole group on both sides ought to be handcuffed on down to those conducting
the investigation.
No, the reaction to the mega cap Friday move is the first big story though
Personal Income and Spending to come out ahead of the Monday open.
The Friday move was on Friday and it was rather limited to some really big
stocks that announced earnings. Was enough momentum created to keep the
move going, to keep new money chasing the large caps AND continue into
stocks that look to be turning the corner for a new move higher? THAT is
the big question in our view.
If it continues there are stocks we like quite a bit to the upside, some
that have broken out of bases, some that are looking to turn the corner.
Some that are loved, some that are forgotten but are setting up that old
pattern where they consolidate a long downtrend then start turning the
corner. If money stays in the market and continues flowing their way, we
want to be ready to make the plays and move up with them as they turn the
corner and rally. Just as with biotechs, chips, China stocks, etc. as they
made their turns.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6701.26
Resistance:
More new highs
Support:
The 20 day EMA at 6578
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 50 day EMA at 6492
The 2016 trendline at 6418
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
The 200 day SMA at 6135
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
S&P 500: Closed at 2581.07
Resistance:
New highs again
Support:
The 20 day EMA at 2552
2525 is the upper channel line from the March 2009 uptrend channel
The 50 day EMA at 2520
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
The 200 day SMA at 2418
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 23,434.19
Resistance:
Support:
The 10 day EMA at 23,246
The 50 day EMA at 22,579
22,420 is the September high
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
The 200 day SMA at 21,338
21,169 is the March 2017 all-time high
Tech Rally Leaves Stocks With Yet Another Weekly Gain
27-Oct-17 16:30 ET
Dow +33.33 at 23434.19, Nasdaq +144.49 at 6701.25, S&P +20.67 at 2581.07
https://www.briefing.com/investor/markets/stock-market-update/2017/10/27/tech-rally-leaves-stocks-with-yet-another-weekly-gain.htm
[BRIEFING.COM] Facing its first weekly loss since the week ended September 8, the stock market rallied on Friday, underpinned by the latest batch of earnings, which featured impressive results from mega-cap names like Amazon (AMZN 1100.95, +128.52), Microsoft (MSFT 83.81, +5.05), and Alphabet (GOOG 1019.27, +46.71). The three companies finished at new record highs, as did the S&P 500 (+0.8%) and the tech-heavy Nasdaq (+2.2%). The Dow (+0.1%) also moved higher, but finished a ways behind its peers due to select underperformers.
Friday's advance carried the major indices into positive territory for the week. The Nasdaq was the top performer this week, adding 1.1%, while the Dow and the S&P 500 finished with weekly gains of 0.5% and 0.2%, respectively.
The S&P 500's technology sector easily finished Friday at the top of the sector standings, climbing 2.9%. Microsoft and Alphabet deserved much of the credit for the sector's advance, as they jumped 6.4% and 4.8%, respectively, after reporting better-than-expected earnings and revenues. However, Intel (INTC 44.40, +3.05) also contributed--climbing 7.4%--after beating both top and bottom line estimates and raising its guidance for the fiscal year, as did fellow mega caps Apple (AAPL 163.05, +5.64) and Facebook (FB 177.88, +7.25), which added 3.6% and 4.3%, respectively.
Apple was helped not only by the positive sentiment surrounding Microsoft's and Alphabet's earnings, but also by the company's announcement that its new iPhone X sold out in a matter of minutes amid "off the charts" demand. Both Apple and Facebook will report earnings in the middle of next week.
As for Amazon, the internet retail giant surged 13.2% on better-than-expected earnings and revenues, pinning the consumer discretionary sector (+1.6%) right behind technology at the top of the leaderboard. Outside of the technology and consumer discretionary spaces, which were obviously juiced by the aforementioned companies, no group finished with a gain of more than 0.6%.
The energy sector (+0.2%) benefited from an increase in the price of crude oil, which climbed 2.4% to $53.91/bbl, but was weighed down by Chevron (CVX 113.54, -4.90), which dropped 4.1% despite reporting above-consensus earnings and revenues. On a related note, Exxon Mobil (XOM 83.71, +0.24) ticked up 0.3% after beating bottom-line estimates.
Similar to Chevron, pharmaceutical giant Merck (MRK 58.24, -3.75) dropped 6.1%, hitting a fresh 2017 low, despite beating earnings estimates and raising its guidance for the fiscal year. However, the company did come up short on revenues. The health care sector (unch) finished comfortably behind the broader market.
The consumer staples sector (-0.9%) was the weakest group on Friday, with CVS Health (CVS 68.99, -4.32) leading the retreat. The pharmacy retailer declined 5.9% following unconfirmed Thursday reports that it has made an offer to acquire managed health care company Aetna (AET 173.12, -5.48) for more than $200 per share.
Outside of the equity market, U.S. Treasuries ended the week on a higher note, trimming some of their losses from earlier in the week. The Treasury market began the day in the red, but a Bloomberg report that President Trump is leaning towards appointing Fed Governor Jerome Powell as the next Fed Chair helped turn the tide. The yield on the benchmark 10-yr Treasury note slipped three basis points to 2.42%.
Elsewhere, Spain's Prime Minister Mariano Rajoy invoked emergency powers on Friday in an attempt to restore order after Catalonia's parliament declared independence from the Spanish central government. The Catalonia people voted for independence earlier this month.
Reviewing Friday's economic data, which included the advance third quarter GDP report and the final reading of the University of Michigan Consumer Sentiment Index for October:
Advance third quarter GDP pointed to an expansion of 3.0%, while the Briefing.com consensus expected a reading of 2.4%.
The headline surprise was driven by the change in private inventories, which contributed 0.7 percentage points. Real final sales, which exclude the change in private inventories, decelerated to 2.3% from 2.9% in the second quarter on some soft consumer spending activity.
Granted the hurricanes created some temporary growth headwinds, but when the layers are peeled back, the key takeaway is that U.S. economic activity is proceeding largely at the same ho-hum pace, evidenced by the prior 12-quarter average of 2.4% for real final sales.
The final reading of the University of Michigan Consumer Sentiment Index for October declined to 100.7 (Briefing.com consensus 101.0) from 101.1 in the preliminary reading.
Despite the dip, the index remains at its highest monthly level since the start of 2004 and it stands above 100.0 for only the second time since the end of the record 1990's expansion.
On Monday, investors will receive September Personal Income, Personal Spending, and core PCE Prices--all of which will be released at 8:30 ET.
Nasdaq Composite +24.5% YTD
Dow Jones Industrial Average +18.6% YTD
S&P 500 +15.3% YTD
Russell 2000 +11.1% YTD
Week In Review: Tech Earnings Provide Late Boost
Stocks began the week on a lower note as investors cashed in on last week's record highs, but reclaimed their losses on Friday, thanks to an impressive batch of technology earnings. The major indices finished the week in positive territory, with the Nasdaq, the Dow, and the S&P 500 adding 1.1%, 0.5%, and 0.2%, respectively. The S&P 500 and the Nasdaq settled Friday at new all-time highs.
The S&P 500's technology sector (+2.9%) kept the broader market afloat with little help from its peers, easily settling at the top of the sector standings. The group was underpinned by Microsoft (MSFT), Alphabet (GOOG), and Intel (INTC), which added between 4.8% and 7.4% on Friday after reporting better-than-expected earnings and revenues for the third quarter.
Amazon (AMZN) also surged on Friday, jumping 13.2%, after beating both top and bottom line estimates. The company's positive performance boosted the consumer discretionary sector, which finished the week with a gain of 1.1%.
On the downside, the health care sector (-2.1%) struggled this week, with biotechnology names leading the retreat. Celgene (CELG) showed particular weakness, ending the week lower by 19.1%, after missing revenue estimates for the third quarter and lowering its 2020 long-term financial targets on Thursday.
The consumer staples sector also lagged, moving lower by 1.5%. Within the group, CVS Health (CVS) plunged 9.8% following unconfirmed reports that the pharmacy retailer has made an offer to acquire managed health care company Aetna (AET) for more than $200 per share. Aetna shares ended the week higher by 7.6%.
On the data front, the advance GDP report showed that the U.S. economy increased at annual rate of 3.0% in the third quarter (Briefing.com consensus 2.4%), marking the second straight quarter the annualized rate has been 3.0% or higher. However, the headline number was inflated by a change in inventories, while real final sales decelerated to 2.3% from 2.9% in Q2.
In other words, the U.S. economy is proceeding largely at the same ho-hum pace.
Elsewhere, speculation as to who will become the next Fed Chair continued this week, and it appears increasingly likely that current Fed Chair Janet Yellen will be replaced by either Fed Governor Jerome Powell or Stanford University economist John Taylor. Bloomberg reported on Friday that President Trump is leaning toward Mr. Powell.
Following this week's events, the CME FedWatch Tool places the chances of a December rate hike at 99.9%, up from 93.1% last week.
Trimming Losses
26-Oct-17 16:30 ET
Dow +71.40 at 23400.86, Nasdaq -7.12 at 6556.76, S&P +3.25 at 2560.40
https://www.briefing.com/investor/markets/stock-market-update/2017/10/26/trimming-losses.htm
[BRIEFING.COM] The U.S. equity market claimed a modest victory on Thursday, trimming its loss for the week. Stocks trended sideways for much of the session, but slipped in the final stretch to leave the major indices near the bottom of their narrow trading ranges. The Dow and the S&P 500 added 0.3% and 0.1%, respectively, while the tech-heavy Nasdaq shed 0.1%. The S&P 500 will enter Friday's session with a week-to-date loss of 0.6%.
Investors received another largely positive batch of earnings overnight, with most companies topping expectations. Twitter (TWTR 20.31, +3.17) was one of the most notable post-earnings advancers, rallying 18.5%, after beating earnings estimates and announcing that it could post its first profit ever in the fourth quarter. Similarly, Buffalo Wild Wings (BWLD 120.95, +19.80) soared 19.6% after blowing past profit estimates and raising its earnings guidance for the fiscal year.
Materials showed particular strength on Thursday, sending the S&P 500's materials sector (+1.4%) to the top of the sector standings. Within the group, DowDuPont (DWDP 73.05, +1.96) was among the strongest components, adding 2.8%, after providing upbeat preliminary earnings figures ahead of next week's earnings release.
The heavily-weighted financial sector (+0.6%) also outperformed, helped by the House's vote to pass a budget for fiscal year 2018--the same budget that the Senate passed last week. The budget approval was seen as an important step in the GOP's tax overhaul effort as it allows Republicans to pass a tax reform bill under the reconciliation process, which requires only a simple majority in the Senate vs the typical 60-vote threshold.
While the broader market moved higher on Thursday, the S&P 500's health care sector (-1.0%) struggled from start to finish, keeping the benchmark index's gain in check. Within the group, Celgene (CELG 99.99, -19.57) plunged 16.4% after missing revenue estimates for the third quarter and lowering its 2020 long-term financial targets. The larger biotech industry moved in tandem with Celgene, sending the iShares Nasdaq Biotechnology ETF (IBB 313.98, -7.47) lower by 2.3%.
On a related note, pharmacy names like Walgreens Boot Alliance (WBA 67.11, -2.25) and CVS Health (CVS 73.31, -2.22) dropped 3.2% and 2.9%, respectively, after President Trump declared the nation's opioid crisis a national public health emergency. Reports that Amazon (AMZN 972.43, -0.48) has obtained pharmacy licenses across several states also weighed on retail pharmacy shares.
Also, manged health care giant Aetna (AET 178.60, +18.48) spiked 11.5% in the final minutes of Thursday's session following reports that CVS might be interested in the company.
Elsewhere, the European Central Bank decided to leave interest rates unchanged and announced that it expects to lower its monthly asset purchases to EUR 30 billion from EUR 60 billion in January, as expected. That pace of purchases is expected to continue until at least the end of September 2018.
The euro tumbled 1.4% against the U.S. Dollar to 1.1650 following the ECB's announcement, hitting its lowest level since late July.
In the bond market, U.S. Treasuries ended Thursday on a lower note, with shorter-dated issues showing relative weakness. The benchmark 10-yr yield climbed one basis point to 2.45%, while the 2-yr yield jumped three basis points to 1.63%. Yields move inversely to prices.
Reviewing Thursday's economic data, which included weekly Initial Claims, September Pending Home Sales, the Advance report for International Trade in Goods for September, and the Advance report for Wholesale Inventories for September:
The latest weekly initial jobless claims count totaled 233,000 while the Briefing.com consensus expected a reading of 235,000. Today's tally was above the revised prior week count of 223,000 (from 222,000). As for continuing claims, they declined to 1.893 million from the revised count of 1.896 million (from 1.888 million).
Claims taking procedures continued to be disrupted in Puerto Rico and the Virgin Islands, yet the underlying message in the initial claims data is that it is consistent with a tight labor market.
Pending Home Sales were unchanged in September (0.0%). Today's reading follows an revised 2.8% decrease in August (from -2.6%).
The Advance report for International Trade in Goods for September showed a deficit of $64.1 billion, up from a deficit of $63.3 billion in August.
The Advance report for Wholesale Inventories for September showed an increase of 0.3%. The prior month's reading was revised to +0.8% from +0.9%.
On Friday, investors will receive the advance third quarter GDP report (Briefing.com consensus 2.4%) and the final reading of the University of Michigan Consumer Sentiment Index for October (Briefing.com consensus 101.0). The two reports will cross the wires at 8:30 ET and 10:00 ET, respectively.
Nasdaq Composite +21.8% YTD
Dow Jones Industrial Average +18.4% YTD
S&P 500 +14.4% YTD
Russell 2000 +10.3% YTD
Wall Street Registers Second Loss of the Week
25-Oct-17 16:30 ET
Dow -112.30 at 23329.46, Nasdaq -34.54 at 6563.88, S&P -11.98 at 2557.15
https://www.briefing.com/investor/markets/stock-market-update/2017/10/25/wall-street-registers-second-loss-of-the-week.htm
[BRIEFING.COM] Stocks declined for the second time in three sessions on Wednesday, but an afternoon rally left the major indices a ways above their session lows. The Dow (-0.5%) and the Nasdaq (-0.5%) finished roughly in line with the S&P 500, which lost 0.5%. The benchmark index traded within a wide range, holding a loss between 0.1% and 1.0% throughout the session.
The S&P 500's telecom services sector led the retreat, finishing with a loss of 2.3%, after AT&T (T 33.49, -1.37) reported worse-than-expected earnings and revenues for the third quarter; AT&T shares lost 3.9%. Industrials also showed relative weakness, losing 1.0%. Within the group, Boeing (BA 258.42, -7.58) was among the weakest performers, shedding 2.9%, despite beating profit estimates.
As for the other sectors, most finished roughly in line with the broader market. The top-weighted technology space (-0.3%) outperformed slightly, thanks in part to Visa (V 109.49, +1.08), which added 1.0% on better-than-expected earnings and revenues. Alphabet (GOOGL 991.46, +2.97) also showed relative strength ahead of Thursday evening's earnings release.
However, the tech sector's semiconductor components struggled after Advanced Micro (AMD 12.33, -1.92) forecasted a decline in revenue for the fourth quarter. The PHLX Semiconductor Index dropped 1.3%, while AMD shares plunged 13.5%.
Chipotle Mexican Grill (CMG 277.01, -47.29) also dropped significantly on Wednesday, losing 14.6%, after posting a big miss on earnings and lowering its comparable sales guidance. However, the consumer discretionary sector (-0.4%) still beat the broader market, thanks in large part to Nike (NKE 54.94, +1.52), which jumped 2.9% after providing a solid five-year outlook at its investor day.
Dow component Coca-Cola (KO 46.05, -0.13) also reported earnings on Wednesday, beating both top and bottom line estimates, but slipped 0.3% nonetheless.
U.S. Treasuries ended on a lower note, sending yields higher across the curve; the benchmark 10-yr yield climbed four basis points to 2.44%. Speculation that Stanford University economist John Taylor, who is considered relatively hawkish, is likely to become the next Fed Chair helped fuel the sell off.
Reviewing Wednesday's batch of economic data, which included September New Home Sales, September Durable Orders, the August FHFA Housing Price Index, and the weekly MBA Mortgage Applications Index:
New Home Sales in September hit an annualized rate of 667,000, which is above the revised August rate of 561,000 (from 560,000), and higher than the Briefing.com consensus of 555,000.
The key takeaway from the report is that the sales increases were broad-based, underscoring the point that the rebound in new home sales, which are counted when a contract is signed, was not just a function of a rebound from the depressed activity in the South due to the hurricanes.
September durable goods orders rose 2.2%, which is more than the 1.3% increase expected by the Briefing.com consensus. The prior month's reading was revised to +2.0% (from +1.7%). Excluding transportation, durable orders increased 0.7% (Briefing.com consensus +0.5%) to follow the prior month's revised uptick of 0.7% (from +0.2%).
The key takeaway from the report is that it is hard data that corroborates the upbeat readings in the soft manufacturing surveys; moreover, it is going to lead to stronger Q3 GDP forecasts given the 0.7% increase in shipments of nondefense capital goods excluding aircraft, which followed an upwardly revised 1.2% increase (from +0.7%) for August.
The FHFA Housing Price Index rose 0.7% in August (Briefing.com consensus 0.4%), while the July reading was revised to 0.4% from 0.2%.
The weekly MBA Mortgage Applications Index decreased 4.6% to follow last week's 3.6% increase.
On Thursday, investors will receive just two economic reports--weekly Initial Claims (Briefing.com consensus 235K) and September Pending Home Sales. The two pieces of data will cross the wires at 8:30 ET and 10:00 ET, respectively.
Nasdaq Composite +21.9% YTD
Dow Jones Industrial Average +18.1% YTD
S&P 500 +14.2% YTD
Russell 2000 +10.1% YTD
Caterpillar, 3M Earnings Boost Dow to Record High
24-Oct-17 16:30 ET
Dow +167.80 at 23441.76, Nasdaq +11.60 at 6598.42, S&P +4.15 at 2569.13
https://www.briefing.com/investor/markets/stock-market-update/2017/10/24/caterpillar-3m-earnings-boost-dow-to-record-high.htm
[BRIEFING.COM] The stock market crept higher on Tuesday, notching its first win of the week, following a largely solid batch of third quarter earnings. Caterpillar (CAT 138.24, +6.56) and 3M (MMM 234.65, +13.10) pushed the Dow (+0.7%) to a new record high after reporting particularly strong Q3 results, while the S&P 500 (+0.2%) and the Nasdaq (+0.2%) finished with more modest gains.
Caterpillar and 3M both reported stronger-than-expected earnings and revenues on Tuesday morning and raised their guidance for fiscal year 2017. The two industrial giants climbed 5.0% and 5.9%, respectively, helping the S&P 500's industrial sector (+0.5%) settle near the top of the sector standings.
However, fellow industrial giant--and Dow component--United Technologies (UTX 119.74, -1.15) tumbled 1.0%, despite beating third quarter profit estimates.
The lightly-weighted materials sector (+0.6%) finished roughly in line with the industrial space, but the heavily-weighted financial sector (+0.7%) did even better, making the most of a curve-steepening trade in the bond market. Treasuries finished mixed, with the yield on the benchmark 10-yr Treasury note climbing three basis points to 2.41%, while the 2-yr yield slipped one basis point to 1.57%.
McDonald's (MCD 163.88, +0.54) advanced 0.3% on Tuesday, even though its third quarter earnings fell short of expectations. The opposite was true for health care giants Eli Lilly (LLY 85.17, -2.01) and Biogen (BIIB 315.73, -12.82), which tumbled 2.3% and 3.9%, respectively, despite reporting stronger-than-expected earnings and revenues.
The health care sector (-0.7%) finished at the bottom of the sector standings, alongside other countercyclical groups like consumer staples (-0.3%) and telecom services (-0.6%). In general, cyclical sectors outperformed their countercyclical peers on Tuesday, signaling an increased appetite for risk among investors.
In Washington, Senator Jeff Flake (R-AZ) announced that he will not run for re-election in 2018. Mr. Flake has been a critic of President Trump and will be a Senator to watch as he now seemingly has fewer political consequences if he decides to vote against Republican legislation. The GOP holds just a two-seat majority in the Senate.
Investors did not receive any economic data on Tuesday.
However, on Wednesday, market participants will receive several economic reports, including the weekly MBA Mortgage Applications Index at 7:00 ET, September Durable Orders (Briefing.com consensus 1.3%) at 8:30 ET, the August FHFA Housing Price Index (Briefing.com consensus 0.4%) at 9:00 ET, and September New Home Sales (Briefing.com consensus 555K) at 10:00 ET.
Nasdaq Composite +22.6% YTD
Dow Jones Industrial Average +18.6% YTD
S&P 500 +14.8% YTD
Russell 2000 +10.6% YTD
Winning Streak Comes to an End
23-Oct-17 16:30 ET
Dow -54.67 at 23273.96, Nasdaq -42.23 at 6586.82, S&P -10.23 at 2564.98
https://www.briefing.com/investor/markets/stock-market-update/2017/10/23/winning-streak-comes-to-an-end.htm
[BRIEFING.COM] Stocks moved lower on Monday, ending a week-long stretch of record finishes. The major indices kept near their flat lines throughout the morning, but tumbled to new lows in the afternoon. The S&P 500 lost 0.4%, while the Nasdaq and the Russell 2000 underperformed, losing 0.6% and 0.8%, respectively. The Dow finished ahead of its peers, but still lost 0.2%.
Earnings season took somewhat of a breather on Monday, but will pick back up Tuesday morning with releases from McDonald's (MCD 163.34, -2.96), 3M (MMM 221.55, +0.23), Caterpillar (CAT 131.68, +0.32), and United Technologies (UTX 120.89, -0.04)--in addition to many other heavyweights.
Still, there were several notable post-earnings movers on Monday, including V.F. Corp (VFC 69.95, +3.57), Seagate Tech (STX 39.35, +4.41), and Hasbro (HAS 89.75, -8.44).
V.F. Corp--which owns apparel brands like Wrangler and The North Face--and disk-drive maker Seagate Tech soared 5.4% and 12.6%, respectively, after reporting better-than-expected earnings and revenues. Conversely, toymaker Hasbro plunged 8.6% after issuing disappointing sales guidance for the holiday season, which overshadowed the company's above-consensus earnings.
Outside of earnings, industrial giant General Electric (GE 22.32, -1.51) dropped 6.3% after both Morgan Stanley and UBS downgraded GE shares on the heels of Friday's underwhelming earnings report. The S&P 500's industrial sector declined by 0.8%, settling alongside the consumer discretionary (-0.7%) and telecom services (-1.0%) groups at the bottom of the sector standings.
Within the consumer discretionary space, Under Armour (UAA 16.85, -0.63) exhibited particular weakness, losing 3.6%, after the Wall Street Journal reported that co-founder Kip Fulks is taking a sabbatical and that the sportswear manufacturer is considering exiting small sports categories such as tennis and fishing.
On a positive note, the heavily-weighted financial sector (-0.1%) held up relatively well, finishing near the top of the day's leaderboard. The countercyclical consumer staples (-0.1%) and utilities (+0.1%) sectors also put together a relatively positive showing. Following Monday's slim victory, the utilities space leads all other groups for the month of October with a month-to-date gain of 3.5%.
Elsewhere, European equities ticked higher on Monday, evidenced by the Euro Stoxx 50 index, which added 0.1%. However, Spain's IBEX (-0.8%) underperformed after Prime Minster Mariano Rajoy invoked Article 155 of Spain's constitution, which allows the central government to take control of the Catalonia region following its vote in favor of independence.
In Asia, Japan's Nikkei rose 1.1% on Monday, marking its 15th consecutive advance--and longest-ever winning streak--after the LDP/Komeito coalition kept its super majority following a national election over the weekend. As a result, Prime Minister Shinzo Abe will likely serve another three-year term.
There wasn't much movement in the U.S. Treasury market on Monday, with the benchmark 10-yr yield finishing unchanged at 2.38%. Shorter-dated issues showed relative weakness, sending the 2-yr yield one basis point higher to 1.58%. Meanwhile, the U.S. Dollar Index jumped 0.2% to 93.75.
Investors did not receive any economic data on Monday, and Tuesday's economic calendar is also blank.
Nasdaq Composite +22.4% YTD
Dow Jones Industrial Average +17.8% YTD
S&P 500 +14.6% YTD
Russell 2000 +10.3% YTD
Another Record Finish Following Senate Vote
20-Oct-17 16:30 ET
Dow +165.59 at 23328.63, Nasdaq +23.99 at 6629.05, S&P +13.11 at 2575.21
https://www.briefing.com/investor/markets/stock-market-update/2017/10/20/another-record-finish-following-senate-vote.htm
[BRIEFING.COM] U.S. equities advanced to new record highs once again on Friday after the Senate passed a budget blueprint for 2018, which was seen as an important step for an eventual tax overhaul. The Dow (+0.7%) led Friday's advance, closing at a record high for the fifth session in a row. The S&P 500 (+0.5%) also notched its fifth straight record close, while the Nasdaq (+0.4%) registered its third record finish of the week.
The major indices opened with gains of around 0.3% apiece and slowly extended those gains into the afternoon, eventually settling near their session highs.
Financial stocks were particularly bullish following the Senate vote, with heavyweights like Goldman Sachs (GS 244.73, +4.74), Wells Fargo (WFC 54.92, +1.17), and Bank of America (BAC 27.17, +0.59) adding at least 2.0% apiece. The S&P 500's financial sector finished at the top of the day's sector standings with a gain of 1.2%.
The risk-on tone was present outside the equity market as well, sending safe-haven assets into negative territory. U.S. Treasuries moved lower in a curve-steepening trade--which added an additional boost to lenders. The benchmark 10-yr yield jumped six basis points to 2.38%, while the 2-yr yield climbed one basis point to 1.57%.
Higher yields increased the demand for the U.S. dollar, sending the U.S. Dollar Index higher by 0.6% to 93.57. The greenback showed particular strength against the Japanese yen--which is considered a safe-haven asset--climbing 0.8% to 113.50. On a related note, gold declined by 0.8% to $1,280.30/ozt.
Industrial heavyweight General Electric (GE 23.83, +0.25) faced heavy selling at the opening bell after missing earnings estimates and issuing disappointing earnings guidance for fiscal year 2017. However, after opening with a loss of around 8.0%, the company bounced back to end the day with a gain of 1.1%. The industrial sector (+1.1%) finished right behind financials at the top of the leaderboard.
Meanwhile, the top-weighted technology sector also had a solid showing, adding 0.7%. PayPal (PYPL 70.97, +3.72) was the group's strongest component after reporting better-than-expected earnings and revenues and issuing upbeat revenue guidance for the fourth quarter. PYPL shares finished higher by 5.5%.
On the flip side, the consumer staples sector struggled, finishing with a loss of 0.2%. Within the group, Procter & Gamble (PG 88.25, -3.34) showed particular weakness, despite reporting above-consensus earnings. P&G shares dropped 3.7%. The only other sector to finish in negative territory was real estate (-0.1%).
After passing the budget blueprint, the next step for the Senate will be to reconcile its version of the budget with the version that the House passed earlier this month. This could be a challenge as the two budget resolutions conflict on the deficit; the House version is deficit-neutral while the Senate's calls for a $1.5 trillion increase in the deficit over a decade.
However, if the two sides can come to an agreement, Republicans will have the ability to pass tax reform without any support from the Democrats under the reconciliation process--which requires only a simple majority in the Senate versus the typical 60-vote threshold.
Reviewing Friday's economic data, which included September Existing Homes Sales and the Treasury Budget for September:
Existing home sales for September increased 0.7% from August to an annualized rate of 5.39 million units while the Briefing.com consensus expected a reading of 5.29 million. The prior month's reading was left unrevised at 5.35 million.
The key takeaway from the report is that notable supply constraints remain, which will continue to act as a drag on overall sales due to the limited inventory and the high prices on available inventory that is crimping affordability.
The Treasury Budget for September showed a surplus of $8.0 billion versus a surplus of $33.4 billion for September 2016.
Investors will not receive any economic data on Monday.
Nasdaq Composite +23.2% YTD
Dow Jones Industrial Average +18.0% YTD
S&P 500 +15.0% YTD
Russell 2000 +11.2% YTD
Week In Review: October Rally Continues
The stock market advanced once again this week, notching a new record high in all five sessions, as investors digested another batch of third quarter earnings. The S&P 500 finished higher by 0.9%, while the Dow (+2.0%) did noticeably better and the Nasdaq (+0.4%) did modestly worse. For the month, the S&P 500 has added 2.2%.
Equities had their best performance on Friday after the Senate voted in favor of a budget blueprint for 2018--a crucial step for an eventual tax overhaul. If the upper chamber can reconcile its version of the budget with the version the House passed earlier this month, Republicans will have the ability to pass tax reform without any support from the Democrats under the reconciliation process.
The S&P 500's financial sector (+2.0%) was in focus for much of the week thanks to heavyweights like Goldman Sachs (GS) and Morgan Stanley (MS), both of which reported third quarter results on Tuesday morning. Goldman Sachs initially sold off following its release, but bounced back later in the week to finish higher by 2.6%. Morgan Stanley did even better, climbing 4.9%.
Health care stocks also rallied this week, with Dow components UnitedHealth (UNH) and Johnson & Johnson (JNJ) pacing the advance. The two companies ended the week higher by 7.8% and 4.4%, respectively, after reporting better-than-expected earnings on Tuesday. The health care sector added 1.8%, finishing right behind financials at the top of the leaderboard.
Technology giant IBM (IBM) had a strong week, surging 10.2%, after reporting better-than-expected profits and sales on Tuesday afternoon. The company's positive performance helped the top-weighted technology sector climb 1.0% and helped the price-weighted Dow Jones Industrial Average finish comfortably above the other major indices.
Telecom stocks within the S&P 500 finished slightly ahead of the broader market. Wireless giant Verizon (VZ) was a positive influence, climbing 3.5%, as investors rallied around its above-consensus earnings. The telecom services sector added 1.1% this week, but the advance did little to change the group's overwhelmingly bearish October trend; telecoms have dropped 4.7% month-to-date.
The consumer staples sector finished at the very bottom of the sector standings with a loss of 1.2%. Procter & Gamble (PG) and Philip Morris (PM) were among the most notable laggards within the group. P&G slipped 5.2% despite reporting above-consensus earnings, while Philip Morris lost 3.9% after missing both top and bottom line estimates and issuing disappointing guidance.
Speculation surrounding President Trump's Fed Chair nomination heated up this week. Current Fed Chair Janet Yellen could be appointed for another four-year term, but reports indicate that Fed Governor Jerome Powell and Stanford University economist John Taylor are the two leading candidates. Fed Governor Kevin Warsh and chief economic advisor Gary Cohn are also still in the mix.
Following this week's events, the CME FedWatch Tool places the chances of a December rate hike at 93.1%, up from 82.9% last week.
Another Buzzer Beater on Wall Street
19-Oct-17 16:30 ET
Dow +5.44 at 23163.04, Nasdaq -19.15 at 6605.06, S&P +0.84 at 2562.10
https://www.briefing.com/investor/markets/stock-market-update/2017/10/19/another-buzzer-beater-on-wall-street.htm
[BRIEFING.COM] Stocks clawed their way back from early weakness on Thursday and managed to reach positive territory for the fifth session in a row. The S&P 500 (unch) and the Dow (unch) both posted new record closes thanks to a final push higher in the final minutes of the session. Meanwhile, the Nasdaq and the Russell 2000 underperformed, losing 0.3% and 0.2%, respectively.
The S&P 500's technology sector declined by 0.4% on Thursday, with its largest component by market cap--Apple (AAPL 155.98, -3.78)--showing particular weakness. The company fell 2.4% following overnight reports that iPhone 8 orders are weaker than expected and the new Apple Watch is having cellular connection issues in China.
eBay (EBAY 37.29, -0.68) was another notable laggard within the tech space after the e-commerce company issued weak guidance for the fourth quarter; EBAY shares lost 1.8%. On a positive note, software giant Adobe Systems (ADBE 171.73, +18.73) surged 12.2%, hitting a fresh record high, after issuing above-consensus guidance for fiscal year 2018.
The consumer staples space (-0.6%) was the only sector to finish below technology on the day's leaderboard. Phillip Morris (PM 108.15, -4.36), the maker of cigarette brand Marlboro, was the sector's weakest component, tumbling 3.9%, after reporting disappointing profits and revenues for the third quarter and issuing below-consensus earnings guidance for fiscal year 2017.
Meanwhile, health care stocks rallied, extending their gains from the prior two sessions. Within the health care sector--which added 0.6%--Gilead Sciences (GILD 81.59, +1.58) showed particular strength (+2.0%) after the FDA approved the company's lymphoma therapy drug Yescarta.
Wireless giant Verizon (VZ 49.21, +0.56) finished with a gain of 1.2% after reporting upbeat earnings for the third quarter. However, the company's performance was somewhat disappointing considering it opened with a gain of around 3.0%. The lightly-weighted telecom services group added 0.5%.
Financial names finished mixed, leaving the S&P 500's financial sector (+0.2%) slightly higher. American Express (AXP 91.90, -0.18) and Travelers (TRV 133.17, +3.15) embodied the mixed theme; TRV shares climbed 2.4% on better-than-expected top and bottom lines while AXP shares lost 0.2% after announcing that CEO Kenneth Chenault will be stepping down after 16 years at the helm.
Transports finished slightly behind the broader market, evidenced by the Dow Jones Transportation Average (-0.1%), with United Continental (UAL 59.78, -8.21) pacing the modest retreat. The airline plunged 12.1% after disappointing guidance overshadowed its better-than-expected earnings.
In the bond market, U.S. Treasuries advanced on Thursday, but intraday selling pressured the market off its morning high. The benchmark 10-yr yield slipped two basis points to 2.32% after trading as high as 2.35% in overnight action. Meanwhile, the U.S. Dollar Index dropped 0.3% to 93.02.
Also of note, Politico reported in the late afternoon that Fed Governor Jerome Powell is the leading candidate to become the next Fed Chair. President Trump is expected to make his decision before he leaves for an 11-day trip to Asia on November 3.
Reviewing Thursday's economic data, which included the weekly Initial Claims Report, the Philadelphia Fed Index for October, and the Conference Board Leading Economic Index for September:
The latest weekly initial jobless claims count totaled 222,000 while the Briefing.com consensus expected a reading of 236,000. Today's tally was below the revised prior week count of 244,000 (from 243,000). As for continuing claims, they declined to 1.888 million from the revised count of 1.904 million (from 1.889 million).
The key takeaway from this report, which saw some disruptions in claims taking procedures in Puerto Rico and the Virgin Islands, is that the low level of claims should translate into some lofty nonfarm payroll expectations for October since this report covered the week in which the household survey was conducted.
The Philadelphia Fed Survey for October rose to 27.9 from an unrevised 23.8 in September while economists polled by Briefing.com had expected a reading of 20.0.
The key takeaway from the report is that the monthly increase was led by gains in labor market indicators, with the current employment index increasing 24 points to a record-high reading of 30.6.
The Conference Board Leading Economic Index decreased 0.2% in September, while economists polled by Briefing.com expected an increase of 0.1%. The prior month's increase was left unrevised at 0.4%.
The key takeaway from the report is that the downturn had hurricane fingerprints on it with key negative contributions from initial claims, building permits, and the average workweek.
On Friday, investors will receive just one economic report--September Existing Homes Sales (Briefing.com consensus 5.29 million)--which will be released at 10:00 ET.
Nasdaq Composite +22.7% YTD
Dow Jones Industrial Average +17.2% YTD
S&P 500 +14.4% YTD
Russell 2000 +10.7% YTD
Another Buzzer Beater on Wall Street
19-Oct-17 16:30 ET
Dow +5.44 at 23163.04, Nasdaq -19.15 at 6605.06, S&P +0.84 at 2562.10
https://www.briefing.com/investor/markets/stock-market-update/2017/10/19/another-buzzer-beater-on-wall-street.htm
[BRIEFING.COM] Stocks clawed their way back from early weakness on Thursday and managed to reach positive territory for the fifth session in a row. The S&P 500 (unch) and the Dow (unch) both posted new record closes thanks to a final push higher in the final minutes of the session. Meanwhile, the Nasdaq and the Russell 2000 underperformed, losing 0.3% and 0.2%, respectively.
The S&P 500's technology sector declined by 0.4% on Thursday, with its largest component by market cap--Apple (AAPL 155.98, -3.78)--showing particular weakness. The company fell 2.4% following overnight reports that iPhone 8 orders are weaker than expected and the new Apple Watch is having cellular connection issues in China.
eBay (EBAY 37.29, -0.68) was another notable laggard within the tech space after the e-commerce company issued weak guidance for the fourth quarter; EBAY shares lost 1.8%. On a positive note, software giant Adobe Systems (ADBE 171.73, +18.73) surged 12.2%, hitting a fresh record high, after issuing above-consensus guidance for fiscal year 2018.
The consumer staples space (-0.6%) was the only sector to finish below technology on the day's leaderboard. Phillip Morris (PM 108.15, -4.36), the maker of cigarette brand Marlboro, was the sector's weakest component, tumbling 3.9%, after reporting disappointing profits and revenues for the third quarter and issuing below-consensus earnings guidance for fiscal year 2017.
Meanwhile, health care stocks rallied, extending their gains from the prior two sessions. Within the health care sector--which added 0.6%--Gilead Sciences (GILD 81.59, +1.58) showed particular strength (+2.0%) after the FDA approved the company's lymphoma therapy drug Yescarta.
Wireless giant Verizon (VZ 49.21, +0.56) finished with a gain of 1.2% after reporting upbeat earnings for the third quarter. However, the company's performance was somewhat disappointing considering it opened with a gain of around 3.0%. The lightly-weighted telecom services group added 0.5%.
Financial names finished mixed, leaving the S&P 500's financial sector (+0.2%) slightly higher. American Express (AXP 91.90, -0.18) and Travelers (TRV 133.17, +3.15) embodied the mixed theme; TRV shares climbed 2.4% on better-than-expected top and bottom lines while AXP shares lost 0.2% after announcing that CEO Kenneth Chenault will be stepping down after 16 years at the helm.
Transports finished slightly behind the broader market, evidenced by the Dow Jones Transportation Average (-0.1%), with United Continental (UAL 59.78, -8.21) pacing the modest retreat. The airline plunged 12.1% after disappointing guidance overshadowed its better-than-expected earnings.
In the bond market, U.S. Treasuries advanced on Thursday, but intraday selling pressured the market off its morning high. The benchmark 10-yr yield slipped two basis points to 2.32% after trading as high as 2.35% in overnight action. Meanwhile, the U.S. Dollar Index dropped 0.3% to 93.02.
Also of note, Politico reported in the late afternoon that Fed Governor Jerome Powell is the leading candidate to become the next Fed Chair. President Trump is expected to make his decision before he leaves for an 11-day trip to Asia on November 3.
Reviewing Thursday's economic data, which included the weekly Initial Claims Report, the Philadelphia Fed Index for October, and the Conference Board Leading Economic Index for September:
The latest weekly initial jobless claims count totaled 222,000 while the Briefing.com consensus expected a reading of 236,000. Today's tally was below the revised prior week count of 244,000 (from 243,000). As for continuing claims, they declined to 1.888 million from the revised count of 1.904 million (from 1.889 million).
The key takeaway from this report, which saw some disruptions in claims taking procedures in Puerto Rico and the Virgin Islands, is that the low level of claims should translate into some lofty nonfarm payroll expectations for October since this report covered the week in which the household survey was conducted.
The Philadelphia Fed Survey for October rose to 27.9 from an unrevised 23.8 in September while economists polled by Briefing.com had expected a reading of 20.0.
The key takeaway from the report is that the monthly increase was led by gains in labor market indicators, with the current employment index increasing 24 points to a record-high reading of 30.6.
The Conference Board Leading Economic Index decreased 0.2% in September, while economists polled by Briefing.com expected an increase of 0.1%. The prior month's increase was left unrevised at 0.4%.
The key takeaway from the report is that the downturn had hurricane fingerprints on it with key negative contributions from initial claims, building permits, and the average workweek.
On Friday, investors will receive just one economic report--September Existing Homes Sales (Briefing.com consensus 5.29 million)--which will be released at 10:00 ET.
Nasdaq Composite +22.7% YTD
Dow Jones Industrial Average +17.2% YTD
S&P 500 +14.4% YTD
Russell 2000 +10.7% YTD
Financial and Technology Stocks Power Another Record Finish
18-Oct-17 16:30 ET
Dow +160.16 at 23157.60, Nasdaq +0.56 at 6624.21, S&P +1.90 at 2561.26
https://www.briefing.com/investor/markets/stock-market-update/2017/10/18/financial-and-technology-stocks-power-another-record-finish.htm
[BRIEFING.COM] The stock market notched another record high on Wednesday, with financial and technology stocks pacing the advance. The Dow added 0.7% and finished comfortably ahead of both the S&P 500 (+0.1%) and the Nasdaq (unch), thanks in large part to IBM (IBM 159.53, +12.99), which climbed 8.9% in reaction to its better-than-expected earnings report. The small-cap Russell 2000 (+0.5%) showed relative strength, but, unlike the other indices, it did not finish at a new record high.
Trading ranges were narrow on Wednesday, with the S&P 500 sporting a gain between 0.01% and 0.19% from start to finish.
Goldman Sachs (GS 242.03, +5.94) retraced just about all of its Tuesday decline in the midweek session, surging higher by 2.5% and helping the S&P 500's financial sector (+0.6%) finish at the top of the sector standings. As a reminder, Goldman reported above-consensus earnings and revenues on Tuesday morning, but plunged to a fresh October low nonetheless. Morgan Stanley (MS 50.15, +1.03) also had a belated earnings rally, jumping 2.1%.
The top-weighted technology sector (+0.3%) started Wednesday's session little changed, but strengthened over the course of the day, eventually settling near the top of the leaderboard. Within the group, IBM was by far the top performer after exceeding profit and sales expectations. However, the sector's top component by market cap--Apple (AAPL 159.76, -0.71)--held gains in check, losing 0.4%.
Only two other sectors finished in positive territory--health care (+0.2%) and industrials (+0.1%). Transports helped the industrial space, evidenced by the 0.8% increase in the Dow Jones Transportation Average, while health care leaned on names like AbbVie (ABBV 96.04, +3.87) and Anthem (ANTM 191.79, +4.53), which added 4.2% and 2.4%, respectively. Anthem announced that it plans to partner with CVS Health (CVS 74.10, +1.47) to launch its own pharmacy benefit manager after its current contract with Express Scripts (ESRX 57.77, +0.56) ends in 2020.
On the flip side, the telecom services (-0.6%) and energy (-0.7%) sectors fell amid broad weakness, finishing at the very bottom of the sector standings. Within the energy group, Chevron (CVX 118.15, -2.07) exhibited particular weakness after both Societe Generale and BMO Capital Markets downgraded the Dow component on Wednesday morning. CVX shares lost 1.7%.
WTI crude futures climbed 0.3% to $52.04 per barrel after the Energy Information Administration reported that U.S. crude stockpiles declined by 5.7 million barrels last week; the consensus estimate called for a draw of 3.3 million barrels. However, gasoline inventories increased by 0.9 million barrels, possibly signaling a downtick in demand.
U.S. Treasuries ended the midweek session on a lower note with longer-dated issues pacing the decline. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, climbed four basis points to 2.34%. Meanwhile, the 2-yr yield jumped two basis points to 1.56%.
Reviewing Wednesday's economic data, which included September Housing Starts, the Fed's Beige Book for October, and the weekly MBA Mortgage Applications Index:
Housing starts decreased to a seasonally adjusted annualized rate of 1.127 million units in September (Briefing.com consensus 1.160 million), down from a revised 1.183 million units in August (from 1.180 million). Building permits decreased to a seasonally adjusted 1.215 million in September (Briefing.com consensus 1.225 million) from a revised 1.272 million in August (from 1.300 million).
The key takeaway from the report is that the weakness in starts and permits was concentrated in the South region, which suffered the biggest hit from the hurricanes, so one could reasonably assume that the October report will show better results.
The Fed's Beige Book for October showed that economic activity increased at a modest to moderate pace in all 12 of the Federal Reserve Districts in September through early October. The Richmond, Atlanta, and Dallas Districts reported major disruptions related to Hurricanes Harvey and Irma. Many Districts noted that employers were having difficulty finding qualified workers, but the shortage in labor had little effect on wages.
The weekly MBA Mortgage Applications Index increased 3.6% to follow last week's 2.1% decline.
On Thursday, investors will receive both the weekly Initial Claims Report (Briefing.com consensus 236K) and the Philadelphia Fed Index for October (Briefing.com consensus 20) at 8:30 ET. The third and last economic report--the Conference Board Leading Economic Index for September (Briefing.com consensus 0.1%)--will be released at 10:00 ET.
As for earnings, Verizon (VZ 48.65, +0.25), Philip Morris (PM 112.51, -0.14), and Travelers (TRV 130.02, +1.37) are scheduled to report on Thursday morning.
Nasdaq Composite +23.1% YTD
Dow Jones Industrial Average +17.2% YTD
S&P 500 +14.4% YTD
Russell 2000 +10.9% YTD
Health Care Rally Fuels Another Slim Victory
17-Oct-17 16:30 ET
Dow +40.48 at 22997.44, Nasdaq -0.35 at 6623.65, S&P +1.72 at 2559.36
https://www.briefing.com/investor/markets/stock-market-update/2017/10/17/health-care-rally-fuels-another-slim-victory-.htm
[BRIEFING.COM] Stocks ticked higher for the third session in a row on Tuesday as investors digested another round of earnings. The Dow (+0.2%) traded above the 23,000 mark for the first time in history and eventually settled at a new all-time high. The S&P 500 (+0.1%) also eked out a new record close, while the Nasdaq (unch) came up just short, finishing a tick beneath its unchanged mark.
Health care stocks rallied on Tuesday, led by Dow component UnitedHealth (UNH 203.89, +10.69), which surged 5.5% after reporting better-than-expected earnings and raising its earnings guidance slightly. The advance marked the company's largest one-day price gain since it went public 33 years ago and left UNH shares at a new all-time high.
UnitedHealth is one of the priciest--and therefore one of the most influential--components within the price-weighted Dow and had much to do with the industrial average's relatively positive Tuesday performance. Fellow health care heavyweight and Dow component Johnson & Johnson (JNJ 140.79, +4.67) also underpinned the blue-chip average, adding 3.4% on above-consensus earnings and revenues.
Naturally, the S&P 500's health care sector (+1.3%) finished at the top of the day's sector standings, followed from a distance by the utilities (+0.6%), telecom services (+0.2%), and energy (+0.1%) groups. Most of the seven remaining sectors finished in negative territory, but losses were pretty modest. For instance, the financial sector was the weakest group with a loss of 0.6%.
Financial heavyweights Goldman Sachs (GS 236.09, -6.32) and Morgan Stanley (MS 49.12, +0.18) delivered impressive earnings reports on Tuesday, with both companies surpassing top and bottom line estimates, but Goldman dropped 2.6% nonetheless. Morgan Stanley added more than 2.0% in the opening minutes, but eventually trimmed that gain to 0.4% by the closing bell.
Meanwhile, Netflix (NFLX 199.48, -3.20) retreated from record highs after reporting below-consensus earnings on Monday evening. However, the on-demand entertainment provider did add nearly a million more subscribers than expected in the third quarter. NFLX shares ended Tuesday lower by 1.6%.
U.S. Treasuries settled mostly higher on Tuesday, with longer-dated issues exhibiting relative strength. The yield on the benchmark 10-yr Treasury note dropped one basis point to 2.30% while the 2-yr yield finished unchanged at 1.54%. Meanwhile, the U.S. Dollar Index climbed 0.4% to 93.37--closing at a one-week high.
Reviewing Tuesday's batch of economic data, which included September Industrial Production and Capacity Utilization, September Import/Export Prices, and the October NAHB Housing Market Index:
Industrial Production increased 0.3% in September (Briefing.com consensus +0.2%), while the August reading was revised to -0.7% (from -0.9%). Capacity Utilization rose to 76.0% (Briefing.com consensus 76.1%) from a revised reading of 75.8% in August (from 76.1%).
The key takeaway from the report is that total production in September was held down by the continued effects of Hurricane Harvey and, to a lesser extent, the effects of Hurricane Irma, which combined lowered industrial production growth by 1/4 percentage point.
Import prices excluding oil rose 0.3% in September after increasing 0.3% in August. Export prices excluding agriculture increased 1.0% in September after rising a revised 0.8% in August (from 0.7%).
The key takeaway is that these price trends will validate the prevailing belief that the Federal Reserve is likely to raise the fed funds rate at its December meeting.
The NAHB Housing Market Index for October rose to 68 (Briefing.com consensus 64) from an unrevised reading of 64 in September.
On Wednesday, investors will receive just two pieces of economic data--the weekly MBA Mortgage Applications Index and September Housing Starts (Briefing.com consensus 1160K). The two reports will cross the wires at 7:00 ET and 8:30 ET, respectively.
As for earnings, Abbott Labs (ABT 55.06, +0.43) and U.S. Bancorp (USB 53.88, -0.38) are the most notable names on Wednesday morning's docket.
Nasdaq Composite +23.0% YTD
Dow Jones Industrial Average +16.4% YTD
S&P 500 +14.3% YTD
Russell 2000 +10.3% YTD
Kicking Off the Week on a Positive Note
16-Oct-17 16:30 ET
Dow +85.24 at 22956.96, Nasdaq +18.20 at 6624.00, S&P +4.47 at 2557.64
https://www.briefing.com/investor/markets/stock-market-update/2017/10/16/kicking-off-the-week-on-a-positive-note.htm
[BRIEFING.COM] The U.S. equity market started the week on a positive note as all three major indices--the S&P 500 (+0.2%), the Nasdaq (+0.3%), and the Dow (+0.4%)--finished Monday's session at new record highs. Half way through the month of October, the S&P 500 holds a month-to-date gain of 1.5%.
Financial stocks within the S&P 500 climbed 0.6% on Monday, bouncing back from last Thursday's modest post-earnings decline. JPMorgan Chase (JPM 97.84, +1.98) and Bank of America (BAC 26.24, +0.41) were among the strongest financial components, climbing 2.1% and 1.6%, respectively, followed closely by Goldman Sachs (GS 242.41, +3.88), which will report earnings on Tuesday morning.
Telecoms also retraced a portion of last week's losses in the first session of the week--albeit a relatively small portion. The S&P 500's lightest sector by weight added 0.8% on Monday, but that advance barely dented the group's October loss, which currently sits at 5.0%. AT&T (T 36.17, +0.47) had a good session, climbing 1.3%.
On the flip side, the influential health care sector started the week on the back foot, dropping 0.4%. The group opened in positive territory, but eventually slid into the red after President Trump reiterated his belief that drug prices are "out of control." Allergan (AGN 198.41, -7.11) showed particular weakness, losing 3.5%, after a U.S. judge invalidated patents on the company's dry-eye medication Restasis.
Like health care, transportation stocks also tumbled, sending the Dow Jones Transportation Average lower by 0.8%. Railroad giant CSX (CSX 52.84, +0.01) finished flat, however, ahead of its Tuesday morning earnings release. The S&P 500's industrial sector, which houses transports, added 0.2%.
Retailers underperformed on Monday, evidenced by the 0.7% decline in the SPDR S&P Retail ETF (XRT 39.73, -0.27). High-end department store retailer Nordstrom (JWN 40.40, -2.25) was hit particularly hard after the Nordstrom family announced that it is suspending efforts to take the company private until after the holiday season. JWN shares lost 5.3%.
West Texas Intermediate crude futures rose 0.8% to $51.86 per barrel amid a conflict between Iraqi and Kurdish forces in the oil-rich city of Kirkuk. Afternoon reports indicated that the Iraqi army has taken full control of the city. The energy sector, which typically moves in tandem with the price of crude oil, finished higher by 0.2%.
U.S. Treasuries were weak from the start of the session and extended their losses in the afternoon after Bloomberg reported President Trump was impressed with John Taylor's interview for the potential Fed Chair vacancy. Mr. Taylor is an economist at Stanford University and is thought to be more hawkish than some of the other candidates in the running.
The yield on the benchmark 10-yr Treasury note climbed three basis points to 2.31% while the 2-year yield jumped four basis points to 1.54%.
Reviewing Monday's economic data, which was limited to the October Empire State Manufacturing Survey:
The Empire Manufacturing Survey for October rose to 30.2 from the prior month's reading of 24.4. The Briefing.com consensus estimate was pegged at 21.0.
On Tuesday, investors will receive several economic reports, including September Import/Export Prices at 8:30 ET, September Industrial Production (Briefing.com consensus 0.2%) and Capacity Utilization (Briefing.com consensus 76.1%) at 9:15 ET, and the October NAHB Housing Market Index (Briefing.com consensus 64) at 10:00 ET.
Also, a host of notable companies in addition to Goldman Sachs and CSX will report their quarterly results on Tuesday morning, including UnitedHealth (UNH 192.20, +0.68), Johnson & Johnson (JNJ 136.12, -0.31), and Morgan Stanley (MS 48.94, +0.64), among several others.
Nasdaq Composite +23.1% YTD
Dow Jones Industrial Average +16.2% YTD
S&P 500 +14.2% YTD
Russell 2000 +10.7% YTD
InvestmentHouse - Earnings Season Just Getting Started (Weekend Newsletter)
http://www.investmenthouse.com/frblog.php
- SOX posts a solid week while the large caps trend slightly higher, small
and midcaps finish up their tests.
- Bank earnings disappoint for the most part, but don't take the financials
out of the upside picture.
- Fed inflation 'mystery' even as inflation is all around it. The solution:
tax reform, healthcare reform to get true growth and stop distorting our
labor and investment markets, not to mention killing the middle class.
- Leaders still look very good and there are plenty of stocks set up to move
higher.
- Earnings season just getting started, still looks to be time to continue
higher.
The week was one that saw SOX post some nice gains but for the rest of the
market it was mostly a series of modest gains and even more modest losses
that kept the trends higher. Some days started softer, some started upside,
but none could really yield strong gains. In the end, the trends held but
the momentum in the large cap indices definitely slowed.
SP500 2.24, 0.09%
NASDAQ 14.29, 0.22%
DJ30 30.71, 0.13%
SP400 -0.05%
RUTX -0.17%
SOX -0.67%
Many leaders, however, continued showing excellent strength as smaller
biotechs and drugs were still great, software was strong again, some retail
posted great gains, chemicals started to rally. Banks started reporting
earnings, and while the stock action was not necessarily great, they left
themselves in position to return to the upside.
Thus, while the overall momentum of the move is slowing, there is still
plenty of leadership that is moving and that continues to set up to continue
moving. Last week we discussed how stocks rallying into earnings often
continue the move during the initial phase if the results are good. The
results were not all that great from the banks, but the stock indices still
held the trends with modest net gains.
Perhaps some good earnings this week can result in some renewed upside from
the rest of the market. Even then, you still have to view this as a market
that has rallied nicely and has lost some momentum -- at least for the large
cap indices. RUTX has put in a nice 2 week test of the 10 day EMA while
SP400 midcaps moved laterally in a tight range. They are set to continue
the move from the look of their consolidation, and that makes sense: they
led the last leg higher, started to test, and the large cap indices started
upside.
Now they are rested after the large caps made their move. Perhaps time for
some rotation back to the smaller caps while the large caps take a breather.
They certainly have some very nice play setups to aide in an upside move.
NEWS/ECONOMY
The news on the week saw mostly mixed data. Actual data was not so great
while sentiment data was again strong.
It also saw the Fed confused by the 'mystery' of low inflation. Well, here
is even more of a mystery: inflation is NOT low. As discussed earlier in
the week, inflation is showing up everywhere except in price increases.
There is 'hidden' inflation everywhere, most predominant in the portions,
amounts, reduced materials, etc. We have known for years that producers and
sellers felt they could not raise prices for fear of losing market share.
So, they kept prices more or less in line while 'raising' them by the other
means cited.
It seems incomprehensible that the Federal Reserve, stacked with ivory tower
economists, would not know this. But of COURSE they do. It is a fiction.
They know they have to get rates higher, and even if 'prices' remain low via
what is charged, they are going to hike.
I really don't have a problem with that; there is inflation in other areas
as discussed. The problem is, there needs to be tax reform to get the
economy really producing and moving versus the subterfuge of pricing. The
ACA needs to be removed to eliminate the strangulation of small businesses,
the distortion of our labor market into millions more sub-29 hour per week
hourly jobs, and to actually get healthcare back to where you can get a good
policy at a decent price.
I cannot understand the fight to preserve a system that has quadrupled and
more premium prices and done the same with deductibles. The statistic of
'coverage' is a red herring: you can be covered because you are forced to
buy a policy, but then have no money left over to go to the doctor and pay
your deductible. Yes there are subsidies for the poorest, but none of the
middle class, or more rightly put, the former middle class, can qualify for
subsidies.
So, you have coverage on paper but in reality these people are basically
uninsured. It reminds me of an old joke: a boy asks his father for help on
his homework. "what is the difference between in theory and in reality?"
the son asks. The father says, "go ask your mother if she would sleep with
a man for a million dollars" and come back and tell me what she said. The
son does, and his mother says "well, it would be wrong, but we could pay off
the house, pay for you kids' college, and have a retirement. If there were
no strings attached, yes I would." The son reports her answer and the
father says "now go ask your sister the same question." The sister responds
"yes I would" without hesitation or any of the other conditions the mother
placed on the deal. The son reports her answer to the father. The father
says "So, here is the difference: in theory we have $2 million; in reality
we live with two concubines."
THE MARKET
CHARTS
SOX: Market leader last week, breaking to a series of new post-2000 highs,
indeed 10 of the last 11 sessions. Solid gains Monday, Tuesday, Wednesday,
and Friday. Okay, good moves and now up three weeks straight in a 45 degree
rise above the 10 day EMA. Perhaps a bit overbought near term as in this
series of rallies SOX typically rallies approximately 3 weeks before needing
a test.
RUTX: Excellent 2 week test back near the 10 day EMA after that mid-August
to early October surge. Amazing move, excellent test. Small caps could be
ready to move back upside next as the large cap indices take a breather.
SP400: The midcaps don't have the textbook test of the 10 day EMA a la
RUTX, but they also have rested, refusing to give up any ground in its 6
session tight lateral test. The 10 day EMA is now just below the
consolidation, and that often continues the move higher.
DJ30: Nice steady trend higher on the week with upside days and minor
downside. Climbing the 10 day EMA with good volume. Now up 5 weeks on this
move and that is extended for the Dow in these rallies. It is getting help
from the DJ20 transports as they broke to a new high Thursday. Gave it up
Friday, but right there.
SP500: Slight trend higher on the week as well, the 10 day EMA catching up
with the move. SP500 broke higher to start September, moving off the 50 day
MA, then tested in a lateral move through late September. Then a new break
higher and rally that took it through the 2007 upper trendline. Nice move,
now testing again. Not necessarily that overextended.
NASDAQ: Similar to SP500, NASDAQ came off the 50 day MA in late September
versus early that month, and it rallied into the prior Friday. Last week it
continued trending higher just over the 10 day EMA though at a much slower
pace. Trying to consolidate while holding the gains. Not sure it can, but
not as extended as DJ30.
Leadership
Software: Not as great a day Friday, but Thursday saw some good moves
upside from GLUU, CRM, VMW, MSFT and others. Looking at COUP as a new play
this week.
Biotechs/Drugs: Some great moves from INFI, IDRA, CNIT, BIIB. Decent
action from others, e.g. ARRY. Not all were great, e.g. BLRX, CNAT, but
there are some great setups we are looking at this weekend.
Semiconductors: A decent to very good week. AMD, AMAT, LRCX, ON, BRKS
showing very solid action. SMTC, SIMO, ADI, SLAB -- all solid. Lots of
strength.
China stocks: Mixed but started upside late week. They run hot and cold --
guess you call that volatile. SOHU exploded higher Friday and we banked
some strong gain. YY trended higher then broke higher Friday. BZUN finally
started upside again Friday. BIDU solid. CTRP looking decent but needs
more volume. BABA is testing the 20 day EMA on stronger volume. WUBA is
interesting.
Retail: Some great moves, e.g. TGT working well for us, WMT the cream of
the class. KORS trying to break out from a consolidation. HD in a nice 10
day EMA test. Not all are great: COST languishing after gapping lower.
JWN, M, DDS down. WSM gapped lower on results but is posting a nice
rebound.
FAANG: Decent just not inspired -- in most cases. FB up to the early
September top of its 3 month lateral range. AMZN breaking higher late week;
we will see if we can get in early week on a test. AAPL still below the 50
day MA. NFLX tested the 10 day EMA, trying to break higher again ahead of
earnings. GOOG posted a great week for us, rallying up the 10 day EMA.
Miscellaneous: Chemicals were great, e.g. CF, AGU. SQ continues a strong
move. NAK surged off the 200 day SMA.
MARKET STATS
DJ30
Stats: +30.71 points (+0.13%) to close at 22871.72
Nasdaq
Stats: +14.29 points (+0.22%) to close at 6605.80
Volume: 1.76B (-12.44%)
Up Volume: 888.95M (-32.3M)
Down Volume: 831M (-219M)
A/D and Hi/Lo: Decliners led 1.08 to 1
Previous Session: Decliners led 1.38 to 1
New Highs: 237 (+14)
New Lows: 47 (+6)
S&P
Stats: +2.24 points (+0.09%) to close at 2553.17
NYSE Volume: 768M (-2.51%)
A/D and Hi/Lo: Advancers led 1.46 to 1
Previous Session: Advancers led 1.11 to 1
New Highs: 264 (+42)
New Lows: 30 (-2)
SENTIMENT INDICATORS
VIX: 9.61; -0.30
VXN: 13.97; -0.36
VXO: 7.57; -0.48
Put/Call Ratio (CBOE): 0.85; -0.20
Bulls and Bears: Whoa, a big spike in bulls continues, moving over the 60
level with bears dropping like a rock. Getting very bullish, indeed too
bullish.
Bulls: 60.4 versus 57.5
Bears: 15.1 versus 17.0
Theory: When everyone is bullish and has put all their capital to work,
where does the ammunition to drive the market come from? There is always
new money to start a new year. After that is used will more money be
coming? That is the question.
Bulls: 60.4 versus 57.5
57.5 versus 54.3 versus 50.5 versus 47.1 versus 49.5 versus 49.5 versus 48.1
versus 50.5 versus 57.5 versus 60.0 versus 60.2 versus 57.8 versus 50.0
versus 52.5 versus 54.9 versus 51.5 versus 50.00 versus 55.8 versus 50.00
versus 51.9 versus 58.1 versus 58.7 versus 58.5 versus 54.7 versus 51.9
versus 56.3 versus 55.8 versus 49.5 versus 56.7 versus 53.4 versus 57.7
versus 63.1 versus 61.2 versus 61.8 versus 62.7 versus 61.8 versus 58.2
versus 60.6 versus 58.6 versus 60.2 versus 59.8 versus 59.8 versus 59.6
versus 58.8 versus 56.3 versus 55.6 versus 51.0 versus 42.9 versus 41.7
versus 47.1 versus 42.9 versus 46.1 versus 46.7 versus 45.2
Bears: 15.1 versus 17.0
17.0 versus 17.1 versus 19.0 versus 20.2 versus 19.1 versus 19.1 versus 18.3
versus 18.1 versus 17.0 versus 16.2 versus 16.5 versus 16.7 versus 18.6
versus 18.8 versus 18.6 versus 18.3 versus 19.2 versus 18.3 versus 17.1
versus 17.3 versus 17.9 versus 17.9 versus 18.3 versus 17.5 versus 18.3
versus 18.1 versus 17.3 versus 13.75 versus 17.3 versus 16.5 versus 17.5
versus 17.6 versus 16.7 versus 17.6 versus 17.5 versus 17.3 versus 18.3
versus 18.4 versus 19.6 versus 19.6 versus 19.2 versus 19.6 versus 22.3
versus 21.6 versus 23.5 versus 25.7 versus 24.3 versus 23.1 versus 23.8
versus 23.1 versus 22.8 versus 23.1 versus 24.3
OTHER MARKETS
Bonds: 2.275% versus 2.321%. Bonds rallied all week on the economic data
and the belief the Fed may not be able to hike as it wants. TLT tested the
200 day SMA the prior week and rallied right back up to the 50 day MA as of
Friday.
Historical: the last sub-2% rate was in November 2016 (1.867%). 2.321%
versus 2.345% versus 2.345% versus 2.361% versus 2.348% versus 2.327% versus
2.326% versus 2.341% versus 2.339% versus 2.312% versus 2.307% versus 2.236%
versus 2.222% versus 2.253% versus 2.276% versus 2.273% versus 2.246% versus
2.234% versus 2.201% versus 2.186% versus 2.19% versus 2.167% versus 2.134%
versus 2.042% versus 2.105% versus 2.072% versus 2.166% versus 2.210% versus
2.136% versus 2.129% versus 2.175% versus 2.169% versus 2.189% versus 2.217%
versus 2.183% versus 2.197% versus 2.185%
EUR/USD: 1.1823 versus 1.1834. Euro recovered back to test the 50 day MA
after breaching it the last week of September.
Historical: 1.1834 versus 1.18662 versus 1.1813 versus 1.17460 versus
1.17352 versus 1.17100 versus 1.1754 versus 1.17676 versus 1.17315 versus
1.1812 versus 1.17817 versus 1.1746 versus 1.17852 versus 1.18540 versus
1.19476 versus 1.19420 versus 1.19420 versus 1.19954 versus 1.19436 versus
1.1918 versus 1.1874 versus 1.19706 versus 1.19551 versus 1.20379 versus
1.2025 versus 1.19258 versus 1.19143 versus 1.18621 versus 1.19131 versus
1.18938 versus 1.19731 versus 1.19678 versus 1.19212 versus 1.18 versus
1.17516 versus 1.1813 versus 1.17595 versus 1.17107 versus 1.17812 versus
1.17445 versus 1.17751 versus 1.18216 versus 1.17652 versus 1.17596 versus
1.17619 versus 1.17975 versus 1.1774 versus 1.18718 versus 1.18457 versus
1.18072 versus 1.18281 versus 1.18293 versus 1.1683 versus 1.17419 versus
1.1646 versus 1.1637 versus 1.16640 versus 1.16271 versus 1.15280 versus
1.15549 versus 1.14735
USD/JPY: 111.852 versus 112.25. Dollar faded toward the 200 day SMA all
week as the data suggests the Fed might not be so tough as it says it will
be.
Historical: 112.25 versus 112.413 versus 112.41 versus 112.700 versus
112.653 versus 112.818 versus 112.79 versus 112.667 versus 112.716 versus
112.442 versus 112.86 versus 112.289 versus 111.649 versus 1.12125 versus
111.995 versus 112.454 versus 111.559 versus 111.435 versus 110.846 versus
110.01 versus 110.62 versus 110.216 versus 109.434 versus 107.847 versus
108.444 versus 109.132 versus 108.747 versus 110.254 versus 110.049 versus
110.289 versus 109.652 versus 108.04 versus 109.160 versus 109.573 versus
109.195 versus 109.648 versus 109.173 versus 109.205 versus 109.333 versus
109.842 versus 110.6621 versus 109.927 versus 109.183 versus 109.177 versus
110.03 versus 109.09 versus 110.09 versus 110.757 versus 110.689 versus
109.963 versus 110.717 versus 110.368 versus 110.28 versus 110.704 versus
111.07 versus 111.166 versus 111.897 versus 111.176
Oil: 51.45, +0.85. Oil held the 200 day SMA test and rebounded Tuesday and
again Friday. Still looks as if this higher low could break it out of its
range.
Gold: 1304.60, +8.10. Gold rallied on the week and then broke back up
through the 50 day MA on Friday. It too doubts the Fed.
MONDAY
Earnings are taking over the headlines as the banks started the show and now
the floodgates open. The initial response was not great as the banks
faded -- for the most part. The question is whether the market has room for
more upside on some good earnings after the gains in DJ30, SOX and to a
lesser extent, NASDAQ and SP500.
As noted before the real question is whether RUTX and SP400, after their
tests, are ready to take up leadership again and move back upside, getting
money pushed their way, as the large cap indices take a break after their
move up that started as RUTX and SP400 started to take a breather.
We think that could be the case. There are plenty of setups in the group,
and they could provide another good leg higher over the next couple of weeks
even if the market decides to cap out the move at that point. That is what
I discussed last week: the continued rally at the first weeks of earnings
that then stalls. With the patterns we see there are still very good setups
to play that move and still make money before a stall.
Thus, we still believe the move could top out once the earnings saturation
comes, typically 2 or so weeks in once the big names start announcing, but
there are also great setups to play during that time as well as letting
positions work and banking gain as it comes. We did a lot of that last
week, particularly with the October expiration coming up this week.
Therefore, we intend to play good moves upside because there are so many
good stocks making good moves and in prime position to continue or start a
move. Yes, as noted last week some can get left at the altar when the move
runs out of steam, but the scenario we are playing allows for some more
upside before that occurs.
Have a great weekend!
SUPPORT AND RESISTANCE
NASDAQ: Closed at 6605.80
Resistance:
More new highs
Support:
6477 is the September intraday high
6461 is the July 2017 prior all-time high
6450 is the early September high
The 50 day EMA at 6433
The 2016 trendline at 6366
6341.70 is the all-time high from early June.
6300 is the mid-June interim high
6205 is the late May all-time high
The 200 day SMA at 6079
5996 is the recent May 2017 low
5937 is the all-time high from April
5915 is the tops of the March to April 2017 range
5910 is the lower gap point from mid-April
5800 from the February consolidation lows
5661 is the late January upper gap point
5601 is the January lower gap point
S&P 500: Closed at 2553.17
Resistance:
New highs again
Support:
2519 is the upper channel line from the March 2009 uptrend channel
The 50 day EMA at 2498
2491 is the August all-time high
2480 the late August and early August highs
2453.46 is the June prior all-time closing high
2409 is the July 2017 closing low
2406 is the all-time high from May 2017
The 200 day SMA at 2403
2401 is the March 2017 all-time high
2352 is the recent May 2017 low
2348 is the April 2017 lower gap point
2329 is the March and April twin lows
2322 is the March 2017 low
2301 is the late January 2017 high
2298 is the late January 2017 high
2282 - 2280 from January 2017
2277.53 is the December 2016 high
The November 2016 all-time high at 2213.25
2194 is the August 2016 prior all-time high
2175 is the June 2016 high
Dow: Closed at 22,871.72
Resistance:
Support:
The 10 day EMA at 22,740
22,420 is the September high
The 50 day EMA at 22,241
22,179 is the August 2017 all-time high
22,086 is the mid-August lower high
21,681is the July prior all-time high
21,638 is the July 2017 closing high
21,529 is the June 2017 high
The 200 day SMA at 21,170
21,169 is the March 2017 all-time high
20,547 is the lower gap point from late April 2017
20,412 is the March 2017 low
20,400 is the mid-April 2017 low.
20,126 is the January 2017 intraday high
20,101 is the late January closing high.
19,994 - 19,999 (early January high, upper gap point from late January
19750 is the lows of the December/January range
19,732 is the January 2017 low
18,669 is the August 2016 all-time high
18,595 is the July 2016 peak
18,351 is the prior all-time high from May 2015
Ending on a Positive Note
13-Oct-17 16:30 ET
Dow +30.71 at 22871.72, Nasdaq +14.29 at 6605.80, S&P +2.24 at 2553.17
https://www.briefing.com/investor/markets/stock-market-update/2017/10/13/ending-on-a-positive-note.htm
[BRIEFING.COM] Stocks finished near the bottom of their narrow trading ranges on Friday, but still managed to eke out a narrow victory. The Nasdaq (+0.2%) finished at a new record high while S&P 500 (+0.1%) and the Dow (+0.1%) settled just a tick below their record marks. Small caps underperformed, sending the Russell 2000 lower by 0.2%. For the week, the S&P 500 added 0.2%.
Financials dominated the earnings front again on Friday after kicking off the third quarter earnings season in the prior session. Bank of America (BAC 25.83, +0.38) surpassed earnings expectations, but Wells Fargo (WFC 53.69, -1.52) disappointed, missing both top and bottom line estimates. As a result, BAC shares climbed 1.5% while WFC shares dropped 2.8%.
The S&P 500's financial sector opened the session with a sizable loss of around 0.9%, but quickly bounced back. In the end, the sector finished little changed.
Investors received several pieces of influential economic data on Friday, including the core Consumer Price Index, which increased less-than-expected in September (+0.1% actual vs +0.2% Briefing.com consensus). The core CPI differs from the total CPI in that it excludes the volatile categories of food and energy.
The cooler-than-expected reading sent Treasury yields into the red; the benchmark 10-yr yield dropped four basis points to 2.28%. However, it didn't have much effect on the market's rate-hike expectations. At the closing bell, the CME FedWatch Tool placed the chances of a December rate hike at 82.9%, virtually unchanged from 82.7% on Thursday.
In total, five of the S&P 500's eleven sectors finished Friday with gains. The technology group (+0.5%) was among the top performers, benefiting from broad strength. HP (HPQ 21.71, +1.31) showed particular resolve, jumping 6.4% to its best mark in over seven years, after raising its guidance for fiscal year 2018 on Thursday evening.
The materials sector (+0.5%) also outperformed, thanks in part to steel and iron ore companies, which rallied after China's monthly imports of iron ore hit an all-time high in September. Reports that President Trump may be fighting for rules in NAFTA that would require automakers to use North American steel also helped fuel buying interest.
On the flip side, industrial stocks slipped, especially transportation names, which sent the Dow Jones Transportation Average lower by 1.0%. JB Hunt Transport (JBHT 104.01, -4.34) was the DJTA's weakest performer, dropping 4.0%, after reporting worse-than-expected earnings.
The health care sector (-0.3%) also lagged, with health insurers like Anthem (ANTM 183.83, -5.91) and Humana (HUM 237.73, -3.71) showing particular weakness following the White House's decision to end the Affordable Care Act's cost-sharing reduction payments. The two companies finished with losses of 3.1% and 1.5%, respectively.
President Trump announced that he will not be certifying the Iran nuclear deal, essentially kicking the deal to Congress, which will have 60 days to decide whether to impose sanctions on Iran that were lifted under the agreement. If Congress does nothing, Mr. Trump vowed to end the accord.
Reviewing Friday's big batch of economic data, which included the Consumer Price Index for September, Retail Sales for September, the preliminary October reading for the University of Michigan Consumer Sentiment Index, and Business Inventories for August:
Total CPI increased 0.5% (Briefing.com consensus 0.6%) in September while core CPI, which excludes food and energy, rose 0.1% (Briefing.com consensus 0.2%).
The headline numbers were a little softer than expected, which will create some chatter that they could sway the Fed into thinking that it would be prudent to hold off on a rate hike at its December meeting. The key takeaway from our vantage point, though, is that the September CPI report hasn't run afoul of the Fed's price stability mandate. To that end, total CPI is up 2.2% year-over-year, versus 1.9% in August, and core CPI is up 1.7% for the fifth month in a row.
September retail sales increased 1.6% (Briefing.com consensus +1.5%). The prior month's reading was revised to -0.1% from -0.2%. Excluding autos, retail sales increased 1.0% while the Briefing.com consensus expected an increase of 0.8%. The prior month's reading was revised to +0.5% from +0.2%.
The key takeaway from the report is that core retail sales, which exclude auto, gas, building material, and food services and drinking place sales, and which factor into GDP computations, increased a solid 0.6%.
The preliminary reading of the University of Michigan Consumer Sentiment Index for October rose to 101.1 (Briefing.com consensus 95.6) from 95.1 in September.
The key takeaway from the report is that the positive sentiment occurred among all age and income groups and across all partisan viewpoints. That should presumably bode well for consumer spending, which is the most important driver of GDP growth.
Business Inventories rose 0.7% in August, which is in line with the Briefing.com consensus. The July reading was revised to 0.3% from 0.2%.
The key takeaway from the report is that the inventory build will be a positive component for Q3 GDP forecasts.
On Monday, investors will receive just one piece of economic data--the October Empire State Manufacturing Survey (Briefing.com consensus 21). The report will be released at 8:30 ET.
Nasdaq Composite +22.7% YTD
Dow Jones Industrial Average +15.7% YTD
S&P 500 +14.0% YTD
Russell 2000 +10.7% YTD
Week In Review: Stocks Tick Up As Earnings Season Gets Under Way
The stock market moved modestly higher this week, touching new record highs yet again. The Dow led the advance, adding 0.4%, while the Nasdaq and the S&P 500 each settled with gains of 0.2% apiece. The small-cap Russell 2000 struggled, however, ending the week with a loss of 0.5%.
Financials kicked off the third quarter earnings season on a mostly higher note; JPMorgan Chase (JPM), Citigroup (C), and Bank of America (BAC) all reported better-than-expected earnings. However, Wells Fargo (WFC) missed both top and bottom line estimates. Despite the largely positive showing, the S&P 500's financial sector moved lower, dropping 0.9%.
The retreat wasn't all that surprising as the financial sector did ride a four-week rally into earnings season--climbing 10.6% from September 7 to October 6--and, therefore, was likely overdue for a pull back. A decline in Treasury yields also worked against the sector, which typically benefits from an increase in interest rates. The benchmark 10-yr yield dropped eight basis points to 2.28%.
Softer-than-expected consumer prices had a hand in pushing Treasury yields lower, but did little to dial back the market's rate-hike expectations. The Consumer Price Index increased less than expected in September (0.5% actual vs 0.6% Briefing.com consensus), as did the core Consumer Price Index, which excludes food and energy (0.1% actual vs 0.2% Briefing.com consensus).
The minutes from the September FOMC meeting were also released this week, but contained little to no new information. In short, the minutes showed that the Fed favors staying on a path of gradual rate hikes, although there was growing concern that the factors keeping a lid on inflation may not be transitory after all.
Following this week's events, the CME FedWatch Tool places the chances of a December rate hike at 82.9%, down modestly from 93.1% last week.
Industrial heavyweight General Electric (GE) had a rough showing this week, dropping 5.8%, after announcing that several of its top executives will be leaving the company. JPMorgan lowered its target price for the company to $20 from $22, which weighed on GE shares as well.
AT&T (T) was another notable laggard this week after announcing that its video subscribers declined for the third quarter in a row; the wireless giant finished with a loss of 7.5%.
On a positive note, the world's largest retailer--Wal-Mart (WMT)--jumped 9.7% this week after announcing a new return service that will allow its customers to return items they purchased online or in the store in under 30 seconds. Wal-Mart's brick-and-mortar locations potentially give the company an advantage over internet-based names like Amazon (AMZN) in the area of returns.
Wal-Mart's positive performance helped the S&P 500's consumer staples sector (+1.5%) settle alongside the technology (+1.3%), utilities (+1.3%), and real estate (+1.8%) groups at the top of the sector standings. On the flip side, the telecom services sector was by far the weakest performer--thanks mostly to AT&T--finishing with a loss of 4.6%.
Stocks Slip at the Start of Earnings Season
12-Oct-17 16:30 ET
Dow -31.88 at 22841.01, Nasdaq -12.04 at 6591.51, S&P -4.31 at 2550.93
https://www.briefing.com/investor/markets/stock-market-update/2017/10/12/stocks-slip-at-the-start-of-earnings-season.htm
[BRIEFING.COM] Stocks slipped from record highs on Thursday amid a heap of corporate news and the start of the third quarter earnings season. The S&P 500 and the Nasdaq lost 0.2% apiece while the Dow Jones Industrial Average (-0.1%) held up slightly better. Equities spent some time in positive territory, but eventually settled near their session lows.
Financial heavyweights JPMorgan Chase (JPM 95.99, -0.85) and Citigroup (C 72.37, -2.57) kicked off the third quarter earnings season on Thursday morning. Both lenders reported better-than-expected earnings and revenues, but moved lower nonetheless, tumbling 0.9% and 3.4%, respectfully. Other financials followed suit, sending the S&P 500's financial sector lower by 0.7%.
The financial group will be in focus once again on Friday morning, as that's when Bank of America (BAC 25.45, -0.38) and Wells Fargo (WFC 55.21, -0.45) are scheduled to report their quarterly results.
Like financials, consumer discretionary stocks within the S&P 500 struggled on Thursday, losing 0.7%. Cosmetic retailer Ulta Beauty (ULTA 190.16, -17.73) showed particular weakness, settling the day lower by 8.5%, after Cleveland Research downgraded ULTA shares to 'Neutral' from 'Buy' in pre-market action.
Women's apparel retailer J.Jill (JILL 4.86, -5.07) was hit even harder, plunging 51.1%, after lowering its forecast for third quarter same-store sales.
Unsurprisingly, the SPDR S&P Retail ETF (XRT 39.88, -0.53) tumbled 1.3%, finishing below its 50-day simple moving average (40.13) for the first time in over a month. Retailers will be in the spotlight once again on Friday morning, which is when investors will get their hands on the Retail Sales Report for September (Briefing.com consensus +1.5%).
AT&T (T 35.86,-2.33) led the lightly-weighted telecom services group (-3.5%) to the bottom of the sector standings on Thursday, dropping 6.1% in reaction to an announcement that its video subscribers declined for the third quarter in a row. Fellow wireless giant Verizon (VZ 48.35, -0.51) also dropped, losing 1.0%.
On a positive note, transports had a good showing, sending the Dow Jones Transportation Average higher by 0.6%. Railroad names like CSX (CSX 53.58, +0.50) showed particular strength after JPMorgan raised the company's target price to $62 from $58. CSX shares finished higher by 0.9%.
The top-weighted technology sector (unch) spent much of the day in positive territory, but slipped in the final stretch as mega-caps like Alphabet (GOOG 987.83, -1.42), Facebook (FB 172.55, -0.19), and Apple (AAPL 156.00, -0.55) retraced their earlier gains. Microsoft (MSFT 77.12, +0.70) held strong though, adding 0.9%.
In Washington, President Trump signed an executive order related to health care on Thursday that's aimed at providing more options for consumers and stepping up competition within the space. The health care sector (-0.2%) finished roughly in line with the broader market.
WTI crude futures declined 1.3% to $50.61 per barrel, despite the EIA reporting a larger-than-expected draw in U.S. crude stockpiles for the week ended October 6 (2.8 million barrels actual vs 2.4 million barrels consensus). The energy sector, which typically moves in tandem with oil prices, lost 0.4%.
In IPO news, CarGurus (CARG 27.58, +11.58)--which hosts an online marketplace for new and used vehicles--opened for trading today at a price of $29 per share after pricing its IPO at $16 per share. The company eventually settled at $27.58 per share, which is more than 70.0% above its IPO price.
U.S. Treasuries moved higher in a curve-flattening trade, sending yields into the red. The benchmark 10-yr yield dropped three basis points to 2.32%.
Reviewing Thursday's economic data, which included the Producer Price Index for September and the weekly Initial Claims Report:
Producer prices rose 0.4% in September, which is in line with the Briefing.com consensus. Meanwhile, core producer prices rose 0.4%, which is above the 0.2% increase that the Briefing.com consensus expected. Year-over-year, core producer prices are up 2.2%.
The key takeaway from the report is that it will feed the view that the Federal Reserve is on course to raise the fed funds rate again in December. The latter view stems from the understanding that the final demand index increased 2.6% for the 12 months ended in September, marking the largest rise since a 2.8% advance for the 12 months ended February 2012. Meanwhile, the final demand index less foods and energy increased 2.2% for the 12 months ended in September versus 2.0% for the 12 months ended in August.
The latest weekly initial jobless claims count totaled 243,000 while the Briefing.com consensus expected a reading of 255,000. Today's tally was below the revised prior week count of 258,000 (from 260,000). As for continuing claims, they declined to 1.889 million from the revised count of 1.921 million (from 1.938 million).
The key takeaway from the claims data is that it is consistent with a tight labor market, which some members of the Federal Reserve think poses an upside inflation risk.
On Friday, investors will receive the Consumer Price Index for September (Briefing.com consensus +0.6%) at 8:30 ET, Retail Sales for September (Briefing.com consensus +1.5%) also at 8:30 ET, the preliminary reading for the University of Michigan Consumer Sentiment Index for October (Briefing.com consensus 95.6) at 10:00 ET, and Business Inventories for August (Briefing.com consensus +0.7%) also at 10:00 ET.
Nasdaq Composite +22.5% YTD
Dow Jones Industrial Average +15.6% YTD
S&P 500 +13.9% YTD
Russell 2000 +10.9% YTD
Stocks Hit Record Highs Ahead of Earnings Season
11-Oct-17 16:30 ET
Dow +42.21 at 22872.89, Nasdaq +16.30 at 6603.55, S&P +4.60 at 2555.24
https://www.briefing.com/investor/markets/stock-market-update/2017/10/11/stocks-hit-record-highs-ahead-of-earnings-season.htm
[BRIEFING.COM] Stocks posted a modest victory on Wednesday ahead of the third quarter earnings season, which will commence on Thursday morning. The three major indices--the S&P 500 (+0.2%), the Nasdaq (+0.3%), and the Dow (+0.2%)--settled the midweek session at fresh record highs, but the small-cap Russell 2000 underperformed, slipping 0.1%.
Investors received the minutes from the September FOMC meeting on Wednesday afternoon, but they contained little to no new information. In short, the minutes showed that the Fed favors staying on a path of gradual rate hikes, although there was growing concern that the factors keeping a lid on inflation may not be transitory after all.
Following the minutes, the CME FedWatch Tool places the chances of a December rate hike at 88.0%--virtually unchanged from the day prior.
The S&P 500's top-weighted technology sector (+0.5%) finished ahead of the broader market on Wednesday, thanks in large part to mega-cap names like Alphabet (GOOGL 1005.65, +17.85), Facebook (FB 172.74, +1.15), and Apple (AAPL 156.55, +0.65), which added 1.8%, 0.7%, and 0.4%, respectively.
Chipmakers outperformed as well, sending the PHLX Semiconductor Index (+0.7%) higher for the 11th session in a row.
The influential health care sector (+0.2%) also moved higher on Wednesday, with Dow component Johnson & Johnson (JNJ 136.65, +2.75) leading the charge. The multinational conglomerate jumped 2.1% after submitting a new application to the FDA for its prostate cancer drug apalutamide.
On the down side, industrial giant General Electric (GE 23.07, -0.29) dropped for the third session in a row, losing 1.2%, after JPMorgan lowered its target price to $20 from $22. The industrial sector (unch), which houses GE, finished in negative territory.
The financial space (-0.1%) also underperformed as investors engaged in a little profit taking ahead of some important financial earnings. Heavyweights JPMorgan Chase (JPM 96.84, -0.29) and Citigroup (C 74.94, -0.24) will report their quarterly results on Thursday morning, marking the start of the third quarter earnings season.
In the bond market, the benchmark 10-yr Treasury note finished flat, leaving its yield unchanged at 2.35%.
Reviewing Wednesday's economic data, which included the August Jobs Openings and Labor Turnover Survey (JOLTS) and the weekly MBA Mortgage Applications Index:
The August Job Openings and Labor Turnover Survey showed that job openings decreased to 6.08 million from a revised 6.14 million (from 6.17 million) in July.
The weekly MBA Mortgage Applications Index decreased 2.1% to follow last week's 0.4% decline.
On Thursday, investors will receive the Producer Price Index for September (Briefing.com consensus +0.4%) at 8:30 ET, the weekly Initial Claims Report (Briefing.com consensus 255K) also at 8:30 ET, and the Treasury Budget for September at 14:00 ET.
Nasdaq Composite +22.7% YTD
Dow Jones Industrial Average +15.7% YTD
S&P 500 +14.1% YTD
Russell 2000 +11.0% YTD
Bounce Back
10-Oct-17 16:30 ET
Dow +69.61 at 22830.68, Nasdaq +7.52 at 6587.25, S&P +5.91 at 2550.64
https://www.briefing.com/investor/markets/stock-market-update/2017/10/10/bounce-back-.htm
[BRIEFING.COM] Equities bounced back from back-to-back losses on Tuesday, but the performance was somewhat disappointing considering the major U.S. indices hit their session highs in the opening minutes and petered out shortly thereafter. All three major averages touched new all-time highs, but the Dow (+0.3%) was the only one to finish at a new record mark. The S&P 500 and the Nasdaq added 0.2% and 0.1%, respectively.
The S&P 500's consumer staples sector moved higher by 1.0% on Tuesday, with the world's largest retailer leading the advance. Wal-Mart (WMT 84.13, +3.60) surged 4.5%, settling at its highest level in more than two years, after reaffirming its guidance for fiscal year 2018, announcing a $20 billion share repurchase program, and projecting a 40.0% increase in next year's online sales.
Amazon (AMZN 987.20, -3.79) slipped 0.4% following Wal-Mart's ambitious ecommerce forecast, breaking a four session winning streak.
Meanwhile, multinational giant Procter & Gamble (PG 91.62, -0.50) was one of just a few components within the consumer staples space to finish Tuesday in negative territory. P&G shares lost 0.5% after shareholders narrowly voted against giving activist investor Nelson Peltz a seat on the company's board. Mr. Peltz plans to challenge the vote.
Airlines outperformed on Tuesday, sending the U.S. Global Jets ETF (JETS 31.34, +0.56) higher by 1.8%, after American Airlines (AAL 53.05, +2.43) and United Continental (UAL 67.72, +3.02) raised their third quarter guidance. The two names settled with gains of 4.8% and 4.7%, respectively, helping the Dow Jones Transportation Average climb 0.6%.
The lightly-weighted utilities space (+1.0%) finished in line with the consumer staples group at the top of the sector standings. Seven other sectors also advanced, but they finished with more modest gains, adding no more than 0.4%. The consumer discretionary sector (-0.1%) was the lone decliner while the lightly-weighted materials space finished flat.
In the bond market, U.S. Treasuries moved higher on Tuesday, leaving yields below their unchanged marks. The 2-yr yield and the 10-yr yield slipped two basis points apiece, settling at 1.51% and 2.35%, respectively. Meanwhile, the U.S. dollar dropped 0.5% against the euro to 1.1804 despite the ongoing situation in Spain.
Catalan President Carles Puigdemont was expected to declare independence from Spain on Tuesday, but gave Madrid a chance to accept mediation instead. As a reminder, Catalonia voted to split from Spain on October 1, but the Spanish central government has refused to recognize the results.
Also of note, WTI crude futures rallied on Tuesday, jumping 2.6% to $50.86/bbl. The bullish sentiment was attributed to several factors, including Saudi Arabia's announcement that it will cut its monthly exports in November. However, the energy sector only advanced 0.1%.
Investors did not receive any notable economic data on Tuesday.
On Wednesday, market participants will receive the weekly MBA Mortgage Applications Index at 7:00 ET, the Jobs Openings and Labor Turnover Survey (JOLTS) for August at 10:00 ET, and the minutes from the September 19-20 FOMC meeting at 14:00 ET.
Nasdaq Composite +22.4% YTD
Dow Jones Industrial Average +15.5% YTD
S&P 500 +13.9% YTD
Russell 2000 +11.1% YTD
Wall Street Starts the Week on the Back Foot
09-Oct-17 16:30 ET
Dow -12.60 at 22761.07, Nasdaq -10.45 at 6579.73, S&P -4.60 at 2544.73
https://www.briefing.com/investor/markets/stock-market-update/2017/10/9/wall-street-starts-the-week-on-the-back-foot.htm
[BRIEFING.COM] Equities opened the week on the back foot, ticking slightly below the record highs they posted at the tail end of last week. The Nasdaq (-0.2%) and the Dow (-0.1%) finished roughly in line with the S&P 500 (-0.2%) while small caps underperformed, sending the Russell 2000 lower by 0.4%.
The S&P 500's technology sector (+0.2%) got off to a relatively solid start on Monday, but unraveled a bit in the afternoon amid a modest sell off in the broader market. Still, the group managed to eke out a slim victory, something that only four other sectors--energy (+0.3%), utilities (+0.1%), real estate (+0.1%), and materials (unch)--were able to do.
On the flip side, the health care sector (-0.7%) finished at the bottom of the sector standings as just about all of its components finished in the red. Medtronic (MDT 76.93, -2.88) showed particular weakness, dropping 3.6%, after the company said on Friday evening that Hurricane Maria could negatively impact its fiscal second quarter results by $250 million.
The financial group (-0.4%) also tumbled on Monday ahead of the start of earnings season, which will unofficially kick off later this week when several financial heavyweights, including JPMorgan Chase (JPM 96.41, -0.51), Citigroup (C 75.39, -0.25), Bank of America (BAC 25.85, -0.36), and Wells Fargo (WFC 55.14, -0.44), release their quarterly results.
According to FactSet, S&P 500 earnings are expected to increase just 2.8%, down from an estimated growth rate of 7.5% on June 30. Insurance claims associated with hurricane-related damages have been the biggest driver of the downward revision. As a result, the financial sector--which houses insurers--is projected to report the widest year-over-year decline in earnings.
Meanwhile, the energy group is projected to deliver year-over-year growth in excess of 100%, which is by far the largest anticipated gain among the 11 sectors.
Within the Dow, General Electric (GE 23.43, -0.96) plunged 3.9% on Monday after announcing over the weekend that several top executives will be leaving the company, including longtime CFO Jeff Bornstein. The changes are a part of new CEO John Flannery's attempt to reboot the company's business. GE shares have dropped 25.9% this year.
On a positive note, Wal-Mart (WMT 80.53, +1.53) was the Dow's top performer, climbing 1.9%, following a positive mention in this weekend's Barron's magazine and news that the company is launching a new return service that will allow customers to return items in about 30 seconds.
The bond market was closed in observance of Columbus Day, leading to lighter-than-usual volume on the New York Stock Exchange. Only 620 million shares changed hands at the NYSE floor, a ways below the 50-day simple moving average of 805 million.
Investors did not receive any economic data on Monday.
Tuesday's lone economic release--the September NFIB Small Business Optimism Index--will cross the wires at 7:00 ET.
Positive Week Ends on a Down Note
06-Oct-17 16:30 ET
Dow -1.72 at 22773.67, Nasdaq +4.82 at 6590.18, S&P -2.74 at 2549.33
https://www.briefing.com/investor/markets/stock-market-update/2017/10/6/positive-week-ends-on-a-down-note.htm
[BRIEFING.COM] Stocks ended the week on a down note, giving back a small portion of their weekly gains. Losses were modest, however, with the S&P 500 (-0.1%) and the Dow (unch) settling just a tick below their unchanged marks. The tech-heavy Nasdaq (+0.1%) eked out a small victory, settling at yet another record high. For the week, the S&P 500 added 1.2%.
The market took the September jobs report with a grain of salt due to the effects of Hurricane Harvey and Hurricane Irma. The report showed that employment in food services and drinking places declined by 105,000--taking a toll on the nonfarm payrolls figure, which decreased by 33,000 (Briefing.com consensus +75K).
Average hourly earnings, which have been slow to pick up despite a tightening of the labor market, soundly beat expectations though, showing an increase of 0.5% (Briefing.com consensus +0.2%). This figure was also likely affected by the hurricanes, but that didn't stop the market from adjusting its rate-hike expectations.
The CME FedWatch Tool currently places the chances of a December rate hike at 93.1%, up from 77.5% on Thursday.
U.S. Treasuries ended the session in negative territory, with shorter-dated issues showing relative weakness; the yield on the 2-yr Treasury note jumped four basis points to 1.53% while the benchmark 10-yr yield climbed two basis points to 2.37%. The U.S. Dollar Index slipped 0.1% to 93.64.
Most of the S&P 500's eleven sectors finished in the red, but some of the heaviest spaces by weight--including technology (+0.3%), financials (unch), and consumer discretionary (+0.2%)--put together relatively solid performances, helping keep the broader market's loss in check.
The tech group climbed 0.3%, thanks in large part to mega-cap names like Facebook (FB 172.23, +0.99) and Alphabet (GOOGL 993.64, +8.45), which added 0.6% and 0.9%, respectively. Chipmakers were also strong on Friday, sending the PHLX Semiconductor Index higher by 0.5%.
Meanwhile, influential names like Amazon (AMZN 989.58, +8.73), Netflix (NFLX 198.02, +3.63), and McDonald's (MCD 159.60, +0.80) helped carry the consumer discretionary space (+0.2%) to victory, settling with gains between 0.5% and 1.9%. NFLX shares had a solid week, adding 9.2%.
On the flip side, the consumer staples space (-1.0%) underperformed with retail heavyweight Costco (COST 157.09, -9.98) dropping 6.0%, despite beating both top and bottom line estimates. Retail pharmacy names also tumbled after Morgan Stanley downgraded Walgreens Boot Alliance (WBA 73.20, -3.75) to 'Equal-Weight' from 'Overweight'; WBA shares lost 4.9%.
The energy sector (-0.8%) also struggled as the price of WTI crude dropped 2.9% to $49.33/bbl amid concerns of Tropical Storm Nate's potential impact on refineries around the Gulf of Mexico. Tropical Storm Nate is projected to hit the Gulf Coast this weekend as a hurricane.
Reviewing Friday's economic data, which included the September Employment Situation Report, the August Wholesale Inventories Report, and the August Consumer Credit Report:
September Employment Situation
September nonfarm payrolls decreased by 33,000 while the Briefing.com consensus expected an increase of 75,000. The prior month's increase was revised to 169,000 from 156,000.
Nonfarm private payrolls declined by 40,000 while the Briefing.com consensus expected an increase of 98,000. The previous month's increase was revised to 164,000 from 165,000.
Average hourly earnings increased 0.5% (Briefing.com consensus +0.2%), while the previous month's reading was revised to +0.2% (from +0.1%).
The average workweek was reported at 34.4 (Briefing.com consensus 34.3). The previous month's reading was left unrevised at 34.4.
The unemployment rate fell to 4.2% (Briefing.com consensus 4.4%) from 4.4% in the previous month.
The hurricane-related noise of the September employment resonated in the headline payroll numbers, yet the most important takeaway from the report is that wage growth picked up nicely in September and should solidify the case for another rate hike in December.
August Wholesale Inventories
August Wholesale Inventories increased 0.9% (Briefing.com consensus +1.0%). The prior month's reading was left unrevised at +0.6%.
The key takeaway from the report is that the inventory build will be a positive component for Q3 GDP growth forecasts.
August Consumer Credit
The Consumer Credit report for August showed an increase of $13.1 billion while the Briefing.com consensus expected growth of $16.0 billion. The prior month's credit growth was revised to $17.7 billion from $18.5 billion.
Investors will not receive any economic data on Monday.
Nasdaq Composite +22.4% YTD
Dow Jones Industrial Average +15.2% YTD
S&P 500 +13.9% YTD
Russell 2000 +11.3% YTD
Week In Review: Autumn's Still Looking Pretty Green
Stocks started October on the front foot, climbing to new record highs once again, despite the devastating shooting in Las Vegas on Sunday evening, which claimed the lives of more than 50 people and injured over 500 others. The major indices all settled the week in the green with the Dow, the Nasdaq, and the S&P 500 adding 1.7%, 1.5%, and 1.2%, respectively.
This week's bullish bias had its roots in last week's run to record highs, which was sparked by the release of the GOP's latest tax reform outline. The House kept the ball rolling this week by passing a budget that slashes government spending in anticipation of decreased tax revenue. The GOP still has a long way to go, but the market liked the progress.
Excited by the idea of a tax overhaul, the S&P 500's financial sector climbed 1.9% this week to finish comfortably ahead of the broader market. The financial sector has added 10.6% since closing at a three month low on September 7 and now trades just a tick behind the benchmark index for the year.
Automakers were strong this week after reporting largely solid U.S. sales figures for the month of September, which were helped by the replacement of vehicles lost to Hurricane Harvey and Hurricane Irma. General Motors (GM) showed particular strength, climbing 11.3%, after reporting a year-over-year increase of 12.0%.
Netflix (NFLX) also had a good showing, hitting a fresh all-time high, after UBS raised its target price to $225 from $190 and following news that the company will raise the price of its standard and premium video-streaming services. NFLX shares settled with a gain of 9.2%.
Equities did end the week on a down note, however, following a noisy Employment Situation Report for September. The market took the report with a grain of salt since it was tainted by the impacts of Hurricane Harvey and Hurricane Irma, but it didn't do much to alleviate rate-hike concerns nonetheless, showing an increase of 0.5% in average hourly earnings.
As a reminder, average hourly earnings growth, which is positively correlated with inflation, has been tepid in recent months, putting the Fed's rate-hike forecast into question. However, following Friday's jobs report, the market now strongly believes the U.S. central bank will hike rates one more time this year, thereby achieving its goal of three rate hikes in 2017.
The fed funds futures market places the chances of a December rate hike at 93.1%, up from last week's 77.9%.
It's also worth pointing out that the CBOE Volatility Index (VIX) settled at an all-time low (9.19) on Thursday, signaling the market's belief that volatility will remain subdued in the short term. The previous record low (9.31) was recorded nearly 24 years ago in December 1993.
Another Quiet Day Ends In Another Record Close
04-Oct-17 16:25 ET
Dow +19.97 at 22661.64, Nasdaq +2.91 at 6534.63, S&P +3.16 at 2537.74
https://www.briefing.com/investor/markets/stock-market-update/2017/10/4/another-quiet-day-ends-in-another-record-close.htm
[BRIEFING.COM] It was a quiet day on Wall Street, but that didn't stop the stock market from eking out yet another record close. The S&P 500 (+0.1%), the Dow (+0.1%), and the Nasdaq (unch) finished where they resided throughout the majority of the session--just a tick above their flat lines. However, the Russell 2000 slipped 0.3%, breaking its streak of eight consecutive record closes.
Drugmaker Mylan (MYL 37.80, +5.27) surged 16.2% on Wednesday after the FDA approved its generic version of Teva Pharma's (TEVA 16.08, -2.74) multiple sclerosis drug Copaxone. Mylan's positive performance helped the S&P 500's influential health care sector (+0.5%) finish ahead of the broader market.
Like health care, the consumer discretionary sector (+0.5%) also outperformed on Wednesday with its top component by market cap--Amazon (AMZN 965.45, +8.35)--bouncing back from two days of losses. Netflix (NFLX 184.45, +5.26) also had a solid showing after UBS raised its target price to $225 from $190. AMZN and NFLX shares added 0.9% and 2.9%, respectively.
The majority of the S&P 500's 11 sectors finished in the green, however, the two most influential groups--technology and financials--did not.
Mega-cap names like Apple (AAPL 153.48, -1.00, -0.7%), Facebook (FB 168.42, -1.54, -0.9%), and Alphabet (GOOGL 966.78, -5.30, -0.6%) weighed on the tech space, overpowering gains from smaller components. Chipmakers managed to settle slightly ahead of the broader market though, evidenced by the PHLX Semiconductor Index (+0.2%).
As for financials, banks like JPMorgan Chase (JPM 96.36, -0.99) and Wells Fargo (WFC 54.96, -0.62) led the retreat, dropping around 1.0% apiece.
The energy sector (-0.1%) finished lower as well, weighed down by the price of crude oil--which dipped below $50.00/bbl despite an upbeat EIA inventory report; the Energy Information Administration reported that U.S. crude inventories declined by 6.0 million barrels (consensus -0.5 million barrels) for the week ended September 29.
In the bond market, U.S. Treasuries finished roughly flat with shorter-dated issues showing relative strength; the yield on the 2-yr Treasury note slipped one basis point to 1.47%. Meanwhile, the benchmark 10-yr yield settled unchanged at 2.33%.
Fed Chair Janet Yellen did speak on Wednesday, but made no mention of monetary policy.
Reviewing Wednesday's economic data, which included the September ADP Employment Change Report, the September ISM Services Index, and the weekly MBA Mortgage Applications Index:
The ADP National Employment Report showed an increase of 135,000 in September (Briefing.com consensus 160,000) while the August reading was revised lower to 228,000 from 237,000.
The ISM Services Index for September rose to 59.8 from an unrevised reading of 55.3 in August. The Briefing.com consensus expected a reading of 55.3.
The key takeaway from the report is that it gives the Federal Reserve some data-based ammunition to raise the fed funds rate in December since the Prices Index increased substantially and hit its highest level since February 2012, mirroring a big jump as well in the Prices Index for the ISM Manufacturing report.
The weekly MBA Mortgage Applications Index decreased 0.4% to follow last week's 0.5% decline.
On Thursday, investors will receive the weekly Initial Claims Report (Briefing.com consensus 265K) at 8:30 ET, the August Trade Balance (Briefing.com consensus -$42.6 billion) also at 8:30 ET, and August Factory Orders (Briefing.com consensus +1.0%) at 10:00 ET.
Nasdaq Composite +21.4% YTD
Dow Jones Industrial Average +14.7% YTD
S&P 500 +13.4% YTD
Russell 2000 +11.1% YTD
Wall Street Settles in Record Territory Once Again
03-Oct-17 16:30 ET
Dow +84.07 at 22641.67, Nasdaq +15.00 at 6531.72, S&P +5.46 at 2534.58
https://www.briefing.com/investor/markets/stock-market-update/2017/10/3/wall-street-settles-in-record-territory-once-again.htm
[BRIEFING.COM] Stocks moved higher for the sixth session in a row on Tuesday, but trading was rather dull as the major indices largely trended sideways from start to finish. The Dow (+0.4), the S&P 500 (+0.2%), the Nasdaq (+0.2%), and the Russell 2000 (+0.2%) all finished at fresh record highs.
Automakers released their U.S. sales for the month of September on Tuesday. The numbers mostly showed solid year-over-year gains, thanks in part to hurricane-related vehicle replacement:
General Motors (GM 43.45, +1.30) sold 279,397 units (+12.0% YoY)
Ford Motor (F 12.34, +0.25) sold 222,248 units (+8.7% YoY)
Fiat Chrysler (FCAU 17.96, +0.01) sold 174,266 units (-10.0% YoY)
Toyota Motor (TM 120.34, +1.03) sold 226,632 units (+14.9% YoY)
Honda Motor (HMC 30.20, +0.42) sold 142,772 units (+6.8% YoY)
Outside of September, auto sales have been disappointing this year as demand cools following a seven-year run of increasing sales, which culminated in a record 17.6 million units sold in 2016.
On a related note, electric automaker Tesla (TSLA 348.14, +6.61) reported third quarter figures, showing a year-over-year increase of 4.5% in the number of delivered vehicles (26,150). However, production of the company's new, lower-priced Model 3 sedan was just a fraction of what CEO Elon Musk projected.
TSLA shares initially sold off following the news--holding a loss of 3.0% at their worst mark of the day--but eventually settled with a gain of 1.9%.
Airlines rallied on Tuesday, sending the U.S. Global Jets ETF (JETS 30.94, +1.22) higher by 4.1%, after Delta Air Lines (DAL 51.25, +3.18) reaffirmed its third quarter unit revenue and margin guidance, excluding the costs associated with Hurricane Irma, which struck its Atlanta Hub last month. DAL shares added 6.6%.
In Washington, Wells Fargo (WFC 55.58, +0.11) CEO Timothy Sloan and former Equifax (EFX 110.45, +2.64) CEO Richard Smith testified before Congress on Tuesday in regards to their respective controversies; Mr. Smith answered questions regarding Equifax's recent data breach while Mr. Sloan was grilled on Wells Fargo's fake-account scandal.
Chipmakers as a whole performed roughly in line with the broader market, evidenced by the PHLX Semiconductor Index (+0.3%), but Advanced Micro (AMD 13.42, +0.71) surged 5.6% following vague M&A speculation. Dow component Intel (INTC 39.38, +0.34) also outperformed, notching its fourth consecutive victory with a gain of 0.9%.
On the earnings front, homebuilder Lennar (LEN 55.35, +2.53) jumped 4.8% after beating bottom-line estimates.
Elsewhere, U.S. Treasuries moved modestly higher on Tuesday, leaving yields in the red; the benchmark 10-yr yield dropped one basis point to 2.33%. Meanwhile, the CBOE Volatility Index (VIX 9.57, +0.12) climbed 1.3%, but still managed to settle below the historically-low 10.00 mark.
Investors did not receive any economic data on Tuesday.
On Wednesday, market participants will receive the weekly MBA Mortgage Applications Index at 7:00 ET, the September ADP Employment Change Report (Briefing.com consensus 160K) at 8:15 ET, and the September ISM Services Index (Briefing.com consensus 55.3) at 10:00 ET.