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Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34364.50 +99.13 (0.29%)
Nasdaq 13855.13 +86.21 (0.63%)
SP 500 4410.21 +12.27 (0.28%)
10-yr Note +4/32 1.717
NYSE Adv 1459 Dec 1804 Vol 1.5 bln
Nasdaq Adv 2159 Dec 1710 Vol 6.9 bln
Industry Watch
Strong: Consumer Discretionary, Energy, Industrials
Weak: Utilities, Health Care, Information Technology
Moving the Market
-- Small-caps lead intraday recovery effort; market was oversold and due for a bounce
-- Consternations about the Ukraine-Russia situation, the Fed's policy meeting, and earnings this week
-- S&P 500 enters contraction territory, Nasdaq Composite approaches bear market territory
Stocks make huge comeback after facing steep losses
24-Jan-22 16:20 ET
Dow +99.13 at 34364.50, Nasdaq +86.21 at 13855.13, S&P +12.27 at 4410.21
[BRIEFING.COM] The S&P 500 increased 0.3% on Monday in a furious buy-the-dip trade after being down as much as 4.0% intraday. The Nasdaq Composite gained 0.6% after being down 4.9% intraday, and the Dow Jones Industrial Average gained 0.3% after being down 3.3% intraday.
The Russell 2000 outperformed with a 2.3% gain after being down as much as 2.8%. The small-cap index traded in bear market territory today, or down at least 20% from a recent high, so its outperformance stemmed from the fact that it was hit the hardest.
Eight of the 11 S&P 500 sectors closed higher after all 11 traded with steep losses. The consumer discretionary sector (+1.2%) led the recovery effort with a 1% gain, while the defensive-oriented utilities (-1.0%), health care (-0.4%), and consumer staples (-0.4%) sectors closed lower.
The session opened on a weak note, which gave way to a steady decline that accentuated the market's concerns on the Fed's tightening plans, the Russia-Ukraine situation, and peak earnings growth, among others. The selling itself was a concern, too, leading to expectations for more downside -- the CBOE Volatility Index (29.90, +1.05, +3.6%) spiked as much as 35% before calming down.
There's no doubt the market was oversold on a short-term basis and was due for a bounce, but no one really knew when that would happen. Fortunately for the bulls, the bounce happened today on no specific news and some short-covering activity in front of an eventful week in earnings, the Fed, and economic data.
It's worth noting that the Nasdaq Composite bottomed just before it could enter bear market territory. The tech-sensitive index was down 19.2% from its all-time high while the S&P 500 was down 12.4% from its all-time high.
Strikingly, the Treasury market never really exhibited a flight for safety, suggesting that the early weakness was more technically-oriented. The 10-yr yield declined just one basis point to 1.74% after trading at 1.71% during the day while the 2-yr yield declined two basis points to 0.97%. The U.S. Dollar Index rose 0.3% to 95.92. WTI crude fell 2.2%, or $1.86, to $83.30/bbl.
Separately, Kohl's (KSS 63.71, +16.87, +36.0%) stood out with a 36% gain after confirming takeover interest from PE firms, which are reportedly willing to acquire the company for at least $64 per share.
Reviewing Monday's economic data:
The preliminary IHS Markit Services PMI for January fell to 55.0 from 57.7 in the final reading for December. The preliminary IHS Markit Services PMI for January fell to 50.9 from 57.6 in the final reading for December.
Looking ahead, investors will receive the Conference Board's Leading Economic Index for January, the S&P Case-Shiller Home Price Index for November, and the FHFA Housing Price Index for November on Tuesday.
Dow Jones Industrial Average -5.4% YTD
S&P 500 -7.5% YTD
Russell 2000 -9.4% YTD
Nasdaq Composite -11.4% YTD
Crude futures settle lower by 2%
24-Jan-22 15:30 ET
Dow -399.27 at 33866.10, Nasdaq -144.87 at 13624.05, S&P -56.81 at 4341.13
[BRIEFING.COM] The S&P 500 is down 1.4% to trade near session "highs."
One last look at the sector performances shows utilities (-2.4%) and health care (-1.9%) underperforming with steep losses, while the consumer discretionary sector (-0.6%) outperforms on a relative basis with a 0.6% decline.
WTI crude futures settled lower by 2.2%, or $1.86, to $83.30/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34265.37 -450.02 (-1.30%)
Nasdaq 13768.92 -385.10 (-2.72%)
SP 500 4397.94 -84.79 (-1.89%)
10-yr Note +4/32 1.762
NYSE Adv 649 Dec 2615 Vol 1.3 bln
Nasdaq Adv 841 Dec 3544 Vol 5.8 bln
Industry Watch
Strong: Consumer Staples
Weak: Communication Services, Consumer Discretionary, Materials
Moving the Market
-- S&P 500 closes below 200-day moving average (4429)
-- Netflix (NFLX) plunges 22% on disappointing Q1 guidance
-- Concerns about profit margins, valuations, the Fed, and geopolitics
-- Safe-haven trade in Treasuries
S&P 500 loses battle with its 200-day moving average
21-Jan-22 16:20 ET
Dow -450.02 at 34265.37, Nasdaq -385.10 at 13768.92, S&P -84.79 at 4397.94
[BRIEFING.COM] The S&P 500 fell 1.9% on Friday, as de-risking efforts persisted amid an inclination to sell into strength, disappointing Q1 guidance from Netflix (NFLX 397.50, -110.75, -21.8%), deteriorating technical factors, and a flight to safety in Treasuries.
The Nasdaq Composite declined 2.7%, the Dow Jones Industrial Average declined 1.3%, and the Russell 2000 declined 1.8%.
Eight of the 11 S&P 500 sectors fell at least 1.0%, including the communication services sector with a 3.9% decline. The consumer staples sector (+0.02%) closed fractionally higher.
The session began with Netflix weighing on sentiment after the company guided for slower subscriber growth and below-consensus revenue for Q1, as well as a smaller operating margin versus Q1 of last year amid higher programming costs.
The operating margin guidance, coupled with a Q1 EPS warning from PPG Industries (PPG 154.74, -4.96, -3.1%), fed into concerns about higher costs eating into profits. In addition, the visceral reaction mirrored the plunge in Peloton (PTON 27.06, +2.84, +11.7%) yesterday, stirring a fear of being invested in high-multiple growth stocks that disappoint.
In Peloton's defense, the company provided reassuring Q2 guidance, and its CEO said prior reporting of its plans to pause production was inaccurate. PTON shares bounced roughly 12% today after falling 24% yesterday.
Back to the broader market, buyers swooped in to defend a violation of the S&P 500's 200-day moving average (4429) early in the session. The benchmark index briefly returned into positive territory, until investors reprised efforts to sell into strength. The benchmark index closed below the key technical level.
This negative price action left buyers mistrustful of the market, imprinting a belief that the dip will keep on dipping until proven otherwise. The CBOE Volatility Index increased 12.7% to 28.85 amid increased hedging interest.
Other worries in the market included what the Fed will say in next week's policy meeting and the Russia-Ukraine conflict that the U.S. is trying to defuse.
The Treasury market was less of a concern, but only because it was acting as a safe-haven trade from equities. The 2-yr yield fell six basis points to 0.99%, and the 10-yr yield fell nine basis points to 1.75%. The U.S. Dollar Index decreased 0.1% to 95.63. WTI crude futures fell 1.3%, or $1.13, to $85.16/bbl.
Friday's economic data was limited to the Conference Board's Leading Economic Index for December, which increased 0.8%, as expected, following a revised 0.7% increase (from +1.1%) in November. On Monday, investors will receive the preliminary IHS Markit Manufacturing and Services PMIs for January.
Dow Jones Industrial Average -5.7% YTD
S&P 500 -7.7% YTD
Russell 2000 -11.5% YTD
Nasdaq Composite -12.0% YTD
Crude futures settle lower amid de-risking efforts
21-Jan-22 15:30 ET
Dow -457.74 at 34257.65, Nasdaq -349.14 at 13804.88, S&P -82.85 at 4399.88
[BRIEFING.COM] The S&P 500 is down 1.8% to trade at session lows amid losses in all 11 sectors.
Eight of the 11 sectors are down over 1.0%, including a 3.5% decline in the communication services sector. The consumer staples sector (-0.1%) outperforms on a relative basis with a 0.1% decline.
WTI crude futures settled lower by 1.3%, or $1.13, to $85.16/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34715.39 -313.26 (-0.89%)
Nasdaq 14154.02 -186.23 (-1.30%)
SP 500 4482.73 -50.03 (-1.10%)
10-yr Note +3/32 1.833
NYSE Adv 813 Dec 2426 Vol 941.5 mln
Nasdaq Adv 1196 Dec 3192 Vol 5.0 bln
Industry Watch
Strong: Utilities
Weak: Consumer Discretionary, Materials, Information Technology, Industrials
Moving the Market
-- Investors sell into strength (again) and market closes at session lows
-- Indiscriminate selling
-- Peloton (PTON) drops 24% on CNBC report that it's temporarily halting production of its bikes due to significantly lower demand
Stocks tumble into the close, fading early gains
20-Jan-22 16:20 ET
Dow -313.26 at 34715.39, Nasdaq -186.23 at 14154.02, S&P -50.03 at 4482.73
[BRIEFING.COM] The S&P 500 declined 1.1% on Thursday in another disappointing session, as investors doubled down on the inclination to sell into strength. The benchmark index faded a 1.5% gain and closed the session down 7.0% from its all-time high.
The Nasdaq Composite fell 1.3% after being up 2.1% intraday. The Dow Jones Industrial Average fell 0.9% after being up 1.3% intraday. The Russell 2000 fell 1.9% after being up 2.0% intraday.
Ten of the 11 S&P 500 sectors closed lower after all 11 traded in positive territory in the morning. The consumer discretionary (-1.9%), materials (-1.4%), and information technology (-1.3%) sectors led the retreat, while the utilities sector (+0.1%) eked out a gain.
The bullish bias in the morning was attributed to a belief that the market was oversold on a short-term basis and was due for a bounce. Both the Nasdaq Composite and Russell 2000 entered the session in correction territory, or down at least 10% from a recent high.
Investors waited a little longer than yesterday to sell into strength, which ultimately diminished confidence in the market and scared away potential buyers on the fear that the dip will keep on dipping. The S&P 500 briefly topped the 4600 level around 10:00 a.m. ET before running into negative headlines later in the day.
Selling interest picked up after CNBC reported that Peloton (PTON 24.22, -7.62, -23.9%) is temporarily pausing production of its bikes due to waning consumer demand. Later, The Wall Street Journal reported that the U.S. gave approval for Estonia, Lithuania, and Latvia to send arms to Ukraine.
The Peloton story served as reminder of the risks that many story stocks still face if their stories don't play out as intended. The Ukraine story was more of a negative geopolitical headline in the middle of a market downturn, meaning the market was less disturbed by the report and saw it more as a convenient selling excuse.
The latter theory was supported by the lack of a safe-haven trade in Treasuries and gold ($1842.60/ozt, unch). The 10-yr yield increased just one basis point to 1.83% while the 2-yr yield rose four basis points to 1.05% on continued expectations for a more hawkish Fed. The U.S. Dollar Index gained 0.4% to 96.85. WTI crude futures fell 0.7%, or $0.57, to $86.29/bbl.
Pivoting to earnings news, United Airlines (UAL 42.88, -1.52, -3.4%) and American Airlines (AAL 16.76, -0.55, -3.2%) were swept up in the downturn after providing cautious near-term outlooks. Travelers (TRV 165.18, +5.11, +3.2%) and Union Pacific (UNP 242.07, +2.58, +1.1%) were two earnings standouts.
Reviewing Thursday's economic data:
Initial claims for the week ending January 15 increased by 55,000 to 286,000 (Briefing.com consensus 211,000) while continuing claims for the week ending January 8 increased by 84,000 to 1.635 million.
The key takeaway from the report is that it is apt to be construed as a sign of the negative impact the Omicron variant is having on the labor market since it is the highest initial claims number since October; moreover, this report includes the week in which the survey for the January employment report was conducted, so the higher print could dial down expectations for the gain in January nonfarm payrolls.
Existing home sales declined 4.6% m/m in December to a seasonally adjusted annual rate of 6.18 million (Briefing.com consensus 6.42 million). Total sales in December were down 7.1% from a year ago. Total home sales in 2021, however, reached 6.12 million, which was up 8.5% year-over-year and the highest annual level since 2006.
The key takeaway from the report is that prices remain high as inventory remains extremely tight. The supply constraint is crimping sales growth in the existing home market, as are increasing affordability pressures created by the high selling prices and rising mortgage rates.
The Philadelphia Fed Index for January increased to 23.2 (Briefing.com consensus 20.0) from 15.4 in December.
Looking ahead, investors will receive the Conference Board's Leading Economic Index for December on Friday.
Dow Jones Industrial Average -4.5% YTD
S&P 500 -6.0% YTD
Russell 2000 -9.9% YTD
Nasdaq Composite -9.5% YTD
Market turns negative amid selling momentum
20-Jan-22 15:30 ET
Dow -41.77 at 34986.88, Nasdaq -62.00 at 14278.25, S&P -13.83 at 4518.93
[BRIEFING.COM] The S&P 500 has turned negative with a 0.3% decline as selling interest picks up. The inclination to sell into strength has undercut confidence in this market.
One last look at the sectors shows consumer discretionary (-1.0%) leading the market lower with a 1.0% decline amid weakness in Amazon (AMZN 3053.38, -73.25, -2.4%). Conversely, the utilities (+0.6%), energy (+0.4%), financials (+0.2%), and health care (+0.2%) sectors trade higher.
WTI crude futures settled lower by 0.7%, or $0.57, to $86.29/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35028.65 -339.82 (-0.96%)
Nasdaq 14340.25 -166.64 (-1.15%)
SP 500 4532.76 -44.35 (-0.97%)
10-yr Note +4/32 1.834
NYSE Adv 1016 Dec 2292 Vol 942.1 mln
Nasdaq Adv 1443 Dec 2879 Vol 4.6 bln
Industry Watch
Strong: Consumer Staples, Utilities
Weak: Financials, Consumer Discretionary, Information Technology
Moving the Market
-- Investors sell into early strength and market closes at session lows in weak finish
-- Inability to rebound with lower interest rates and encouraging earnings news
-- Selling momentum
Stocks close lower in disappointing session
19-Jan-22 16:20 ET
Dow -339.82 at 35028.65, Nasdaq -166.64 at 14340.25, S&P -44.35 at 4532.76
[BRIEFING.COM] The S&P 500 fell 1.0% on Wednesday, fading an early 0.8% gain despite encouraging earnings news and a decline in interest rates. The Nasdaq Composite (-1.2%) and Dow Jones Industrial Average (-1.0%) performed comparably to the benchmark index, while the Russell 2000 lagged with a 1.6% decline.
Nine of the 11 S&P 500 sectors closed lower, as selling interest accelerated into the close on no specific news. The consumer discretionary (-1.8%), financials (-1.7%), and information technology (-1.4%) sectors led the retreat, while the consumer staples (+0.7%) and utilities (+0.5%) sectors closed higher.
Early on, there was optimism surrounding the EPS beats from Procter & Gamble (PG 162.00, +5.27, +3.4%), UnitedHealth (UNH 462.52, +1.53, +0.3%), Bank of America (BAC 46.44, +0.18, +0.4%), and Morgan Stanley (MS 95.74, +1.73, +1.8%) insofar that they signaled more companies would successfully navigate the higher-cost business environment.
At the same time, interest rates had backed off from overnight highs and continued to push lower throughout the session. It looked like a good set-up for an equity rebound, but unfortunately, that didn't happen. The inability to rebound from sizable losses deterred risk sentiment, fueling a belief that more downside was ahead.
Presumably, investors bought the dip in Treasuries to hide out from the equity volatility, geopolitical uncertainty, and any impact from the Fed's tightening plans. As a reminder, the Fed meets next week to discuss monetary policy.
The 2-yr yield declined two basis points to 1.01% after flirting with 1.08% overnight, and the 10-yr yield declined four basis points to 1.83% after flirting with 1.90% overnight. The U.S. Dollar Index declined 0.2% to 95.56. WTI crude futures approached $87.00 per barrel ($86.86/bbl, +1.38, +1.6%).
Interestingly, homebuilding stocks were noticeably weak despite housing starts and building permits for December beating expectations. There might have been some disappointment that the increases were driven by multi-unit dwellings instead of single-unit dwellings.
The iShares US Home Construction ETF (ITB 71.73, -1.88) fell 2.6%, additionally pressured by KeyBanc Capital Markets downgrading several stocks in the space.
Reviewing Wednesday's economic data:
Housing starts increased 1.4% month-over-month in December to a seasonally adjusted annual rate of 1.702 million (Briefing.com consensus 1.650 million) while permits increased 9.1% month-over-month to 1.873 million (Briefing.com consensus 1.702 million).
The key takeaway from the report is that the increases were driven by multi-unit dwellings. Single-unit starts were down 2.3% and single-unit permits were up just 2.0% with little to no growth in the two largest homebuilding regions (the South and the West).
The weekly MBA Mortgage Applications Index increased 2.3% following a 1.4% increase in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report, Existing Home Sales for December, and the Philadelphia Fed Index for January on Thursday.
Dow Jones Industrial Average -3.6% YTD
S&P 500 -4.9% YTD
Russell 2000 -8.1% YTD
Nasdaq Composite -8.3% YTD
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35368.47 -543.34 (-1.51%)
Nasdaq 14506.89 -386.86 (-2.60%)
SP 500 4577.11 -85.74 (-1.84%)
10-yr Note -26/32 1.874
NYSE Adv 516 Dec 2818 Vol 1.0 bln
Nasdaq Adv 817 Dec 3602 Vol 5.0 bln
Industry Watch
Strong: Energy
Weak: Information Technology, Financials, Communication Services
Moving the Market
-- Major indices down over 1.0% as interest rates continue to climb
-- 2-yr yield tops 1.00% on expectations for four rate hikes this year
-- Higher oil prices fuel inflation angst
-- Disappointing bank earnings reactions
Stocks drop amid rising rates and Goldman Sachs EPS miss
18-Jan-22 16:20 ET
Dow -543.34 at 35368.47, Nasdaq -386.86 at 14506.89, S&P -85.74 at 4577.11
[BRIEFING.COM] The S&P 500 fell 1.8% on Tuesday amid anxiety surrounding rising interest rates, as well as some concerns about corporate earnings. The Nasdaq Composite (-2.6%) and Russell 2000 (-3.1%) suffered steeper losses while the Dow Jones Industrial Average fell 1.5%.
Ten of the 11 S&P 500 sectors closed lower with losses ranging from 0.7% (real estate) to 2.5% (information technology). The energy sector (+0.4%) was the exception, extending its monthly gain to roughly 17%, amid another 2% increase in oil prices ($85.48, +1.61, +1.9%).
The first issue for the market today was the persistent rise in Treasury yields, which signaled growing expectations for the Fed to hike rates four times this year -- including a potential 50-bps increase in March -- to keep inflation in check.
The 2-yr yield jumped seven basis points to 1.03%, the 10-yr yield jumped nine basis points to 1.87%, and the 30-yr yield jumped seven basis points to 2.18%. The U.S. Dollar Index increased 0.5% to 95.76. Inflation angst was fueled by the increase in oil prices, which was a byproduct of tensions in Europe and the Middle East.
Goldman Sachs (GS 354.40, -26.54, -7.0%) was the second problem today, as shares fell 7% after missing EPS estimates amid a sharp increase in compensation expenses. Rising wages have previously been cited as a potential headwind for corporate earnings, so to see that play out negatively in Goldman's case might have fueled concerns about this being a pain point for this earnings season.
The latter could explain why selling interest was almost indiscriminate. Growth stocks (big and small) may have led the retreat, but value stocks (excluding energy) also did poorly. The Russell 3000 Index fell 2.4%, and the Russell 3000 Value Index fell 1.5%.
Apart from inflation pressures, risk sentiment was curbed by deteriorating technical factors and a negative reading in the Empire State Manufacturing Survey for January, which dropped to -0.7 (Briefing.com consensus 25.0) from 31.9 in December. The Nasdaq Composite closed below its 200-day moving average (14730) for the first time since April 2020.
Separately, Microsoft (MSFT 302.65, -7.55, -2.4%) announced an acquisition of Activision Blizzard (ATVI 82.31, +16.92, +25.9%) for $68.7 billion, or $95.00 per share, in cash.
Reviewing Tuesday's economic data:
The Empire State Manufacturing Survey for January dropped to -0.7 (Briefing.com consensus 25.0) from 31.9 in December.
The NAHB Housing Market Index for January decreased to 83 (Briefing.com consensus 84) from 84 in December.
Looking ahead, investors will receive Housing Starts and Building Permits for December and the weekly MBA Mortgage Applications Index on Wednesday.
Dow Jones Industrial Average -2.7% YTD
S&P 500 -4.0% YTD
Russell 2000 -6.6% YTD
Nasdaq Composite -7.3% YTD
Crude futures settle above $85 per barrel
18-Jan-22 15:30 ET
Dow -508.43 at 35403.38, Nasdaq -333.54 at 14560.21, S&P -77.58 at 4585.27
[BRIEFING.COM] The S&P 500 is down 1.7% while the Russell 2000 underperforms with a 2.2% decline.
One last look at the S&P 500 sectors shows energy (+0.6%) back in positive territory while the other ten sectors trade lower between 0.8% (real estate) and 2.2% (information technology).
WTI crude futures settled higher by 1.9%, or $1.61, to $85.48/bbl amid rising tensions in Europe and the Middle East.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35911.81 -201.81 (-0.56%)
Nasdaq 14893.75 +86.94 (0.59%)
SP 500 4662.85 +3.82 (0.08%)
10-yr Note -29/32 1.782
NYSE Adv 1301 Dec 1961 Vol 893.2 mln
Nasdaq Adv 1994 Dec 2396 Vol 4.3 bln
Industry Watch
Strong: Energy, Information Technology, Communication Services
Weak: Real Estate, Financials, Materials, Utilities
Moving the Market
-- Market overcomes hurdles in front of three-day weekend, as investors buy the intraday dip
-- Mixed bank earnings, downbeat economic data, interest rates rise
-- Relative strength in the mega-caps
S&P 500 overcomes hurdles in front of three-day weekend
14-Jan-22 16:15 ET
Dow -201.81 at 35911.81, Nasdaq +86.94 at 14893.75, S&P +3.82 at 4662.85
[BRIEFING.COM] The S&P 500 gained 0.1% on Friday after being down 1.0% intraday, as the market overcame mixed bank earnings, downbeat economic data, and a sharp rise in interest rates. The Nasdaq Composite (+0.6%) and Russell 2000 (+0.1%) also closed higher, while the Dow Jones Industrial Average fell 0.6%.
Starting with earnings, JPMorgan Chase (JPM 157.89, -10.34, -6.2%) was an eye sore with a 6% decline after missing revenue estimates, while Wells Fargo (WFC 58.06, +2.06, +3.7%) rallied about 4% on upbeat results. Citigroup (C 66.93, -0.85, -1.3%) and BlackRock (BLK 848.60, -18.98, -2.2%) also underwhelmed investors with their results.
The financials sector (-1.0%) was the second-weakest performer in the S&P 500 behind the real estate sector (-1.2%). The materials sector (-0.8%) was restrained by a Q4 EPS warning from Sherwin-Williams (SHW 308.46, -8.93, -2.8%), which cited raw-material availability and labor headwinds in December.
Conversely, the energy sector (+2.4%) was impressive, rising 2.4% amid another increase in WTI crude futures ($83.87, +1.91, +2.3%). The information technology (+0.9%) and communication services (+0.5%) sectors were instrumental in the comeback amid relative strength in the mega-caps.
The Vanguard Mega Cap Growth ETF (MGK 246.35, +0.73, +0.3%) rose 0.3% in an opportunistic trade after entering the session down 5.8% for the year. For comparison, the Invesco S&P 500 Equal Weight ETF (RSP 161.58, -0.28, -0.2%) declined 0.2% today.
The sharp increase in 10-yr yield, which rose six basis points to 1.77%, did not deter the intraday rebound effort. The 2-yr yield rose seven basis points to 0.96% on expectations for a more assertive Fed. The U.S. Dollar Index advanced 0.4% to 95.16.
Interest rates rose despite retail sales for December, industrial production and capacity utilization for December, and preliminary consumer sentiment for January decreasing on a month-over-month basis. The catalyst was perhaps the inflation component of the consumer sentiment report, which showed 5-year inflation expectations rose to 3.1% -- its highest level since 2011.
Separately, casino stocks outperformed after Bloomberg reported that Macau authorities will issue up to six casino licenses as part of regulatory changes in the city. Las Vegas Sands (LVS 42.99, +5.33, +14.2%) rallied 14% on the news.
Reviewing Friday's economic data:
Total retail sales were down 1.9% month-over-month in December (Briefing.com consensus 0.0%) while retail sales, excluding autos, decreased 2.3% (Briefing.com consensus 0.2%). On a year-over-year basis, total retail sales were up 16.9% and up 18.8% excluding autos.
The key takeaway from the report is that total retail sales, which are not adjusted for inflation, contracted at their fastest pace since last February in the face of broadly higher prices. This suggests that inflation is weighing down consumer spending.
Total industrial production decreased 0.1% in December (Briefing.com consensus 0.3%) following an upwardly revised 0.7% increase (from 0.5%) in November. The capacity utilization rate dipped to 76.5% (Briefing.com consensus 77.1%) from a revised 76.6% (from 76.8%) in November.
The key takeaway from the report is that the December dip was owed to a pullback in manufacturing production after two months of solid growth.
The preliminary January reading for the University of Michigan Index of Consumer Sentiment came in at 68.8 (Briefing.com consensus 68.5) versus the final December reading of 70.6.
The key takeaway from the report is that inflation expectations are becoming more entrenched, as the 5-year inflation expectations rose to 3.1%, representing the first increase above the 3.0% mark since 2011.
Import prices fell 0.2% in December after increasing 0.7% in November. Excluding oil, import prices increased 0.5% after increasing 0.5% in November. Export prices fell 1.8% after increasing 0.8% in November. Excluding agriculture, export prices fell 2.1% after increasing 0.6% in November.
Business inventories increased 1.3% m/m in November (Briefing.com consensus 1.0%) following a revised 1.3% increase (from 1.2%) in October.
Looking ahead, investors will receive the Empire State Manufacturing Index for January, the NAHB Housing Market Index for January, and Net Long-Term TIC Flows for November on Tuesday. As a reminder, the market will be closed on Monday in observance of Martin Luther King, Jr. Day.
Dow Jones Industrial Average -1.2% YTD
S&P 500 -2.2% YTD
Russell 2000 -3.7% YTD
Nasdaq Composite -4.8% YTD
Crude futures settle near $84 per barrel
14-Jan-22 15:30 ET
Dow -286.27 at 35827.35, Nasdaq +51.00 at 14857.81, S&P -6.19 at 4652.84
[BRIEFING.COM] The S&P 500 is down 0.1% to trade near its best levels of the session amid an uptick in the mega-cap stocks, which are seeing some relief after a tough start to the year.
One last look at the sectors shows energy (+2.3%) in a league of its own amid higher oil prices, followed by the information technology (+0.7%) and communication services (+0.5%) sectors. The financials (-1.2%) and real estate (-1.1%) sectors are down more than 1.0%.
WTI crude futures settled higher by 2.3%, or $1.91, to $83.87/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 36290.32 +38.30 (0.11%)
Nasdaq 15188.39 +34.94 (0.23%)
SP 500 4726.35 +13.28 (0.28%)
10-yr Note +1/32 1.733
NYSE Adv 1654 Dec 1570 Vol 854.0 mln
Nasdaq Adv 1850 Dec 2609 Vol 4.3 bln
Industry Watch
Strong: Materials, Consumer Discretionary
Weak: Health Care
Moving the Market
-- Large-cap indices eke out gains following hot CPI report for December
-- Total CPI increased 0.5% m/m (Briefing.com consensus 0.4%), leaving it up 7.0% yr/yr
-- Tame response in the Treasury market
Large-caps eke out gains following hot CPI data
12-Jan-22 16:15 ET
Dow +38.30 at 36290.32, Nasdaq +34.94 at 15188.39, S&P +13.28 at 4726.35
[BRIEFING.COM] The large-cap indices eked out gains on Wednesday, as investors lacked conviction following another hot Consumer Price Index (CPI) report for December. The S&P 500 (+0.3%), Nasdaq Composite (+0.2%), and Dow Jones Industrial Average (+0.1%) rose between 0.1-0.3% while the Russell 2000 fell 0.8%.
Ten of the 11 S&P 500 sectors did close in positive territory, but the lightly-weighted materials sector (+1.0%) was the only sector that rose at least 1.0%. The health care sector (-0.3%) was the lone holdout with a modest decline. Declining issues outpaced advancing issues at the Nasdaq.
Specifying the data, total CPI rose 0.5% m/m in December (Briefing.com consensus 0.4%) and was up 7.0% yr/yr, which was the sharpest 12-month increase since June 1982. Core CPI, which excludes food and energy, rose 0.6% m/m (Briefing.com consensus 0.5%) and was up 5.5% yr/yr.
The 10-yr yield went from 1.74% to 1.71% in the wake of the report, signaling that inflation-rate expectations could be peaking with the Fed planning to tighten policy this year. This immediate decline in long-term rates was cited as early boost for the stock market, particularly the growth stocks.
The S&P 500 was up 0.8% shortly after the open, but as the 10-yr yield stabilized, so did the rebound bias in growth stocks. The Russell 3000 Growth Index, for example, increased just 0.2% after being up 1.2% intraday.
Fortunately for the large-cap indices, the mega-caps did okay. The Vanguard Mega Cap Growth ETF (MGK 252.32, +1.53, +0.6%) advanced 0.6%, which was better than the 0.1% gain in the Invesco S&P 500 Equal Weight ETF (RSP 162.61, +0.13, +0.1%).
In the afternoon, the Fed's Beige Book for January noted that economic activity in the U.S. expanded at a modest pace in the last weeks of 2021 and that some districts observed a deceleration in the robust price increases from the previous months. The report was a nonevent for the market.
The 10-yr yield settled the session down two basis points to 1.73%, and the 2-yr yield decreased one basis point to 0.89%. The U.S. Dollar Index fell 0.7% to 94.95. WTI crude futures rose 1.7%, or $1.38, to $82.52/bbl amid bullish inventory data.
Separately, shares of Biogen (BIIB 225.34, -16.18, -6.7%) dropped nearly 7.0% after Medicare officials proposed to limit coverage of the company's Alzheimer's treatment to only those patients that participated in approved clinical trials.
Reviewing Wednesday's economic data:
Total CPI rose 0.5% month-over-month in December (Briefing.com consensus 0.4%) and was up 7.0% year-over-year. This represented the sharpest 12-month increase since June 1982. Core CPI, which excludes food and energy, rose 0.6% month-over-month (Briefing.com consensus 0.5%) and was up 5.5% year-over-year. This was the sharpest 12-month increase since February 1991.
The key takeaway from the report is that while some categories, like the energy index, showed a decrease in December, the continuation of the overall trend resulted in another acceleration of the year-over-year inflation rate at the headline and core levels.
The Treasury Budget showed a $21.3 bln deficit in December versus a $143.6 bln deficit in the same period a year ago. The budget data is not seasonally adjusted, so the December deficit cannot be compared to the November deficit of $191.3 bln. December marked the 27th consecutive month that the Treasury has seen a budget deficit.
The budget deficit over the last 12 months is $2.58 trln versus a deficit of $2.70 trln in November.
The weekly MBA Mortgage Applications Index increased 1.4% following a 5.6% decline in the prior week.
Weekly EIA crude oil inventories decreased by 4.55 mln barrels after decreasing by 2.14 mln barrels during the previous week.
Looking ahead, investors will receive the Producer Price Index for December and the weekly MBA Mortgage Applications Index on Thursday.
Dow Jones Industrial Average -0.1% YTD
S&P 500 -0.8% YTD
Nasdaq Composite -2.9% YTD
Russell 2000 -3.1% YTD
Crude futures settle higher (again)
12-Jan-22 15:30 ET
Dow -13.98 at 36238.04, Nasdaq +22.20 at 15175.65, S&P +7.48 at 4720.55
[BRIEFING.COM] The S&P 500 is up 0.2%, as is the Nasdaq (+0.2%) heading into the close.
One last look at the sectors shows materials (+0.7%) overtaking the information technology (+0.3%) and consumer discretionary (+0.5%) sectors for the top spot. The health care (-0.4%) and consumers staples (-0.2%) sectors trade slightly lower.
WTI crude futures settled higher by 1.7%, or $1.38, to $82.52/bbl amid bullish inventory data. The EIA reported its seventh straight week of an inventory draw.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 36252.02 +183.15 (0.51%)
Nasdaq 15153.45 +210.62 (1.41%)
SP 500 4713.04 +42.75 (0.92%)
10-yr Note 0/32 1.765
NYSE Adv 2392 Dec 849 Vol 852.8 mln
Nasdaq Adv 3048 Dec 1404 Vol 4.3 bln
Industry Watch
Strong: Energy, Information Technology, Materials
Weak: Utilities, Real Estate, Consumer Staples
Moving the Market
-- Stocks extend rebound bid following Fed Chair Powell's Senate confirmation hearing
-- Treasury yields calmed down
-- S&P 500 reclaims 50-day moving average (4678)
Stocks extend rebound bid following Powell's confirmation hearing
11-Jan-22 16:15 ET
Dow +183.15 at 36252.02, Nasdaq +210.62 at 15153.45, S&P +42.75 at 4713.04
[BRIEFING.COM] The S&P 500 gained 0.9% on Tuesday in a continuation of dip-buying efforts that started yesterday afternoon. The Nasdaq Composite (+1.4%) and Russell 2000 (+1.1%) outperformed with gains over 1.0% while the Dow Jones Industrial Average (+0.5%) rose more modestly.
The session started on a softer note as buyers held off conviction for Fed Chair Powell's Senate confirmation hearing. Mr. Powell didn't say anything particularly new, reaffirming that he thinks the Fed will end asset purchases in March, hike rates over the course of the year, and allow the balance sheet to run off later in the year.
The reaction in the Treasury market was perhaps more consequential for stocks. The 2-yr yield quickly backed down from 1.94% and settled unchanged at 0.90% while the 10-yr yield drifted lower by three basis points to 1.75%. The U.S. Dollar Index fell 0.4% to 95.62.
The S&P 500 information technology (+1.2%) led the market higher with the retracement in yields, but it was outdone by the 3% gain in the energy sector (+3.4%). Energy stocks followed oil prices ($81.14, +3.03, +3.9%) higher.
Conversely, the utilities (-0.9%), real estate (-0.2%), and consumer staples (-0.1%) sectors closed lower, as their defensive characteristics did not sit well with investors in the rebound-minded session.
From a technical perspective, the ability for the S&P 500 to reclaim its 50-day moving average (4678) was seen as another good development for dip-buying activity. This key technical level has shown to be a good buying opportunity since April 2020.
Looking at individual stocks, IBM (IBM 132.87, -2.16, -1.6%) was an exception in the tech sector after receiving a downgrade to Sell from Neutral at UBS. Illumina (ILMN 423.80, +61.52, +17.0%) jumped 17% on upbeat guidance while CVS Health (CVS 106.04, +0.98, +0.9%) set a 52-week high after raising its FY21 EPS guidance above consensus.
Tuesday's economic data was limited to the NFIB Small Business Optimism Index, which December increased to 98.9 in December from 98.4 in November.
Looking ahead, investors will receive the Consumer Price Index for December, the Fed's Beige Book for January, the Treasury Budget for December, and the weekly MBA Mortgage Applications Index on Wednesday.
Dow Jones Industrial Average -0.2% YTD
S&P 500 -1.1% YTD
Russell 2000 -2.3% YTD
Nasdaq Composite -3.1% YTD
Crude futures settle 4% higher
11-Jan-22 15:30 ET
Dow +192.81 at 36261.68, Nasdaq +203.98 at 15146.81, S&P +41.25 at 4711.54
[BRIEFING.COM] The S&P 500 is up 0.8% and is looking up to the Nasdaq (+1.3%) and Russell 2000 (+1.1%).
One last look at the sector performances shows energy in a league of its own with a 3.5% gain, largely due to a 4% gain in oil prices ($81.49, +3.26, +4.2%). The information technology sector (+1.2%) follows behind with a 1.2%, while the utilities (-0.8%) and consumer staples (-0.3%) sectors trade lower.
WTI crude futures settled higher by 3.9%, or $3.03, to $81.14/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 36068.87 -162.79 (-0.45%)
Nasdaq 14942.83 +6.93 (0.05%)
SP 500 4670.29 -6.74 (-0.14%)
10-yr Note 0/32 1.772
NYSE Adv 1174 Dec 2051 Vol 1.0 bln
Nasdaq Adv 1565 Dec 2943 Vol 5.2 bln
Industry Watch
Strong: Health Care
Weak: Industrials, Materials, Consumer Discretionary
Moving the Market
-- Stocks extend last week's losses amid de-risking efforts, but currently trade off session lows
-- 10-yr yield touches 1.81% before retracing to 1.77%
-- Deteriorating technical posture
Nasdaq completes comeback after 10-yr yield calms down
10-Jan-22 16:15 ET
Dow -162.79 at 36068.87, Nasdaq +6.93 at 14942.83, S&P -6.74 at 4670.29
[BRIEFING.COM] The S&P 500 (-0.1%) declined for the fifth straight session on Monday, but it only lost 0.1% after being down 2.0% intraday. The Nasdaq Composite (+0.1%) eked out a gain after being down 2.7% intraday, while the Dow Jones Industrial Average (-0.5%) and Russell 2000 (-0.4%) also closed well off session lows.
The intraday weakness was attributed to persisting concerns about rising rates and the Fed's agenda for policy normalization. The 10-yr yield hit 1.81% intraday before ending the session at 1.77%, or one basis point above Friday's settlement. The 2-yr yield rose three basis points to 0.90%.
Investors started to buy the dip soon after it looked like the 10-yr yield peaked for the day, finding a good excuse to buy into an oversold condition. The Nasdaq, for instance, was down 8.2% in less than five sessions and had fallen below its 200-day moving average (14690).
The S&P 500 couldn't reclaim its 50-day moving average (4675), though, as eight of its 11 sectors still closed lower. The industrials (-1.2%) and materials (-1.0%) sectors declined at least 1.0%, while the health care sector advanced 1.0%.
Evidently, cyclical stocks were lumped into the selling activity today. Besides downside momentum, risk sentiment in the space was pressured by a report from the Washington Post indicating that Senator Manchin (D-WV) is no longer interested in passing any legislation resembling the Build Back Better Act.
In the health care space, Pfizer (PFE 56.24, +0.52, +0.9%) told CNBC that a COVID-19 vaccine for the Omicron variant will be ready in March, and Moderna (MRNA 233.70, +19.84, +9.3%) provided an upbeat sales forecast for COVID-19 vaccines in 2022.
Separately, shares of Take-Two Interactive (TTWO 142.99, -21.61, -13.1%) dropped 13% on concerns that it overpaid for Zynga (ZYNG 8.44, +2.44, +40.7%). The cash-and-stock transaction at $9.86 per Zynga share gave the company a total enterprise value of approximately $12.7 billion.
The U.S. Dollar Index increased 0.3% to 95.97. WTI crude futures declined 1.1%, or $0.83, to $78.11/bbl.
Monday's economic data was limited to Wholesale Inventories, which increased 1.4% m/m in November (Briefing.com consensus 1.2%) following a revised 2.5% increase (from 1.2%) in October. Looking ahead, investors will receive the NFIB Small Business Optimism Index for December on Tuesday.
Dow Jones Industrial Average -0.7% YTD
S&P 500 -2.0% YTD
Russell 2000 -3.3% YTD
Nasdaq Composite -4.5% YTD
Crude futures settle lower
10-Jan-22 15:30 ET
Dow -306.35 at 35925.31, Nasdaq -111.31 at 14824.59, S&P -33.48 at 4643.55
[BRIEFING.COM] The S&P 500 is down 0.7% as the market continues to recoup losses.
One last look at the sectors shows industrials (-1.5%), materials (-1.4%), and consumer discretionary (-1.5%) down more than 1.0%, while the health care sector (+0.7%) outperforms in positive territory.
WTI crude futures settled lower by 1.1%, or $0.83, to $78.11/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 36231.66 -4.81 (-0.01%)
Nasdaq 14935.90 -144.96 (-0.96%)
SP 500 4677.03 -19.02 (-0.41%)
10-yr Note -4/32 1.764
NYSE Adv 1648 Dec 1571 Vol 903.0 mln
Nasdaq Adv 1898 Dec 2514 Vol 4.2 bln
Industry Watch
Strong: Energy, Financials, Utilities, Consumer Staples
Weak: Information Technology, Consumer Discretionary
Moving the Market
-- Growth stocks remained under pressure as 10-yr yield hit 1.80% intraday
-- Nonfarm payrolls increased by 199,000 (Briefing.com consensus 440,000), unemployment rate was 3.9% (Briefing.com consensus 4.1%), average hourly earnings rose 0.6% (Briefing.com consensus 0.4%)
-- Energy and financial stocks extended weekly gains
-- S&P 500 finds support at its 50-day moving average (4675)
Growth/value divide widens after employment report
07-Jan-22 16:20 ET
Dow -4.81 at 36231.66, Nasdaq -144.96 at 14935.90, S&P -19.02 at 4677.03
[BRIEFING.COM] The S&P 500 declined 0.4% on Friday, as money continued to flow away from growth stocks and into value stocks as the 10-yr yield hit 1.80% intraday. The latter was catalyzed by the December employment report, which depicted tight labor market conditions with a slowdown in hiring and strong wage gains.
The growth/value divide was loosely represented by the steep underperformance of the Nasdaq Composite (-1.0%) versus the Dow Jones Industrial Average (unch). More clearly, the Russell 3000 Growth Index fell 1.1% while the Russell 3000 Value Index rose 0.2%. The small-cap Russell 2000 declined 1.2%.
From a sector perspective, the S&P 500 information technology (-1.0%) and consumer discretionary (-1.7%) sectors underperformed in negative territory. Conversely, the energy (+1.5%) and financials (+1.2%) sectors rose more than 1.0%, extending their weekly gains to more than 10.0% and 5.0%, respectively.
Specifying the key employment figures, December nonfarm payrolls increased by just 199,000 (Briefing.com consensus 440,000), the unemployment rate remarkably declined to 3.9% (Briefing.com consensus 4.1%), and average hourly earnings rose 0.6% (Briefing.com consensus 0.4%).
The report reaffirmed expectations for the Fed to be more assertive in normalizing policy, even though jobs growth missed expectations and the labor force participation rate held steady at 61.9% (below pre-pandemic levels).
December still capped an impressive rebound for the labor market in 2021, and it appears to be approaching the Fed's goal of maximum employment. Furthermore, the Fed has suggested it's more attuned to keeping inflation pressures in check, and it wouldn't want the robust wage growth to exacerbate inflation pressures.
The 10-yr yield, as mentioned, hit 1.80% in the hours following the employment report, but ended the session at 1.77%, or four basis points above yesterday's settlement. The 2-yr yield decreased two basis points to 0.87%. The U.S. Dollar Index fell 0.6% to 95.75. WTI crude futures fell 0.6%, or $0.46, to $78.94/bbl.
For what it's worth, the S&P 500 closed just above its 50-day moving average (4675), which is a key technical level that has attracted dip-buying efforts in the past.
Reviewing Friday's economic data:
December payrolls growth was quite weak, but that shouldn't remain the case as we get past the Omicron hurdle. The unemployment rate fell to an astounding 3.9%, although the labor force participation rate did not improve. It held steady at 61.9%. Average hourly earnings were up a stronger than expected 0.6%.
December nonfarm payrolls increased by 199,000 (Briefing.com consensus 440,000). The 3-month average for total nonfarm payrolls decreased to 365,000 from 425,000 in November. November nonfarm payrolls revised to 249,000 from 210,000. October nonfarm payrolls revised to 648,000 from 546,000.
December private sector payrolls increased by 211,000 (Briefing.com consensus 420,000). November private sector payrolls revised to 270,000 from 235,000. October private sector payrolls revised to 714,000 from 628,000.
December unemployment rate was 3.9% (Briefing.com consensus 4.1%), versus 4.2% in November. Persons unemployed for 27 weeks or more accounted for 31.7% of the unemployed versus 32.5% in November. The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 7.3%, versus 7.7% in November.
December average hourly earnings increased 0.6% (Briefing.com consensus 0.4%) versus a 0.4% increase in November. Over the last 12 months, average hourly earnings have risen 4.7%, versus 5.1% for the 12 months ending in November.
The average workweek in December was 34.7 hours (Briefing.com consensus 34.8), versus a downwardly revised 34.7 hours (from 34.8 hours) in November. Manufacturing workweek decreased 0.1 hours to 40.3 hours. Factory overtime decreased 0.1 hours to 3.2 hours.
The labor force participation rate held steady at 61.9%.
The employment-population ratio increased to 59.5% from 59.3% in November.
The key takeaway from the report is that it shows the Fed is close to meeting its objective of maximum employment and that wage growth in a tight labor market risks feeding into more persistent inflation pressures that will need to be addressed with a tighter policy position.
Consumer credit increased by $39.9 bln in November. The prior month saw a downward revision to $16.1 bln from $16.9 bln.
The key takeaway from the report is that increase in consumer credit in November was the largest monthly increase December 2010.
Looking ahead, investors will receive Wholesale Inventories for November on Monday.
Dow Jones Industrial Average -0.3% YTD
S&P 500 -1.9% YTD
Russell 2000 -2.9% YTD
Nasdaq Composite -4.5% YTD
Crude futures settle lower but still end higher for the week
07-Jan-22 15:30 ET
Dow +69.13 at 36305.60, Nasdaq -124.46 at 14956.40, S&P -12.62 at 4683.43
[BRIEFING.COM] The S&P 500 is down 0.2% and is on track to end the week with a 1.7% decline.
One last look at the sector performances shows consumer discretionary (-1.6%) leading the decline as the only sector down more than 1.0% today. The energy (+1.4%), financials (+1.0%), and utilities (+1.0%) sectors are each up by at least 1.0%.
WTI crude futures settled lower by 0.6%, or $0.46, to $78.94/bbl. For the week, crude futures were up 5.0%.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 36236.47 -170.64 (-0.47%)
Nasdaq 15080.86 -19.31 (-0.13%)
SP 500 4696.05 -4.53 (-0.10%)
10-yr Note -24/32 1.729
NYSE Adv 1823 Dec 1453 Vol 912.7 mln
Nasdaq Adv 2155 Dec 2359 Vol 4.7 bln
Industry Watch
Strong: Energy, Financials, Industrials
Weak: Health Care, Materials, Utilities
Moving the Market
-- Lack of conviction drives underwhelming session as Treasury yields continue to edge higher
-- S&P 500 finds technical support at 50-day moving average (4672)
-- Growth stocks pare intraday losses while value stocks outperform
Large-cap indices underwhelm as tech sector remains weak
06-Jan-22 16:20 ET
Dow -170.64 at 36236.47, Nasdaq -19.31 at 15080.86, S&P -4.53 at 4696.05
[BRIEFING.COM] The stock market closed mixed on Thursday in an underwhelming effort following yesterday's retreat. The S&P 500 and Nasdaq Composite both declined 0.1%, and the Dow Jones Industrial Average declined 0.5%. The small-cap Russell 2000, however, advanced 0.6%.
There was a bit of a growth-stock scare in the morning, as the 10-yr yield hit 1.75% and the Nasdaq declined as much as 1.2% after the open. Fortunately, the 10-yr yield stabilized, and investors presumably felt comfortable enough to buy beleaguered growth stocks, especially after the S&P 500 bounced off its 50-day moving average (4672).
Buying conviction was kept in check, though, partly because of anxiety surrounding monetary policy normalization, the upwards path in interest rates, and the possibility for more selling in the days to come. There might also have been a wait-and-see mindset for the December employment report tomorrow.
Five of the 11 S&P 500 sectors ended the session in positive territory while six sectors closed lower. The materials (-1.2%), health care (-1.2%), and utilities (-1.1%) sectors declined more than 1.0% while the information technology sector declined 0.5%.
The heavily-weighted technology sector held back the S&P 500 in a meaningful way considering the Invesco S&P 500 Equal Weight Index (RSP 162.03, +0.36) gained 0.2%. The biggest gainers were found in the financials (+1.6%) and energy (+2.3%) sectors, which extended their weekly gains to 4% and 9%, respectively.
While growth stocks pared intraday losses, there was still there was a lingering preference for value stocks. This preference was better represented by the 0.3% gain in the Russell 3000 Index, versus the 0.2% decline in the Russell 3000 Growth Index.
Walgreens Boots Alliance (WBA 52.44, -1.56, -2.9%) was a value-oriented stock that underperformed despite reporting better-than-expected earnings results and raising its FY22 EPS guidance. Shares of the Dow component fell 3% after being up 0.9% intraday.
Recapping the moves in the Treasury market, the 10-yr yield settled three basis points higher at 1.73% while the 2-yr yield rose six basis points to 0.88% amid expectations for a more aggressive Fed. The U.S. Dollar Index increased 0.1% to 96.30. WTI crude futures rose 2.0%, or $1.58, to $79.40/bbl after briefly topping $80.00/bbl.
Reviewing Thursday's economic data:
Initial claims for the week ending January 1 increased by 7,000 to 207,000 (Briefing.com consensus 198,000) and continuing claims for the week ending December 25 increased by 36,000 to 1.754 million.
The key takeaway is that the latest data didn't disrupt the idea that the labor market is tight and that initial claims are running at pre-pandemic levels, which at the time were thought to be quite low.
The ISM Non-Manufacturing Index for December decreased to 62.0% (Briefing.com consensus 67.1%) from a record high 69.1% in November. The dividing line between expansion and contraction is 50.0%. The December reading marks the 19th straight month of growth for the services sector.
The key takeaway from the report is that it isn't surprising to see some softening following a record-high print and the arrival of the Omicron variant; however, the uptick in the prices index is a worrisome inflation point given the narrative that consumers will be engaging more with services companies in 2022 than they did in 2021.
The trade deficit for November widened to $80.2 billion (Briefing.com consensus -$69.4 billion) from $67.2 billion in October. Exports were $0.4 billion higher than October exports and imports were $13.4 billion more than October imports.
The key takeaway relates to the soft growth in exports, which reflects relatively weak demand abroad before the Omicron variant made its presence felt.
Factory orders for manufactured goods increased 1.6% m/m in November (Briefing.com consensus 1.2%) following an upwardly revised 1.2% increase (from 1.0%) in October. Shipments of manufactured goods jumped 0.7% after increasing 2.0% in October.
The key takeaway from the report is the lack of order growth for nondefense capital goods, excluding aircraft -- a proxy for business spending. That connotes a slowdown, but to be fair, it follows a string of monthly increases, so it appears at this juncture to be some natural slowing after an extended period of strength.
Looking ahead, investors will receive the Employment Situation Report for December and Consumer Credit for November on Friday.
Dow Jones Industrial Average -0.3% YTD
S&P 500 -1.5% YTD
Russell 2000 -1.7% YTD
Nasdaq Composite -3.6% YTD
Crude futures briefly top $80 per barrel
06-Jan-22 15:30 ET
Dow -107.43 at 36299.68, Nasdaq +22.05 at 15122.22, S&P +5.55 at 4706.13
[BRIEFING.COM] The S&P 500 is up just 0.1% as buyers struggle to follow through from early-mornin
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 36407.11 -392.54 (-1.07%)
Nasdaq 15100.17 -522.54 (-3.34%)
SP 500 4700.58 -92.96 (-1.94%)
10-yr Note 0/32 1.651
NYSE Adv 583 Dec 2682 Vol 1.0 bln
Nasdaq Adv 978 Dec 3456 Vol 5.0 bln
Industry Watch
Strong: Energy, Materials, Utilities, Consumer Staples
Weak: Real Estate, Information Technology, Communication Services, Consumer Discretionary
Moving the Market
-- Market sells off following release of FOMC Minutes, which highlighted a more aggressive stance on policy normalization
-- Growth stocks extended intraday losses while value stocks gave up intraday gains
-- 10-yr yield tops 1.70%
-- December ADP Employment Change report was stronger than expected
FOMC Minutes catalyzes sell-off in broader market
05-Jan-22 16:20 ET
Dow -392.54 at 36407.11, Nasdaq -522.54 at 15100.17, S&P -92.96 at 4700.58
[BRIEFING.COM] A mixed market turned into a weak market on Wednesday after the FOMC Minutes highlighted a more aggressive stance on policy normalization. The Nasdaq Composite and Russell 2000 both dropped 3.3%, the S&P 500 dropped 1.9%, and the Dow Jones Industrial Average dropped 1.1% after setting an all-time high in early action.
Briefly, the Minutes from the December meeting showed that participants thought it would be appropriate to reduce the size of the Fed's balance sheet at a faster pace than during the previous normalization period. Cited reasons included the fact that the balance sheet is bigger this time around and that the economic outlook is stronger.
What's more, the participants judged that the commencement of a balance sheet runoff would likely be closer to after the first rate hike, versus waiting nearly two years after the first hike in the last normalization episode.
Growth stocks extended intraday losses, as the 10-yr yield topped 1.70% in the wake of the report, while value stocks gave up intraday gains. All 11 S&P 500 sectors closed lower, with real estate (-3.2%), information technology (-3.1%), and communication services (-2.9%) each falling about 3.0%.
The consumer staples (-0.03%), utilities (-0.1%), energy (-0.1%), and materials (-0.1%) sectors closed fractionally lower amid increased selling pressure into the close.
The market might have been caught off guard by the Fed's hawkish tone regarding the balance sheet, but the readiness to hike rates shouldn't come as a surprise. According to the CME FedWatch Tool, the probability for a rate hike in March increased to 67.8% today, versus 59.7% yesterday and 27.1% one month ago.
Rate-hike expectations firmed up today after the release of a stronger-than-expected December ADP Employment Change report, which estimated an addition of 807,000 jobs to private sector payrolls last month (Briefing.com consensus 425,000).
The 2-yr yield, which tracks expectations for the fed funds rate, rose seven basis points to 0.83%. The 10-yr yield settled the session four basis points higher at 1.71%, feeding into expectations for a run-up to 2.00%. The U.S. Dollar Index decreased 0.1% to 96.20. WTI crude futures rose 1.1%, or $0.82, to $77.82/bbl.
All in all, the balance-sheet commentary, coupled with higher interest rates, was presumably an excuse for investors to double down on the growth-stock selling and take profits in the value stocks.
Reviewing Wednesday's economic data:
ADP estimated that 807,000 jobs were added to private sector payrolls in December (Briefing.com consensus 425,000), up from a downwardly revised 505,000 (from 534,000) in November.
The preliminary IHS Markit Services PMI for December decreased to 57.6 from 58.0 in the final reading for November.
The MBA Mortgage Applications Index decreased 5.6% on a weekly basis.
Crude oil inventories had a weekly draw of 2.144 mln barrels, which was the EIA's sixth draw in six weeks.
Looking ahead, investors will receive the ISM Non-Manufacturing Index for December, the weekly Initial and Continuing Claims report, the Trade Balance for November, and Factory Orders for November on Thursday.
Dow Jones Industrial Average +0.2% YTD
S&P 500 -1.4% YTD
Russell 2000 -2.3% YTD
Nasdaq Composite -3.5% YTD
Crude futures settle higher while stocks struggle
05-Jan-22 15:30 ET
Dow -274.74 at 36524.91, Nasdaq -459.72 at 15162.99, S&P -74.30 at 4719.24
[BRIEFING.COM] The S&P 500 is trading at session lows with a 1.5% decline amid losses in seven of its 11 sectors.
The real estate sector (-3.1%) is the weakest performer, but the biggest drags are the information technology (-2.6%), communication services (-2.2%), and consumer discretionary (-2.3%) sectors. The energy (+0.2%), materials (+0.3%), consumer staples (+0.2%), and utilities (+0.2%) sectors trade higher.
WTI crude futures settled higher by 1.1%, or $0.82, to $77.82/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 36799.65 +214.59 (0.59%)
Nasdaq 15622.71 -210.08 (-1.33%)
SP 500 4793.54 -3.02 (-0.06%)
10-yr Note -2/32 1.648
NYSE Adv 1670 Dec 1614 Vol 950.3 mln
Nasdaq Adv 1857 Dec 2637 Vol 5.0 bln
Industry Watch
Strong: Financials, Energy, Industrials, Materials
Weak: Information Technology, Health Care, Consumer Discretionary
Moving the Market
-- Dow sets intraday and closing record highs amid strength in the value/cyclical stocks
-- Growth stocks fall amid continued rise in long-term rates
-- December ISM Manufacturing Index showed ease in inflation pressures
Value stocks propel Dow to record highs
04-Jan-22 16:20 ET
Dow +214.59 at 36799.65, Nasdaq -210.08 at 15622.71, S&P -3.02 at 4793.54
[BRIEFING.COM] The S&P 500 declined 0.1% on Tuesday in a mixed session, which was better represented by the sharp divergence between the Dow Jones Industrial Average (+0.6%) and Nasdaq Composite (-1.3%). Both the S&P 500 and Dow set intraday record highs while the Dow also set a closing record high. The Russell 2000 declined 0.2%.
Today's session was reminiscent of the classic reopening trade, except that it's 2022 and daily COVID-19 cases in the U.S. topped one million yesterday. Value/cyclical stocks outperformed at the expense of growth stocks, the Treasury yield curve steepened, and WTI crude futures settled at $77.00 per barrel (+$1.00, +1.3%).
More specifically, the S&P 500 energy (+3.5%), financials (+2.6%), industrials (+2.0%), and materials (+1.3%) sectors rose between 1-4%. The 10-yr yield increased four basis points to 1.67% while the 2-yr yield decreased two basis points to 0.76%. The U.S. Dollar Index increased 0.1% to 96.28.
Notably, the 10-yr yield has now risen 16 basis points start the year, increasing the probability that 2022 will be marked by a higher-interest rate environment, as forecasted by many analysts on Wall Street. This view weighed on the highly-valued growth stocks, albeit in a delayed reaction since the Nasdaq was up 0.1% in early action.
The information technology (-1.1%), health care (-1.4%), and consumer discretionary (-0.7%) sectors struggled amid weakness in the growth stocks. The Vanguard Mega Cap Growth ETF (MGK 260.20, -3.27) fell 1.2%. The iShares Biotechnology ETF (IBB 148.29, -4.08) fell 2.7%. The ARK Innovation ETF (ARKK 92.69, -4.30) fell 4.4%.
Selling interest in the growth stocks accelerated soon after the release of the December ISM Manufacturing Index at 10:00 a.m. ET. While the index decelerated more than expected to 58.7% (Briefing.com consensus 60.3%) from 61.1% in November, it still denoted an expanding manufacturing sector.
More encouragingly, the Prices Index in the ISM report showed a noticeable ease in inflation pressures. The Omicron variant could pose risks this month, but the inference from today (and prior weeks) is that market sees the economic impact from the variant as short-term.
Growth stocks eventually pared losses in the afternoon, helping the market end the Santa Claus rally period on a better note.
Reviewing Tuesday's economic data:
The December ISM Manufacturing Index checked in at 58.7% (Briefing.com consensus 60.3%) versus 61.1% in November. A number above 50.0% is indicative of expansion. December marked the 19th straight month of expansion for the manufacturing sector, albeit at a slower pace.
The key takeaway from the report is the recognition that price pressures softened some, presumably due to improved supply chain conditions; however, supply concerns (and inflation worries) aren't going to fade away knowing that the Omicron variant is driving global staffing challenges.
Job openings decreased to 10.562 million in November from a revised 11.091 million (from 11.033 million) in October.
Looking ahead, investors will receive the ADP Employment Change report for December, the FOMC Minutes from the December meeting, the preliminary IHS Markit Services PMI for December, and the weekly MBA Mortgage Applications Index on Wednesday.
Dow Jones Industrial Average +1.3% YTD
Russell 2000 +1.1% YTD
S&P 500 +0.6% YTD
Nasdaq Composite -0.1% YTD
Crude futures settle at $77 per barrel amid expected OPEC+ decision
04-Jan-22 15:30 ET
Dow +280.04 at 36865.10, Nasdaq -203.38 at 15629.41, S&P +2.51 at 4799.07
[BRIEFING.COM] The S&P 500 is trading at its flat line and is vying for a record close despite the weakness from the mega-caps.
One last look at the sectors shows energy (+3.5%), financials (+2.7%), industrials (+2.0%), and materials (+1.4%) leading the effort with nice gains, while the information technology (-1.1%), health care (-1.2%), and consumer discretionary (-0.6%) sectors underperform in negative territory.
WTI crude futures settled higher by 1.3%, or $1.00, to $77.00 per barrel. On a related note, OPEC+ reaffirmed an agreement to increase output by 400,000 barrels/day in February, which was expected.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 36585.06 +246.76 (0.68%)
Nasdaq 15832.79 +187.83 (1.20%)
SP 500 4796.56 +30.38 (0.64%)
10-yr Note -11/32 1.640
NYSE Adv 1928 Dec 1418 Vol 845.0 mln
Nasdaq Adv 3290 Dec 1418 Vol 4.3 bln
Industry Watch
Strong: Energy, Consumer Discretionary, Financials
Weak: Health Care, Consumer Staples, Utilities, Real Estate
Moving the Market
-- Apple (AAPL) hits $3 trillion market capitalization
-- Tesla (TSLA) up 12% after reporting record Q4 deliveries
-- Treasury yield rise noticeably
S&P 500 and Dow close at record highs to begin 2022
03-Jan-22 16:20 ET
Dow +246.76 at 36585.06, Nasdaq +187.83 at 15832.79, S&P +30.38 at 4796.56
[BRIEFING.COM] The major indices had a great start to 2022 on Monday, featuring record closes in the S&P 500 (+0.6%) and Dow Jones Industrial Average (+0.7%). The Nasdaq Composite (+1.2%) and Russell 2000 (+1.2%) tied for the lead with 1.2% gains.
The outperformance of the Nasdaq was attributed to a 13.5% gain in Tesla (TSLA 1199.78, +143.00, +13.5%), which reported record Q4 deliveries, and sizable gains in Apple (AAPL 182.01, +4.44, +2.5%), Amazon.com (AMZN 3408.09, +73.75, +2.2%), and NVIDIA (NVDA 301.21, +7.10, +2.4%).
Apple became the first U.S. company to reach a $3.0 trillion market capitalization while Amazon and the small-caps may have adhered to the January effect. The latter is a view that beaten-down stocks outperform to begin the year with the conclusion of tax-loss selling pressure.
The S&P 500 consumer discretionary sector, which is home to TSLA and AMZN, advanced 2.8%, but it was outdone by the energy sector (+3.1%) amid higher oil prices ($76.05/bbl, +0.76, +1.0%). The financials (+1.2%) and information technology (+1.2%) sectors followed suit, with the former keying off a big jump in longer-dated Treasury yields.
The mega-caps, to emphasize, made a huge difference for the large-cap indices since the S&P 500 Equal Weight Index increased just 0.1% and six of the 11 S&P 500 sectors closed lower. The materials (-1.4%), health care (-1.0%), and real estate (-1.0%) sectors each declined by at least 1.0%.
Shares of Pfizer (PFE 56.65, -2.40, -4.1%) and BioNTech (BNTX 231.85, -25.95, -10.1%) declined noticeably amid an expected decision from the FDA, which approved their COVID-19 vaccine for kids aged 12-15. The FDA also shortened the time between the second dose and booster dose to at least five months (down from six months).
In the Treasury market, the 10-yr yield rose 12 basis points to 1.63%, with selling interest influenced by the positive showing in the stock market and potentially due to an improving perspective on the economy. The 2-yr yield rose six basis points to 0.79%. The U.S. Dollar Index increased 0.3% to 96.21.
Reviewing Monday's economic data:
Total construction spending increased 0.4% month-over-month in November (Briefing.com consensus +0.6%) following an upwardly revised 0.4% increase (from 0.2%) in October. Total private construction increased 0.6% month-over-month while total public construction spending decreased 0.2%. On a year-over-year basis, total construction spending was up 9.3%.
The key takeaway from the report is the strength seen in new single-family construction, which is a reflection of the persistently strong housing demand amid a scarcity of supply in the existing home market.
The preliminary December IHS Markit Manufacturing PMI decreased to 57.7 from a revised final reading of 58.3 (from 57.8) in November.
Looking ahead, investors will receive the ISM Manufacturing Index for December and the JOLTS - Job Openings report for November on Tuesday.
Nasdaq Composite +1.2% YTD
Russell 2000 +1.2% YTD
Dow Jones Industrial Average +0.7% YTD
S&P 500 +0.6% YTD
Crude futures settle above $76 per barrel
03-Jan-22 15:30 ET
Dow +215.09 at 36553.39, Nasdaq +177.05 at 15822.01, S&P +26.82 at 4793.00
[BRIEFING.COM] The S&P 500 continues to trade higher by 0.6% with 30 minutes remaining in the session.
One last look at the sectors shows energy (+3.0%) and consumer discretionary (+2.5%) up by at least 2.5%, while the real estate (-1.3%), materials (-1.2%), health care (-1.1%), and utilities (-1.1%) sectors are each down more than 1.0%.
WTI crude futures settled higher by $0.76 (+1.0%) to $76.05/barrel.
Market Snapshot
Dow 36338.30 -59.78 (-0.16%)
Nasdaq 15644.96 -96.59 (-0.61%)
SP 500 4766.18 -12.55 (-0.26%)
10-yr Note 0/32 1.514
NYSE Adv 1990 Dec 1333 Vol 702.5 mln
Nasdaq Adv 2141 Dec 2535 Vol 3.3 bln
Industry Watch
Strong: Consumer Staples, Materials, Industrials
Weak: Communication Services, Information Technology, Health Care
Moving the Market
-- Market slips into the close, led by the Nasdaq amid weakness in the mega-caps
-- Year-end rebalancing activity
-- Broader market held its ground
Mega-caps lead market lower to wrap up a record 2021
31-Dec-21 16:20 ET
Dow -59.78 at 36338.30, Nasdaq -96.59 at 15644.96, S&P -12.55 at 4766.18
[BRIEFING.COM] The major indices declined modestly on Friday amid some slippage into the close, but still wrapped up 2021 with double-digit percentage gains. The Nasdaq Composite fell 0.6% amid weakness in the mega-caps, while the S&P 500 (-0.3%), Dow Jones Industrial Average (-0.2%), and Russell 2000 (-0.2%) closed slightly lower.
There weren't any specific catalysts today, but the underperformance of the mega-caps suggested there was some year-end rebalancing activity in the mix. Some of that activity likely happened into the close, as the relatively weak finish coincided with an increase in trading volume.
Six of the 11 S&P 500 sectors closed higher while five closed lower. The consumer staples sector (+0.7%) was the only sector that gained more than 0.5%, while the communication services sector (-1.2%) declined more than 1.0%.
Illustrating the year-end activity, the Vanguard Mega Cap Growth ETF (MGK 260.76, -1.55) declined 0.6% today and ended the year with a 28.0% gain -- roughly equal to the 27.6% gain in the Invesco S&P 500 Equal Weight ETF (RSP 162.75, unch).
Pfizer (PFE 59.05, +0.65, +1.1%) outperformed amid news that its oral antiviral for COVID-19 was approved by UK regulators for people with mild-to-moderate disease and that Israel will offer a fourth coronavirus vaccine to nursing home residents.
The Dow Jones Transportation Average (+0.6%) was another an area of relative strength, particularly the non-airline components like Norfolk Southern (NSC 297.71, +2.98, +1.0%) and CSX (CSX 37.60, +0.28, +0.8%), which set record highs.
The Treasury market had an uneventful, abbreviated session. The 2-yr yield decreased one basis point to 0.73% (+61 bps in 2021), and the 10-yr yield was unchanged at 1.51% (+59 bps in 2021). The U.S. Dollar Index decreased 0.4% to 95.63. WTI crude futures fell 2.2%, or $1.70, to $75.15/bbl (+55.7% in 2021).
Investors did not receive any economic data on Friday. Looking ahead, investors will receive Construction Spending for November on Monday.
S&P 500 +26.9% YTD
Nasdaq Composite +21.4% YTD
Dow Jones Industrial Average +18.7% YTD
Russell 2000 +13.8% YTD
Crude futures end year at $75 per barrel
31-Dec-21 15:30 ET
Dow +66.70 at 36464.78, Nasdaq -37.27 at 15704.28, S&P +4.37 at 4783.10
[BRIEFING.COM] The S&P 500 is up 0.1% while the Dow (+0.2%) and Russell 2000 (+0.2%) retain a small advantage.
One last look at the sectors before the year ends shows real estate (+0.7%) and consumer staples (+0.7%) tied for the lead, while the communication services (-0.7%) and information technology (-0.1%) sectors trade lower.
WTI crude futures settled lower by 2.2%, or $1.70, to $75.15/bbl, ending the year with a 55.7% gain.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 36398.08 -90.55 (-0.25%)
Nasdaq 15741.55 -24.65 (-0.16%)
SP 500 4778.73 -14.33 (-0.30%)
10-yr Note +4/32 1.511
NYSE Adv 1843 Dec 1444 Vol 638.3 mln
Nasdaq Adv 2750 Dec 1878 Vol 3.7 bln
Industry Watch
Strong: Financials, Energy, Health Care
Weak: Consumer Staples, Utilities
Moving the Market
-- S&P 500 and Dow set record highs with modest gains
-- Positive bias persists amid seasonal factors, thin trading volume, and lack of market-moving news
Market fumbles gains into the close
30-Dec-21 16:20 ET
Dow -90.55 at 36398.08, Nasdaq -24.65 at 15741.55, S&P -14.33 at 4778.73
[BRIEFING.COM] The S&P 500 (-0.3%) and Dow Jones Industrial Average (-0.3%) set intraday record highs early in Thursday's session, but they struggled to build on those gains and closed slower amid increased selling interest into the close. The Nasdaq Composite (-0.2%) and Russell 2000 (-0.02%) also fumbled gains and closed slightly lower.
The record-setting start was a carryover from yesterday amid seasonal factors, thin trading conditions, and a lack of specific catalysts. The gains were modest and lacked conviction, as the S&P 500 sectors wavered within 0.5% of their flat lines for most of the day.
It wasn't until the last 30 minutes of action that sellers gained control. Some participants, who are taking tomorrow off for New Year's Eve, might have taken profits while others would point to the view that the market was overbought and due for a breather.
Seven of the 11 S&P 500 sectors closed lower, including information technology (-0.7%) and energy (-0.7%) as laggards. The real estate (+0.4%), utilities (+0.3%), health care (+0.2%), and communication services (+0.1%) sectors closed higher.
Buying conviction might have also been restrained by ongoing headwinds attributed to the Omicron variant.
Specifically, Micron (MU 93.89, -2.28, -2.4%) warned of potential delays because of the lockdown in the Chinese city of Xi'an. The CDC upped its travel notice on cruise lines to Level 4, advising people to "avoid cruise travel, regardless of vaccination status." JetBlue (JLBU 14.24, -0.14, -1.0%) reportedly reduced its flight schedule next month in anticipation of staffing shortages.
On the bright side, vaccine news remained encouraging. Johnson & Johnson (JNJ 172.31, +0.76, +0.4%) said data demonstrated its booster shot was 85% effective against hospitalization in South Africa when the Omicron variant was dominant. The FDA is expected to expand eligibility for Pfizer's (PFE 58.40, +0.82, +1.4%) booster shot to 12- to 15-year-olds on Monday, according to The New York Times.
Separately, Biogen (BIIB 240.00, -18.31, -7.1%) dropped 7% after Samsung Group denied it was in talks to acquire the company.
U.S. Treasuries were on the defensive throughout the day, leaving yields lower. The 2-yr yield decreased one basis point to 0.74%, and the 10-yr yield decreased three basis points to 1.52%. The U.S. Dollar Index increased 0.1% to 95.98. WTI crude futures increased 0.4%, or $0.28, to $76.85/bbl.
Reviewing Thursday's economic data:
Initial jobless claims for the week ending December 25 decreased by 8,000 to 198,000 (Briefing.com consensus 190,000) while continuing claims for the week ending December 18 decreased by 140,000 to 1.716 million.
The key takeaway from the report is the recognition that the four-week moving average for initial claims (199,250) is the lowest it has been since October 25, 1969, which reflects the tightness of the labor market.
The Chicago PMI increased to 63.1 in December (Briefing.com consensus 61.8) from 61.8 in November.
There is no economic data scheduled for Friday, which will be a full day of trading for the stock market.
S&P 500 +27.2% YTD
Nasdaq Composite +22.1% YTD
Dow Jones Industrial Average +18.9% YTD
Russell 2000 +13.9% YTD
WTI crude futures settle higher
30-Dec-21 15:30 ET
Dow +14.05 at 36502.68, Nasdaq +48.47 at 15814.67, S&P +2.77 at 4795.83
[BRIEFING.COM] The S&P 500 is up 0.1% and is trying to close at a record high.
One last look at the sectors shows real estate (+0.6%) and health care (+0.4%) outperforming with modest gains, while the energy sector (-0.6%) underperforms with a 0.6% gain.
WTI crude futures settled higher by 0.4%, or $0.28, to $76.85/bbl. In related news, Reuters reported that OPEC+ is aiming to keep its current production schedule at the Jan. 4 meeting.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 36488.63 +90.42 (0.25%)
Nasdaq 15766.20 -15.51 (-0.10%)
SP 500 4793.06 +6.71 (0.14%)
10-yr Note -6/32 1.549
NYSE Adv 1831 Dec 1476 Vol 608.8 mln
Nasdaq Adv 1938 Dec 2711 Vol 3.7 bln
Industry Watch
Strong: Health Care, Real Estate, Utilities
Weak: Energy, Communication Services, Financials
Moving the Market
-- S&P 500 and Dow close at record highs in calm session
-- Below-average volume, lack of conviction
-- Treasury yield curve steepened, but bank stocks barely reacted
S&P 500 and Dow close at record highs
29-Dec-21 16:20 ET
Dow +90.42 at 36488.63, Nasdaq -15.51 at 15766.20, S&P +6.71 at 4793.06
[BRIEFING.COM] The major indices closed little changed on Wednesday, but the S&P 500 (+0.1%) and Dow Jones Industrial Average (+0.3%) did set closing record highs. The Russell 2000 increased 0.1% while the Nasdaq Composite decreased 0.1%. The Dow also set an intraday record high and extended its winning streak to six sessions.
Trading conditions remained thin, particularly at the NYSE, ahead of the new year festivities at the end of the week. That observation, plus the lack of market-moving news, suggested that there wasn't a lot of conviction in today's trading activities.
Eight of the 11 S&P 500 sectors closed higher, yet no sector rose more than 0.7%. The health care (+0.6%) and real estate (+0.6%) sectors tied for the lead, while the communication services (-0.3%), energy (-0.6%), and financials (-0.1%) sectors finished in negative territory.
The lack of conviction was further manifested in bank stocks showing little interest to the steepening activity in the Treasury market. Likewise, the energy sector closed lower despite an increase in oil prices ($76.57/bbl, +0.56, +0.7%). The SPDR S&P Bank ETF (KBE 54.84, +0.06) increased just 0.1%.
The 10-yr yield rose six basis points to 1.54% while the 2-yr yield was unchanged at 0.75%. The U.S. Dollar Index decreased 0.3% to 95.91.
Growth stocks, which were purportedly trading lower intraday because of the higher rates, recouped losses as the session progressed. The Russell 1000 Growth Index (+0.04%) closed fractionally higher after being down 0.5% intraday.
The 9.5% gain in Biogen (BIIB 258.31, +22.32, +9.5%), however, was linked to a specific catalyst. The Korea Economic Daily reported that the company in in talks to be acquired by Samsung Group for more than $40 billion.
Airlines stocks faced renewed selling interest after Delta (DAL 39.16, -0.47, -1.2%) and Alaska Airlines (ALK 52.14, -0.76, -1.4%) canceled/delayed hundreds more flights due to weather and Omicron issues. The U.S. Global Jets ETF (JETS 21.14, -0.32) declined 1.5%.
Reviewing Wednesday's economic data:
The Advance International Trade in Goods report for November showed a deficit of $97.8 billion, up $14.6 billion from October. The Advance report for Retail Inventories for November increased 2.0%, while the Advance report for Wholesale Inventories for November increased 1.2%.
Pending home sales fell 2.2% m/m in November (Briefing.com consensus +0.6%) following a 7.5% jump in October.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report on Thursday.
S&P 500 +27.6% YTD
Nasdaq Composite +22.3% YTD
Dow Jones Industrial Average +19.2% YTD
Russell 2000 +13.9% YTD
Crude futures settle higher, but energy stocks underperform
29-Dec-21 15:30 ET
Dow +148.87 at 36547.08, Nasdaq -20.87 at 15760.84, S&P +11.17 at 4797.52
[BRIEFING.COM] The S&P 500 is up 0.2% and is vying for a record close.
Nine sectors are supporting the effort, led by health care (+0.7%) and real estate (+0.7%) with 0.7% gains. The energy (-0.3%) and communication services (-0.3%) sectors are the two holdouts.
WTI crude futures settled higher by 0.7%, or $0.56, to $76.57/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 36398.21 +95.83 (0.26%)
Nasdaq 15781.71 -89.54 (-0.56%)
SP 500 4786.35 -4.84 (-0.10%)
10-yr Note +2/32 1.461
NYSE Adv 1534 Dec 1718 Vol 568.4 mln
Nasdaq Adv 1582 Dec 2993 Vol 3.6 bln
Industry Watch
Strong: Utilities, Materials, Industrials
Weak: Information Technology, Health Care
Moving the Market
-- S&P 500 sets record high above the 4800 level but closes lower
-- CDC shortens the recommended isolation time for asymptomatic people with COVID-19 to five days from 10 days
-- Relative weakness in the information technology sector
-- Low volume at the NYSE
S&P 500 tags record high, then closes lower
28-Dec-21 16:20 ET
Dow +95.83 at 36398.21, Nasdaq -89.54 at 15781.71, S&P -4.84 at 4786.35
[BRIEFING.COM] The S&P 500 decreased 0.1% on Tuesday after setting an intraday record high above the 4800 level early in the day. The Nasdaq Composite (-0.6%) and Russell 2000 (-0.7%) underperformed in negative territory, while the Dow Jones Industrial Average (+0.3%) rose modestly.
The session started with a carryover of positive momentum, with some attributing updated COVID-19 guidance from the CDC as a supportive factor. The public health agency shortened the recommended isolation time for asymptomatic people with COVID-19 to five days from 10 days.
Seasonal factors also lent support, but the market appeared to be running on tired legs. Entering the session, the S&P 500 was up 4.9% over the prior four sessions while the Nasdaq Composite and Russell 2000 were up nearly 6.0% over the same period. Selling interest was kept in check, though, on this low-volume day.
Seven of the 11 S&P 500 sectors closed in positive territory with the utilities sector (+0.9%) claiming the top spot with a 0.9% gain. The information technology sector (-0.6%), which led the market higher yesterday, slipped into the laggard position with a 0.6% decline.
The technology sector was pressured by losses in Apple (AAPL 179.20, -1.13, -0.6%), Microsoft (MSFT 341.35, -1.13, -0.3%), and the semiconductor stocks. The Philadelphia Semiconductor Index fell 1.2%.
Travel stocks saw some relief following the updated CDC guidance on the hope that there will be less Omicron-related disruptions. On a related note, Booking Holdings (BKNG 2386.91, -7.60, -0.3%) CEO told CNBC that he thinks the travel recovery will continue in 2022, even with the Omicron variant.
Value stocks in general fared better than their growth-stock peers. The Russell 1000 Value Index increased 0.2% while the Russell 1000 Growth Index fell 0.5%.
In the Treasury market, the 2-yr yield rose five basis points to 0.75% while the 10-yr yield settled unchanged at 1.48% after trading at 1.46% intraday. The U.S. Dollar Index increased 0.1% to 96.14. WTI crude futures increased 0.6%, or $0.45, to $76.01/bbl.
Reviewing Tuesday's economic data:
The S&P Case-Shiller Home Price Index increased 18.4% yr/yr in October (Briefing.com consensus 18.7%) following a 19.1% yr/yr increase in September.
The FHFA Housing Price Index increased 1.1% m/m in October following a 0.9% increase in September.
Looking ahead, investors will receive Pending Home Sales for November, the weekly MBA Mortgage Applications Index, and the Advance November reports for Intl Trade in Goods, Retail Inventories, and Wholesale Inventories on Wednesday.
S&P 500 +27.4% YTD
Nasdaq Composite +22.5% YTD
Dow Jones Industrial Average +18.9% YTD
Russell 2000 +13.8% YTD
Crude futures settle at $76 per barrel
28-Dec-21 15:30 ET
Dow +112.21 at 36414.59, Nasdaq -66.39 at 15804.86, S&P -2.18 at 4789.01
[BRIEFING.COM] The S&P 500 is trading flat while the Russell 2000 trades lower by 0.4%.
One last look at the sectors shows utilities (+0.7%), industrials (+0.5%), and materials (+0.5%) outperforming with modest gains. Conversely, the information technology (-0.5%), health care (-0.3%), and communication services (-0.3%) sectors are trading lower.
WTI crude futures settled higher by 0.6%, or $0.45, to $76.01/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 36302.38 +351.82 (0.98%)
Nasdaq 15871.25 +217.89 (1.39%)
SP 500 4791.19 +65.40 (1.38%)
10-yr Note +1/32 1.485
NYSE Adv 2204 Dec 1068 Vol 615.6 mln
Nasdaq Adv 2373 Dec 2279 Vol 3.7 bln
Industry Watch
Strong: Information Technology, Energy, Real Estate
Weak: Utilities
Moving the Market
-- S&P 500 sets intraday and closing record highs
-- Leadership from the mega-caps
-- Travel stocks underperformed amid Omicron-related disruptions
S&P 500 extends rally to record highs
27-Dec-21 16:15 ET
Dow +351.82 at 36302.38, Nasdaq +217.89 at 15871.25, S&P +65.40 at 4791.19
[BRIEFING.COM] The S&P 500 rose 1.4% on Monday, setting intraday and closing record highs in a steady advance. The Nasdaq Composite (+1.4%) kept pace, followed by the Dow Jones Industrial Average (+1.0%) and Russell 2000 (+0.9%) with solid gains.
The market didn't seem drawn to any specific piece of news, nor was there any economic data to influence investing decisions. Instead, the market appeared to benefit from a continued willingness among investors to buy equities when momentum remained in their favor, particularly at a seasonally-favorable time of the year.
All 11 S&P 500 sectors closed higher, led by the information technology (+2.2%), energy (+2.2%), and real estate (+2.0%) sectors with gains of at least 2.0%. The utilities sector underperformed on a relative basis with a 0.5% gain.
Retail investors might have had a greater role today based on the light trading volume at the NYSE and the huge gains in market favorites like Apple (AAPL 180.33, +4.05, +2.3%), Microsoft (MSFT 342.45, +7.76, +2.3%), Meta Platforms (FB 346.18, +10.94, +3.3%), Tesla (TSLA 1093.94, +26.94, +2.5%), and NVIDIA (NVDA 309.45, +13.05, +4.4%).
The mega-cap growth stocks did the heavy lifting while small-caps and micro-caps went along for the ride, as did value stocks. The Russell 1000 Growth Index rose 1.5%, versus a 1.1% gain in the Russell 1000 Value Index.
Looking at industry news, travel stocks struggled amid reports highlighting the disruptions that airlines and cruise lines have faced because of Omicron-related issues. Retail stocks benefited from Mastercard SpendingPulse data indicating that retail sales grew 8.5% year-over-year this holiday season (Nov. 1-Dec. 24).
U.S. Treasuries settled mixed with a trace of curve-flattening activity. The 2-yr yield increased one basis point to 0.70% while the 10-yr yield decreased one basis point to 1.48%. The U.S. Dollar Index increased 0.1% to 96.08. WTI crude futures rose 2.3%, or $1.71, to $75.56/bbl.
Investors did not receive any economic data on Monday. Looking ahead, the FHFA Housing Price Index for October and the S&P Case-Shiller Home Price Index for October will be released on Tuesday.
S&P 500 +27.6% YTD
Nasdaq Composite +23.1% YTD
Dow Jones Industrial Average +18.6% YTD
Russell 2000 +14.5% YTD
Crude futures settle above $75 per barrel
27-Dec-21 15:30 ET
Dow +282.65 at 36233.21, Nasdaq +190.01 at 15843.37, S&P +55.43 at 4781.22
[BRIEFING.COM] The S&P 500 is up 1.2% while the Russell 2000 is up 0.5%.
One last look at the sectors shows energy (+2.0%), information technology (+1.9%), real estate (+1.4%), and materials (+1.3%) up between 1-2% while the utilities sector is up just 0.3%.
WTI crude futures settled higher by 2.3%, or $1.71, to $75.56/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35950.56 +196.67 (0.55%)
Nasdaq 15653.36 +131.48 (0.85%)
SP 500 4725.79 +29.23 (0.62%)
10-yr Note -26/32 1.499
NYSE Adv 2223 Dec 1060 Vol 647.7 mln
Nasdaq Adv 3181 Dec 1409 Vol 3.9 bln
Industry Watch
Strong: Consumer Discretionary, Industrials, Materials
Weak: Real Estate, Utilities
Moving the Market
-- S&P 500 closes at record high as the rebound momentum persisted
-- Decent economic data, although PCE Prices for November remained hot
-- Relatively light trading volume at the NYSE in front of the Christmas weekend
S&P 500 closes at record high in front of Christmas weekend
23-Dec-21 16:15 ET
Dow +196.67 at 35950.56, Nasdaq +131.48 at 15653.36, S&P +29.23 at 4725.79
[BRIEFING.COM] The S&P 500 rose 0.6% on Thursday, wrapping up the Christmas week at a closing record high amid buy-the-dip momentum. The Dow Jones Industrial Average also gained 0.6% while the Nasdaq Composite (+0.9%) and Russell 2000 (+0.9%) both gained 0.9%.
Most of the gains were registered shortly after the open, and the major indices slowly drifted slowly higher the rest of the session. There was a slight hiccup into the close, which might have been a byproduct of reduced trading volume at the NYSE and efforts to take some money off the table in front of a three-day weekend.
Nine of the 11 S&P 500 sectors closed higher with consumer discretionary (+1.2%), industrials (+1.2%), and materials (+1.0%) each rising at least 1.0%. The real estate (-0.4%) and utilities (-0.03%) sectors closed slightly lower.
Today's economic data was decent: weekly initial claims, new home sales for November, durable goods orders for November, and the final December reading for the University of Michigan Index of Consumer Sentiment were each better than expected. Personal income and spending for November increased modestly.
One of the wrinkles in the data was a hotter-than-expected core PCE Price Index, which increased 0.5% m/m in November (Briefing.com consensus 0.4%) and was up 4.7% yr/yr. The PCE Price Index increased 0.6% m/m, leaving it up 5.7% yr/yr.
In COVID news, the FDA issued an emergency use authorization for Merck’s (MRK 75.73, -0.43, -0.6%) oral antiviral for the treatment of mild-to-moderate coronavirus disease for adults 18 and older. Research continued to suggest that the Omicron variant is milder than the Delta variant despite being more contagious.
The Treasury market softened up, driving yields higher, which was in-line with typical trading behavior when equities rally and the economic data leans positive. The 2-yr yield increased three basis points to 0.69%, and the 10-yr yield increased four basis points to 1.49%.
The U.S. Dollar Index decreased 0.1% to 96.03. WTI crude futures rose 1.2%, or $0.85, to $73.62/bbl.
Reviewing Thursday's economic data:
Personal income increased 0.4% month-over-month in November (Briefing.com consensus 0.5%) and personal spending increased 0.6% (Briefing.com consensus 0.6%). The PCE Price Index was up 0.6% month-over-month and the core PCE Price Index, which excludes food and energy, was up 0.5% (Briefing.com consensus 0.4%). On a year-over-year basis, the PCE Price Index was up 5.7%, versus 5.1% in October, and the core PCE Price Index was up 4.7%, versus 4.2% in November.
The key takeaway from the report is that the bad inflation data should keep the Fed focused on gearing its monetary policy toward battling inflation as opposed to the slowdown effect of the Omicron variant.
Initial jobless claims for the week ending December 18 were unchanged at 205,000 (Briefing.com consensus 206,000). Continuing claims for the week ending December 11 decreased by 8,000 to 1.859 million.
The key takeaway from the report is that it covers the week in which the survey for the December Employment Situation Report is conducted. With the low level of initial claims, economists should be predicting some relatively strong gains in December nonfarm payrolls.
New home sales increased 12.4% month-over-month in November to a seasonally adjusted annual rate of 744,000 units (Briefing.com consensus 770,000) from a downwardly revised 662,000 (from 745,000) in October. On a year-over-year basis, new home sales were down 14.0%.
The key takeaway from the report is that the growth in new home sales is concentrated in higher-priced homes, as inflation pressures, exacerbated by supply constraints and labor shortages, are curtailing the building of lower-priced homes and pinching affordability for lower-income buyers.
The final December reading for the University of Michigan Index of Consumer Sentiment came in at 70.6 (Briefing.com consensus 70.4) versus the preliminary reading of 70.4. The final reading for November was 67.4.
The key takeaway from the report is that the improvement was driven by higher income expectations among households in the bottom third of the income distribution, which has been sparked by higher wages for younger workers and a 5.9% increase in Social Security payments for 2022.
Durable goods orders increased 2.5% month-over-month in November (Briefing.com consensus 1.5%). Excluding transportation, durable goods orders rose 0.8% (Briefing.com consensus 0.6%).
The key takeaway from the report is that there was some slowing in business spending in November, evidenced by the 0.1% decline in orders for nondefense capital goods excluding aircraft. It is worth pointing out, however, that this small decline comes on the heels of steady increases in orders for these goods, so it can still be viewed as a natural slowing after a strong period of gains as opposed to anything more severe in meaning.
There is no economic data scheduled for Monday, whish is when the market reopens from holiday.
S&P 500 +25.8% YTD
Nasdaq Composite +21.5% YTD
Dow Jones Industrial Average +17.5% YTD
Russell 2000 +13.5% YTD
Crude futures settle higher
23-Dec-21 15:30 ET
Dow +269.03 at 36022.92, Nasdaq +145.33 at 15667.21, S&P +37.20 at 4733.76
[BRIEFING.COM] The S&P 500 continues to trade higher by 0.8% and is on track to close at a record high.
One last look at the sector performances shows industrials (+1.3%), consumer discretionary (+1.2%), and materials (+1.2%) in the lead with gains over 1.0%, while the real estate sector (-0.3%) is the lone holdout with a 0.3% decline.
WTI crude futures settled higher by 1.2%, or $0.85, to $73.62/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35753.89 +261.19 (0.74%)
Nasdaq 15521.88 +180.81 (1.18%)
SP 500 4696.56 +47.33 (1.02%)
10-yr Note +7/32 1.457
NYSE Adv 2442 Dec 843 Vol 715.4 mln
Nasdaq Adv 2748 Dec 1805 Vol 3.99 bln
Industry Watch
Strong: Consumer Discretionary, Technology, Real Estate, Communication Services, Materials
Weak: Consumer Staples, Utilities, Industrials
Moving the Market
Q3 GDP revised up to 2.3% from 2.1% in final estimate
Discretionary sector paces early advance
Gains in most global markets reflect improved sentiment
Nasdaq Paces Wednesday Rally
22-Dec-21 16:15 ET
Dow +261.19 at 35753.89, Nasdaq +180.81 at 15521.88, S&P +47.33 at 4696.56
[BRIEFING.COM] The stock market ended Wednesday on a firmly higher note with the Nasdaq (+1.2%) finishing ahead of the S&P 500 (+1.0%) and Dow (+0.7%).
The Wednesday advance unfolded in steady fashion, and it followed a positive showing from global equity markets. Reports from Washington remained focused on the administration's fiscal spending plans, which are expected to face continued resistance from Senator Manchin, who indicated that he would like to see spending proposals go through the reconciliation process.
All eleven sectors finished the day in positive territory with the consumer discretionary sector (+1.7%) ending in the lead while eight of the remaining ten groups recorded gains of under 1.0%. Top-weighted technology (+1.3%) finished behind the discretionary sector while industrials (+0.3%) and utilities (+0.4%) finished at the bottom of the leaderboard.
The discretionary sector drew support from gains in most components, though Tesla (TSLA 1008.87, +70.34, +7.5%) was a big driver of the outperformance, rallying back toward its 50-day moving average (1032.61) after CEO Musk said that he has "sold enough stock." Tesla's outperformance masked relative weakness in Amazon (AMZN 3420.74, +12.40, +0.4%) while CarMax (KMX 127.87, -9.12, -6.7%) fell past its 200-day moving average (132.46) to its lowest level since early October after its Q3 beat was marred by contracting margins.
As for technology, the influential group received support from gains in its largest components like Apple (AAPL 175.64, +2.65, +1.5%), Microsoft (MSFT 333.20, +5.91, +1.8%), Visa (V 217.96, +2.58, +1.2%), and Mastercard (MA 357.48, +6.74, +1.9%), which masked relative weakness among chipmakers. However, the PHLX Semiconductor Index (+0.9%) rallied into the close, narrowing its performance gap.
The health care sector (+1.2%) also finished among the leaders thanks to gains in all but six of its components. Pfizer (PFE 59.55, +0.60, +1.0%) climbed toward its record high from Monday after the FDA issued an emergency use authorization for the company's antiviral coronavirus treatment.
The industrials sector (+0.3%) finished at the bottom of the leaderboard, due in part to underperformance from transport stocks that kept the Dow Jones Transportation Average near its unchanged level into the close.
Treasuries climbed with the 10-yr yield slipping three basis points to 1.46%. WTI crude rose $1.66, or 2.3%, to $72.77/bbl, revisiting its high from last week.
Reviewing today's economic data:
The third estimate for Q3 GDP showed an upward revision to 2.3% (Briefing.com consensus 2.1%) from the second estimate of 2.1%. The GDP Price Deflator was revised to 6.0% (Briefing.com consensus 5.9%) from the second estimate of 5.9%.
The key takeaway from the report is that the growth had a lot to do with the change in private inventories. Real final sales of domestic product, which excludes the change in private inventories, were up 0.1%.
The Conference Board's Consumer Confidence Index increased to 115.8 in December (Briefing.com consensus 111.5) from an upwardly revised 111.9 (from 109.5) in November.
The key takeaway from the report is that the pickup in the short-term outlook, despite inflation pressures and the arrival of the Omicron variant, suggests consumer spending should remain a positive GDP growth driver.
Existing home sales increased 1.9% m/m in November to a seasonally adjusted annual rate of 6.46 million (Briefing.com consensus 6.50 million). Total sales in November were down 2.0% from a year ago.
The key takeaway from the report is that inventory remains extremely tight. That is leading to hefty price increases and crimping sales growth in the existing home market because of the limited supply and affordability pressures for prospective buyers.
The weekly MBA Mortgage Index fell 0.6% to follow last week's 4.0% decrease. The Purchase Index fell 3.3% while the Refinance Index rose 2.2%.
The market will receive a full slate of data tomorrow, starting with November Personal Income (Briefing.com consensus 0.5%; prior 0.5%), Personal Spending (Briefing.com consensus 0.6%; prior 1.3%), PCE Prices (prior 0.6%), Core PCE Prices (Briefing.com consensus 0.4%; prior 0.6%), weekly Initial Claims (Briefing.com consensus 206,000; prior 206,000), Continuing Claims (prior 1.845 mln), November Durable Orders (Briefing.com consensus 1.5%; prior -0.5%), and Durable Orders -ex transportation (Briefing.com consensus 0.6%; prior 0.5%) at 8:30 ET, followed by November New Home Sales (Briefing.com consensus 770,000; prior 745,000) and the final December University of Michigan Consumer Sentiment survey (Briefing.com consensus 70.4; prior 70.4) at 10:00 ET.
S&P 500 +25.0% YTD
Nasdaq Composite +20.4% YTD
Dow Jones Industrial Average +16.8% YTD
Russell 2000 +12.5% YTD
Crude Oil Nears Recent High
22-Dec-21 15:30 ET
Dow +207.34 at 35700.04, Nasdaq +129.28 at 15470.35, S&P +35.70 at 4684.93
[BRIEFING.COM] The S&P 500 trades higher by 0.8% with 30 minutes remaining in today's session. The benchmark index is now up 1.4% for the week and up 2.6% since the end of November.
All eleven sectors continue holding gains going into the home stretch, including the energy sector (+0.6%), which made a brief appearance among the leaders in early trade. The sector has climbed 2.2% this week, trading only behind the technology sector (+1.0%; +2.3% week-to-date) on this week's leaderboard.
The energy sector received support from a rising price of oil, as WTI crude climbed $1.66, or 2.3%, to $72.77/bbl, revisiting its high from last week.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35492.70 +560.54 (1.60%)
Nasdaq 15341.07 +360.14 (2.40%)
SP 500 4649.23 +81.21 (1.78%)
10-yr Note -5/32 1.484
NYSE Adv 2682 Dec 583 Vol 961.1 mln
Nasdaq Adv 3360 Dec 1144 Vol 4.5 bln
Industry Watch
Strong: Energy, Information Technology, Consumer Discretionary, Financials
Weak: Consumer Staples, Utilities
Moving the Market
-- Rebound-minded action permeates market
-- A belief that the market was oversold on a short-term basis and was due for a rebound
-- Nike (NKE) and Micron (MU) beat earnings expectations
-- S&P 500 reclaims 50-day moving average (4614)
Rebound bias permeates the market
21-Dec-21 16:20 ET
Dow +560.54 at 35492.70, Nasdaq +360.14 at 15341.07, S&P +81.21 at 4649.23
[BRIEFING.COM] The S&P 500 rallied 1.8% on Tuesday, bouncing back from a three-day skid amid a buy-the-dip mindset. The Dow Jones Industrial Average rose 1.6% while the Nasdaq Composite and Russell 2000 outperformed with 2.4% and 3.0% gains, respectively.
Nine of the 11 S&P 500 sectors closed higher, paced by the energy (+2.9%), information technology (+2.6%), consumer discretionary (+2.5%), and financials (+2.0%) sectors with 2-3% gains. The defensive-oriented utilities (-0.2%) and consumer staples (-0.1%) sectors were the exceptions.
There was a shift in sentiment, precipitated by a belief that the market had gotten oversold on a short-term basis and was due for a rebound. Conviction in buying efforts increased as the S&P 500 reclaimed its 50-day moving average (4614) after closing below the key technical level yesterday.
The mega-caps solidified the rally effort later in the day after a slow start to the session. The Vanguard Mega Cap Growth ETF (MGK 255.18, +5.77, +2.3%) advanced 2.3% after being up just 0.1% at its session low.
To be fair, there were some positive-sounding news in the mix. President Biden said the U.S. is "absolutely not" going back to March 2020 in terms of lockdowns and having to worry about serious infection. Separately, reports suggested that the door is still open for Senator Manchin (D-WV) to get on board with the Build Back Better Act.
Nike (NKE 166.63, +9.65, +6.2%) and Micron (MU 90.68, +8.65, +10.5%) supported their own causes with better-than-expected earnings reports, and the positive reactions carried over to the retail and semiconductor spaces. The SPDR S&P Retail ETF (XRT 87.77, +2.62) gained 3.1%. The Philadelphia Semiconductor Index gained 3.4%.
The rebound-minded action extended beyond equities. Briefly, Treasury yields settled higher in a curve-steepening trade, WTI crude futures rose 3.6%, or $2.45, to $71.11/bbl, copper futures rose 1.2% to $4.347/lb, and even cryptocurrencies saw some relief.
The 2-yr yield rose five basis points to 0.67%, and the 10-yr yield rose seven basis points to 1.49%. The U.S. Dollar Index decreased 0.1% to 96.49. The CBOE Volatility Index dropped 8.1% to 21.01, as hedging interest waned with the bullish price action in the major indices.
Reviewing Tuesday's economic data:
The Current Account Balance for the third quarter totaled $214.8 billion (Briefing.com consensus -$204.8 billion). The second quarter deficit was upwardly revised to $198.3 billion from $190.3 billion.
Looking ahead, investors will receive the Conference Board's Consumer Confidence Index for December, Existing Home Sales for November, the third estimate for Q3 GDP, and the weekly MBA Mortgage Applications Index on Wednesday.
S&P 500 +23.8% YTD
Nasdaq Composite +19.0% YTD
Dow Jones Industrial Average +16.0% YTD
Russell 2000 +11.6% YTD
Crude futures rebound alongside equities
21-Dec-21 15:30 ET
Dow +541.27 at 35473.43, Nasdaq +321.68 at 15302.61, S&P +75.47 at 4643.49
[BRIEFING.COM] The S&P 500 is up 1.6% while the Russell 2000 is up 2.8%.
One last look at the sectors shows energy (+3.0%), information technology (+2.3%), and consumer discretionary (+2.2%) up more than 2.0%, while the utilities (-0.2%) and consumer staples (-0.1%) sectors remain in negative territory.
WTI crude futures settled higher by 3.6%, or $2.45, to $71.11/bbl amid the rebound-minded bias in the broader market.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34932.16 -433.28 (-1.23%)
Nasdaq 14980.93 -188.74 (-1.24%)
SP 500 4568.02 -52.62 (-1.14%)
10-yr Note +3/32 1.380
NYSE Adv 636 Dec 2634 Vol 1.1 bln
Nasdaq Adv 1267 Dec 3258 Vol 4.4 bln
Industry Watch
Strong: Consumer Staples, Utilities
Weak: Financials, Materials, Consumer Discretionary, Industrials
Moving the Market
-- Sharp losses amid growth concerns, although market closes off intraday lows
-- Europe tightens economic restrictions, Senator Manchin (D-WV) rejects Build Back Better Act
-- S&P 500 closes below 50-day moving average (4608)
Major indices decline sharply but off lows
20-Dec-21 16:20 ET
Dow -433.28 at 34932.16, Nasdaq -188.74 at 14980.93, S&P -52.62 at 4568.02
[BRIEFING.COM] The S&P 500 fell 1.1% on Monday amid pestering growth concerns, although the benchmark index was down as much as 1.9% intraday. The Nasdaq Composite (-1.2%) and Dow Jones Industrial Average (-1.2%) both declined 1.2% while the Russell 2000 lagged with a 1.6% decline.
Growth concerns were driven by new COVID restrictions in Europe, word from Senator Manchin (D-WV) that he won't support the $1.75 trillion Build Back Better Act, and a view that the Fed could be tightening policy at an inopportune time next year.
Sellers maintained control of the market until shortly after the close of European markets (11:30 a.m. ET). Buyers stepped in, spying a good entry point with the S&P 500 trading below its 50-day moving average (4608) and down as much as 4.3% from its intraday high last Thursday.
The S&P 500 still closed below that key technical level, but two of its 11 sectors did sneak into positive territory, namely utilities (+0.1%) and consumer staples (+0.04%). The cyclical financials (-1.9%), materials (-1.8%), industrials (-1.7%), and consumer discretionary (-1.7%) sectors closed sharply lower.
Moderna (MRNA 276.38, -18.42, -6.3%) fumbled a 9% gain, and closed lower by 6%, even though the company announced encouraging preliminary data for its COVID-19 booster shots. Oracle (ORCL 91.64, -4.98, -5.2%) fell 5% on confirmation of its acquisition of Cerner (CERN 90.49, +0.72, +0.8%) for $95.00/share in cash, or approximately $28.3 billion in equity value.
Elsewhere, a steepened Treasury yield curve signaled a more constructive perspective. The 10-yr yield increased two basis points to 1.42% after trading at 1.35% overnight. The 2-yr yield decreased two basis points to 0.62% amid a view that the Fed could still lean cautiously next year given the economic uncertainty of the Omicron variant.
WTI crude futures fell 3% ($68.66/bbl, -2.27, -3.2%) on expectations for weaker demand amid tighter economic restrictions. The U.S. Dollar Index decreased 0.1% to 96.51. The CBOE Volatility Index closed higher by 6.0% at 22.87 after topping 27.00 intraday.
Monday's economic data was limited to the Conference Board's Leading Economic Index (LEI), which increased 1.1% in November (Briefing.com consensus 1.0%) following a 0.9% increase in October. Looking ahead, investors will receive the Currant Account Balance for the third quarter on Tuesday.
S&P 500 +21.6% YTD
Nasdaq Composite +16.2% YTD
Dow Jones Industrial Average +14.1% YTD
Russell 2000 +8.3% YTD
Crude futures settle sharply lower amid demand concerns
20-Dec-21 15:30 ET
Dow -505.17 at 34860.27, Nasdaq -189.24 at 14980.43, S&P -59.54 at 4561.10
[BRIEFING.COM] The S&P 500 continues to trade lower by 1.3% amid losses in all 11 sectors.
One last look at the sectors shows financials (-2.3%), materials (-2.0%), industrials (-1.8%), and consumer discretionary (-1.8%) underperforming with sharp losses while the consumer staples (-0.1%) and utilities (-0.2%) sectors are down just 0.1-0.2%.
WTI crude futures settled lower by 3.2%, or $2.27, to $68.66/bbl amid demand concerns attributed to new COVID restrictions in Europe.
Market Snapshot
briefing.com
Dow 35365.44 -532.20 (-1.48%)
Nasdaq 15169.67 -10.75 (-0.07%)
SP 500 4620.64 -48.03 (-1.03%)
10-yr Note +3/32 1.388
NYSE Adv 1366 Dec 1889 Vol 3.5 bln
Nasdaq Adv 2407 Dec 1991 Vol 7.4 bln
Industry Watch
Strong: Real Estate
Weak: Financials, Energy, Industrials, Consumer Staples, Utilities
Moving the Market
-- Large-cap indices close lower amid growth concerns, technical factors
-- S&P 500 found technical support at 50-day moving average (4604)
-- Treasury yield curve flattens
S&P 500 falls 1% in broad-based decline
17-Dec-21 16:20 ET
Dow -532.20 at 35365.44, Nasdaq -10.75 at 15169.67, S&P -48.03 at 4620.64
[BRIEFING.COM] The S&P 500 fell 1.0% on this quadruple witching-options expiration Friday, as the market was influenced by growth concerns and technical factors. The Dow Jones Industrial Average fell 1.5%, while the Nasdaq Composite decreased just 0.1% and the Russell 2000 gained 1.0%.
The COVID-19 situation seemed to weigh on the market with sporting events continuing to get postponed, President Biden warning of "winter of severe illness and death" for those unvaccinated against COVID-19, and former FDA Commissioner Gottlieb suggesting that businesses in New York might voluntarily close for a few weeks due to surging cases.
All 11 S&P 500 sectors closed lower, led by the cyclical financials (-2.3%), energy (-2.3%), and industrials (-1.7%) sectors; the Treasury yield curve flattened amid increased demand for longer-dated maturities; and oil prices ($70.93, -1.43, -2.0%) settled sharply lower. The real estate sector (-0.3%) declined the least.
Technical factors were most evident in the S&P 500, which found support at its 50-day moving average (4604) after it dipped below the level in the morning. The mega-caps lifted the benchmark index off those lows, as investors presumably saw their recent declines as a good buying opportunity.
Similarly, small-caps and retail stocks saw some relief after lagging in recent weeks, benefiting from rotation-minded activity. The Russell 2000 and SPDR S&P Retail ETF (XRT 87.99, +0.45, +0.5%) both entered the session in correction territory, or down more than 10.0% from recent highs.
Oracle (ORCL 96.61, -6.61, -6.4%) saw no relief after The Wall Street Journal reported that the company is in discussions to acquire Cerner (CERN 89.77, +10.28, +12.9%) for as much as $30 billion. ORCL shares fell 6% while CERN shares rose 13%.
Rivian (RIVN 97.70, -11.17, -10.3%) dropped 10% after missing EPS estimates while FedEx (FDX 250.32, +11.80, +5.0%) rose 5% on pleasing earnings news. FedEx also authorized a new $5 billion share repurchase program.
Recapping the price action in the Treasury market, the 2-yr yield increased three basis points to 0.64% while the 10-yr yield decreased two basis points to 1.40%. The U.S. Dollar Index gained 0.7% to 96.68.
Investors did not receive any economic data on Friday. Looking ahead, the Conference Board will release its Leading Economic Index for November on Monday.
S&P 500 +23.0% YTD
Nasdaq Composite +17.7% YTD
Dow Jones Industrial Average +15.6% YTD
Russell 2000 +10.1% YTD
Crude futures fall 2%
17-Dec-21 15:30 ET
Dow -419.25 at 35478.39, Nasdaq +19.88 at 15200.30, S&P -33.17 at 4635.50
[BRIEFING.COM] The S&P 500 is down 0.7% and on track to end the week with a 1.6% decline.
One last look at the sectors shows financials (-1.9%), materials (-1.9%), and industrials (-1.1%) down more than 1.0% while the real estate sector (+0.2%) is the only sector trading higher.
WTI crude futures settled lower by 2.0%, or $1.43, to $70.93/bbl.
Market Snapshot
https://stockcharts.com/def/servlet/ScanUI
Dow 35897.64 -29.79 (-0.08%)
Nasdaq 15180.42 -385.15 (-2.47%)
SP 500 4668.67 -41.18 (-0.87%)
10-yr Note +3/32 1.424
NYSE Adv 1494 Dec 1775 Vol 1.1 bln
Nasdaq Adv 1557 Dec 2890 Vol 4.8 bln
Industry Watch
Strong: Energy, Materials, Financials, Health Care, Consumer Staples
Weak: Information Technology, Consumer Discretionary
Moving the Market
-- Mega-caps/growth stocks fumble post-FOMC gains while value stocks rise
-- Adobe (ADBE) sinks on disappointing earnings news
-- 2-yr yield drops, outpaces decline in 10-yr yield
Mega-caps reverse course and drag market lower
16-Dec-21 16:15 ET
Dow -29.79 at 35897.64, Nasdaq -385.15 at 15180.42, S&P -41.18 at 4668.67
[BRIEFING.COM] The S&P 500 fell 0.9% on Thursday, as the mega-caps fumbled their post-FOMC gains and dragged the benchmark index lower in a steady retreat. The Nasdaq Composite (-2.5%) and Russell 2000 (-2.0%) saw steeper declines, while the Dow Jones Industrial Average outperformed on a relative basis with a 0.1% decline.
The market had a bullish tone in the pre-market session, but that started to unwind after Adobe (ADBE 566.09, -64.24, -10.2%) issued downside guidance for fiscal Q1 and FY22. ADBE shares dropped 10%, and the lack of dip-buying efforts appeared to weigh on sentiment and other growth stocks with high valuations.
Moreover, the pace and ease at which the growth stocks retreated supported suspicions that yesterday's rally was fueled by short-covering activity. The heavily-weighted S&P 500 information technology (-2.9%) and consumer discretionary (-2.2%) sectors tumbled 3% and 2%, respectively.
The value-oriented stocks, though, extended gains. It's just that the mega-cap losses diminished their positive influence. Eight of the 11 S&P 500 sectors, including financials (+1.2%), materials (+1.0%), and energy (+0.7%), closed higher. The Russell 1000 Value Index gained 0.5%.
The financials sector drew support from the curve-steepening activity in the Treasury market, driven by a steeper decline in shorter-dated yields versus longer-dated yields. The 2-yr yield decreased six basis points to 0.61%, and the 10-yr yield decreased four basis points to 1.42%. The U.S. Dollar Index fell 0.6% to 95.98.
The gains in the cyclical sectors, the curve-steepening activity, and even an increase in oil prices ($72.36/bbl, +1.47, +2.1%) indicated that growth concerns weren't a driving force in today's index declines.
On a related note, housing starts and building permits for November were better than expected, and while weekly initial claims were higher than expected (206,000), the four-week moving average (203,750) declined to its lowest level since Nov. 15, 1969.
In light of the Fed's decision yesterday, other central bank meetings received additional attention. The Bank of England increased its bank rate by 15 basis points to 0.25% in a surprise move while the European Central Bank left rates unchanged, as expected, and announced a further tapering of asset purchases.
Reviewing Thursday's economic data:
Housing starts in November increased 11.8% month-over-month to a seasonally adjusted annual rate of 1.679 million units (Briefing.com consensus 1.570 million) while building permits rose 3.6% to 1.712 million (Briefing.com consensus 1.670 million).
The key takeaway from this report was the strength seen in single-unit activity for both starts (+11.3%) and permits (+2.7%), as new supply is greatly needed in a tight and increasingly cost-prohibitive housing market.
Initial jobless claims for the week ending December 11 were a bit higher than expected, increasing by 18,000 to 206,000 (Briefing.com consensus 195,000), but still holding at a relatively low and encouraging level. Continuing claims for the week ending December 4 decreased by 154,000 to 1.845 million, which is the lowest since March 14, 2020.
The key takeaway from the report is the understanding that the four-week moving average for initial claims (203,750) is the lowest since November 15, 1969.
Total industrial production increased 0.5% in November (Briefing.com consensus +0.8%) following an upwardly revised 1.7% increase (from 1.6%) in October. The capacity utilization rate rose to 76.8% (Briefing.com consensus 76.8%) from an upwardly revised 76.5% (from 76.4%) in October.
The key takeaway from the report is that it points to plenty of latent growth potential when the semiconductor supply shortage, and other supply chain issues, can get worked out.
The Philadelphia Fed Index for December dropped to 15.4 (Briefing.com consensus 30.0) from 39.0 in November.
The preliminary IHS Markit Services PMI decreased to 57.5 from the final reading of 58.0 in November. The preliminary IHS Markit Manufacturing PMI decreased to 57.8 from the final reading of 58.3 in November.
There is no economic data scheduled for Friday.
S&P 500 +24.3% YTD
Nasdaq Composite +17.8% YTD
Dow Jones Industrial Average +17.3% YTD
Russell 2000 +9.0% YTD
WTI crude futures settle higher by 2%
16-Dec-21 15:30 ET
Dow +36.03 at 35963.46, Nasdaq -356.51 at 15209.06, S&P -33.22 at 4676.63
[BRIEFING.COM] The S&P 500 is down 0.7% to trade off prior lows (-1.2%).
One last look at the sectors shows information technology (-2.8%), consumer discretionary (-1.8%), and communication services (-0.3%) as the only sectors trading lower. The financials (+1.4%) and materials (+1.1%) are atop the standings with gains over 1.0%.
WTI crude futures settled higher by 2.1%, or $1.47, to $72.36/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35927.56 +383.38 (1.08%)
Nasdaq 15565.57 +327.94 (2.15%)
SP 500 4709.84 +75.75 (1.63%)
10-yr Note -1/32 1.457
NYSE Adv 2135 Dec 1141 Vol 1.1 bln
Nasdaq Adv 2725 Dec 1601 Vol 5.2 bln
Industry Watch
Strong: Health Care, Information Technology, Utilities, Real Estate
Weak: Materials, Consumer Discretionary, Energy
Moving the Market
-- Positive reaction to the FOMC statement and economic/rate projections
-- Fed funds rate left near zero and most Fed members see at least three rate hikes in 2022
-- Fed Chair Powell talks positively on the labor market and the consumer
-- Retail sales for November miss expectations
Stocks rally after Fed does the expected
15-Dec-21 16:20 ET
Dow +383.38 at 35927.56, Nasdaq +327.94 at 15565.57, S&P +75.75 at 4709.84
[BRIEFING.COM] The S&P 500 rallied 1.6% on Wednesday, ending a two-day skid as the market reacted positively to the Fed's policy decision and Fed Chair Powell's press conference. The Dow Jones Industrial Average (+1.1%), Nasdaq Composite (+2.2%), and Russell 2000 (+1.7%) also closed sharply higher.
As anticipated, the Fed left the target range for the fed funds rate unchanged at 0.00-0.25%, said it will double the reduction of asset purchases to $30 billion per month ($20 billion for Treasuries and $10 billion for agency MBS), and signaled three rate hikes in 2022 amid expectations for continued inflation pressures.
The market was pleased to hear Fed Chair Powell talk positively on the labor market and the consumer, even as the Omicron variant poses a risk to the economy. He argued the Fed will tighten policy in a gradual, yet accommodative, way because of robust economic activity that is driving inflation higher. That was an optimistic point of view for the market.
Investors swiftly bought the dip in the mega-caps, which were dragging the S&P 500 lower by 0.3% prior to the Fed announcement. The heavily-weighted S&P 500 information technology sector went from a 0.7% intraday decline to a sector-leading 2.8% gain by the close.
The health care (+2.1%), utilities (+1.7%), real estate (+1.5%), and consumer staples (+1.2%) sectors were strong all session. The energy sector (-0.4%), on the other hand, was the only sector that closed lower despite higher oil prices ($70.89, +0.32, +0.5%).
Strikingly, the fed-funds-sensitive 2-yr yield settled higher by just one basis point to 0.67% after hitting 0.72% in the wake of the FOMC statement. With three rate hikes forecasted for next year, the 2-yr yield might have already priced in the Fed's near-term path. The 10-yr yield rose three basis points to 1.46%. The U.S. Dollar Index lost 0.2% to 96.37.
Short-covering activity might have contributed to today's price action. The CBOE Volatility Index was up 7.2% intraday amid increased hedging interest but ended the session lower by 11.9% to 19.29.
In corporate news, Eli Lilly (LLY 275.12, +25.90, +10.4%) climbed 10% after the company provided upbeat FY21 and FY22 EPS guidance. Lowe's (LOW 257.56, +5.10, +2.0%) overcame a negative start attributed to relatively disappointing guidance. Nucor (NUE 108.22, -10.20, -8.6%) wasn't as lucky, with shares losing 8.6% following its downbeat guidance.
Reviewing Wednesday's economic data:
Total retail sales were up 0.3% month-over-month (Briefing.com consensus +0.8%) as were retail sales, excluding autos (Briefing.com consensus +0.9%). On a year-over-year basis, total retail sales were up 18.2% and up 19.5% excluding autos.
The key takeaway from the report is that it likely reflects the push to make holiday purchases early given all the reports about supply chain bottlenecks, meaning it might not be as disappointing as it appears at first blush. Tellingly, nonstore retailer sales were flat after increasing 4.1% in October and electronics and appliance store sales were down 4.6% after increasing 3.1% in October.
Import prices increased 0.7% in November after increasing 1.5% in October. Excluding oil, import prices increased 0.5% after increasing 0.5% in October. Export prices increased 1.0% after increasing 1.6% in October. Excluding agriculture, export prices increased 1.0% after increasing 1.7% in October.
The Empire State Manufacturing Survey increased to 31.9 in December (Briefing.com consensus 25.0) from 30.9 in November.
The NAHB Housing Market Index increased to 84.0 in December (Briefing.com consensus 84.0) from 83.0 in November.
Business inventories increased 1.2% m/m in October (Briefing.com consensus 1.0%) following a revised 0.8% increase (from 0.7%) in September.
The weekly MBA Mortgage Applications Index decreased 4.0% following a 2.0% increase in the prior week.
Looking ahead to Thursday, investors will receive weekly Initial and Continuing Claims, Housing Starts and Building Permits for November, Industrial Production and Capacity Utilization for November, the Philadelphia Fed Index for December, and the preliminary IHS Markit Manufacturing and Services PMIs for December.
S&P 500 +25.4% YTD
Nasdaq Composite +20.8% YTD
Dow Jones Industrial Average +17.4% YTD
Russell 2000 +11.2% YTD
Crude futures settle higher
15-Dec-21 15:30 ET
Dow +371.81 at 35915.99, Nasdaq +274.19 at 15511.82, S&P +66.21 at 4700.30
[BRIEFING.COM] The S&P 500 is trading at session highs with a 1.3% gain, as Fed Chair Powell talks positively on the labor market and the consumer. He also also argued that he doesn't think the Fed isn't "behind the curve" on inflation.
One last look at the sectors shows ten sectors trading higher and one -- energy (-0.1%) -- trading lower. The information technology sector (+2.1%) has claimed the top spot after being down 0.7% earlier today.
WTI crude futures settled higher 0.5%, or $0.32, to $70.89/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35545.56 -105.39 (-0.30%)
Nasdaq 15237.63 -175.64 (-1.14%)
SP 500 4634.23 -34.74 (-0.74%)
10-yr Note -3/32 1.441
NYSE Adv 970 Dec 2334 Vol 1.0 bln
Nasdaq Adv 1272 Dec 3298 Vol 4.7 bln
Industry Watch
Strong: Financials
Weak: Information Technology, Real Estate, Industrials
Moving the Market
-- Major indices trade lower but off session lows
-- PPI data for November was hotter than expected
-- Lingering growth/coronavirus concerns
Stocks close lower following hot PPI data
14-Dec-21 16:20 ET
Dow -105.39 at 35545.56, Nasdaq -175.64 at 15237.63, S&P -34.74 at 4634.23
[BRIEFING.COM] The S&P 500 fell 0.8% on Tuesday, as concerns about inflation and economic growth weighed on sentiment during an important Fed policy meeting. The Nasdaq Composite (-1.1%) and Russell 2000 (-1.0%) both underperformed the benchmark index, while the Dow Jones Industrial Average declined just 0.3%.
Prior to the open, the Producer Price Index for November came in hotter than expected, with the index for final demand up 0.8% month-over-month (Briefing.com consensus 0.5%) and up 9.6% year-over-year. The hot inflation report may have put additional pressure on the Fed to announce a faster tapering plan and signal a more hawkish rate path tomorrow.
The market appeared concerned about the implications a more aggressive Fed would have on global growth with COVID-19 still disrupting supply chains and contributing to restrictive policies. Reports indicated that companies in a manufacturing hub in China suspended operations because of an outbreak in cases.
While the market eased off intraday lows in the afternoon, ten of the 11 S&P 500 sectors still closed lower. The information technology sector (-1.6%) led the retreat and featured influential weakness in Apple (AAPL 174.33, -1.41, -0.8%), Microsoft (MSFT 328.34, -11.06, -3.3%) and Adobe (ADBE 614.86, -43.44, -6.6%).
Apple, like Microsoft, succumbed to profit-taking interest, even though BofA Securities upgraded AAPL to Buy from Neutral. ADBE was downgraded to Neutral from Overweight at JP Morgan.
The financials sector (+0.6%) escaped with a respectable gain amid an uptick in Treasury yields. The 2-yr yield increased two basis points to 0.66%, and the 10-yr yield increased one basis point to 1.44%. The U.S. Dollar Index rose 0.3% to 96.58. WTI crude futures fell 0.9%, or $0.67, to $70.57/bbl.
The modest reaction in the Treasury market to the hot inflation data was an interesting development. Selling interest may have been capped by growth concerns and/or a view that a more aggressive Fed could rein in inflation pressures next year.
Separately, Pfizer (PFE 55.54, +0.34, +0.6%) specified its COVID-19 oral antiviral reduced the risk of hospitalization or death in high-risk patients by 89% when taken within three days of symptom onset. PFE shares rose to an all-time high.
Reviewing Tuesday's economic data:
The November Producer Price Index showed that the index for final demand increased 0.8% month-over-month (Briefing.com consensus 0.5%) while the index for final demand, less foods and energy, increased 0.7% (Briefing.com consensus 0.4%). That left the year-over-year increases on an unadjusted basis at 9.6% and 7.7%, respectively.
The key takeaway from the report is that it is another sign that inflation pressures are persisting in an unacceptable manner and it will likely force the Fed into an uncomfortable position of taking a more aggressive policy path at a time when the market also has festering concerns about a slowdown in growth.
The NFIB Small Business Optimism Index increased to 98.4 in November from 98.2 in October.
Looking ahead to Wednesday,, investors can expect the FOMC Rate Decision, Retail Sales for November, the NAHB Housing Market Index for December, Import and Export Prices for November, the Empire State Manufacturing Index for December, Business Inventories for October, and Net Long-Term TIC Flows for October.
S&P 500 +23.4% YTD
Nasdaq Composite +18.2% YTD
Dow Jones Industrial Average +16.1% YTD
Russell 2000 +9.4% YTD
Crude futures settle lower
14-Dec-21 15:30 ET
Dow -48.51 at 35602.44, Nasdaq -144.90 at 15268.37, S&P -27.30 at 4641.67
[BRIEFING.COM] The S&P 500 is down 0.7% after being down 1.3% earlier today.
One last look at the sectors shows ten of the 11 groups still trading lower. The information technology sector (-1.6%) is the weakest link, while the financials sector (+0.9%) outperforms with a 0.9% gain.
WTI crude futures settled lower by 0.9%, or $0.67, to $70.57/bbl. On a related note, the IEA lowered its global demand outlook for the rest of the year and 2022 because of the coronavirus.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35650.95 -320.04 (-0.89%)
Nasdaq 15413.27 -217.32 (-1.39%)
SP 500 4668.97 -43.05 (-0.91%)
10-yr Note +27/32 1.423
NYSE Adv 1015 Dec 2284 Vol 1.0 bln
Nasdaq Adv 1262 Dec 3142 Vol 4.4 bln
Industry Watch
Strong: Real Estate, Utilities, Consumer Staples, Health Care
Weak: Energy, Financials, Consumer Discretionary, Information Technology
Moving the Market
-- Major indices struggle in defensive session
-- Omicron variant hits UK policy and sentiment
-- Hesitation on the part of buyers in front of the FOMC policy meeting this week
-- Cyclical stocks underperformed, but so did the growth stocks
Major indices struggle in defensive session
13-Dec-21 16:20 ET
Dow -320.04 at 35650.95, Nasdaq -217.32 at 15413.27, S&P -43.05 at 4668.97
[BRIEFING.COM] The S&P 500 fell 0.9% on Monday in a defensive session, as investors digested the latest Omicron news and waited for the Fed's policy decision this week. The Dow Jones Industrial Average also declined 0.9%, while the Nasdaq Composite (-1.4%) and Russell 2000 (-1.4%) both declined 1.4%.
Risk sentiment was pressured by lingering growth concerns after UK Prime Minister Johnson warned of an impending "tidal wave" of new coronavirus cases and the British government upped its COVID-19 alert level. Cyclical stocks, including travel names, were among the weakest performers today.
The cyclical S&P 500 energy (-2.8%), consumer discretionary (-2.4%), and financials (-1.2%) sectors underperformed alongside the information technology sector (-1.6%). Accordingly, investors leaned defensively into the real estate (+1.3%), utilities (+1.2%), consumer staples (+1.2%), and health care (+0.9%) sectors.
After a record-setting rally last week, it's also plausible that investors saw the news as a convenient excuse to take profits and withhold buying conviction until the FOMC concludes its policy meeting on Wednesday. That's loosely based on the underperformance of the tech sector and growth stocks.
Apple (AAPL 175.74, -3.71, -2.1%) nearly reached a $3.0 trillion market capitalization after JP Morgan raised its price target on AAPL to a Street-high of $210. The firm also reiterated the stock with an Overweight rating and a "top pick into 2022." AAPL shares closed lower alongside the other mega-caps, even though long-term interest rates declined in their favor.
The Vanguard Mega Cap Growth ETF (MGK 258.09, -3.65, -1.4%) fell 1.4%, which was twice the decline of the Invesco S&P 500 Equal Weight ETF (RSP 158.58, -1.16, -0.7%).
Specifying the moves in the Treasury market, the 10-yr yield declined seven basis points to 1.42% while the 2-yr yield declined two basis points to 0.64% -- flattening the curve and corroborating growth concerns. The U.S. Dollar Index rose 0.3% to 96.36. WTI crude futures decreased 0.6%, or $0.46, to $71.24/bbl.
Pfizer (PFE 55.22, +2.44, +4.6%) was an individual standout with a 4.6% gain after agreeing to acquire Arena Pharma (ARNA 90.08, +40.14, +80.4%) for $6.7 billion, or $100 per share, in cash. The deal represented a 100% premium over ARNA's closing price from last Friday.
Investors did not receive any economic data on Monday. Looking ahead, investors will receive the Producer Price Index for November and the NFIB Small Business Optimism Index for November on Tuesday.
S&P 500 +24.3% YTD
Nasdaq Composite +19.6% YTD
Dow Jones Industrial Average +16.5% YTD
Russell 2000 +10.4% YTD
Crude futures settle lower
13-Dec-21 15:30 ET
Dow -221.28 at 35749.71, Nasdaq -147.44 at 15483.15, S&P -28.24 at 4683.78
[BRIEFING.COM] The S&P 500 is down 0.6% amid losses in seven of its 11 sectors.
One last look at the S&P 500 sectors shows energy (-2.3%), consumer discretionary (-2.1%), information technology (-1.0%), and financials (-1.0%) leading the retreat with losses between 1-2%. The health care (+1.0%), consumer staples (+1.4%), utilities (+1.5%), and real estate (+1.4%) sectors are each up at least 1.0%.
WTI crude futures settled lower by 0.6%, or $0.46, to $71.24/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35970.99 +216.30 (0.60%)
Nasdaq 15630.59 +113.23 (0.73%)
SP 500 4712.02 +44.57 (0.95%)
10-yr Note +26/32 1.458
NYSE Adv 1551 Dec 1733 Vol 827.5 mln
Nasdaq Adv 1849 Dec 2713 Vol 4.3 bln
Industry Watch
Strong: Information Technology, Consumer Staples
Weak: Financials
Moving the Market
-- S&P 500 closes at a record high following hot CPI data for November
-- Total CPI increased 0.8% m/m (Briefing.com consensus 0.6%), leaving it up 6.8% yr/yr
-- Treasury market held its ground
-- Oracle (ORCL), Broadcom (AVGO), and Costco (COST) rally on positive earnings news
-- Small-caps and micro-caps struggled to attract buying interest
S&P 500 notches record close following hot CPI data
10-Dec-21 16:20 ET
Dow +216.30 at 35970.99, Nasdaq +113.23 at 15630.59, S&P +44.57 at 4712.02
[BRIEFING.COM] The S&P 500 rose 1.0% on Friday, and closed at a record high, following a hot Consumer Price Index (CPI) report for November. The Nasdaq Composite (+0.7%) and Dow Jones Industrial Average (+0.6%) also posted decent gains, and like the S&P 500, ended the week with gains over 3.5%.
All 11 S&P 500 sectors closed higher, with the information technology sector (+2.1%) being the biggest and most influential gainer. The financials sector (+0.1%) underperformed on a relative basis with a 0.1% gain.
Not all stocks reacted positively to the CPI report, though. The small-cap Russell 2000 (-0.4%) and the iShares Micro-Cap ETF (IWC 138.77, -1.12, -0.8%) both closed lower. Declining issues outpaced advancing issues at both the NYSE and Nasdaq.
Specifying the data, total CPI increased 0.8% m/m in November (Briefing.com consensus 0.6%), leaving it up 6.8% yr/yr -- its highest level since 1982. Core CPI, which excludes food and energy, increased 0.5% m/m, as expected, and was up 4.9% yr/yr.
The report wasn't too surprising given all the commentary about increased inflation pressures and the in-line core CPI print. Some investors took the data at face value: inflation is a byproduct of economic growth and offers companies pricing power for greater earnings potential.
As an aside, Oracle (ORCL 102.63, +13.86, +15.6%), Broadcom (AVGO 631.68, +48.26, +8.3%), and Costco (COST 558.82, +34.49, +6.6%) each rallied noticeably on pleasing earnings results, with ORCL and AVGO also announcing plans to repurchase $10 billion worth of stock.
Separately, based on the counter-intuitive price action in Treasuries, there was a tolerance for the view that inflation pressures could be peaking, which was espoused by the White House yesterday. Treasury yields were mixed and little changed, which was seen as a source of comfort for the stock market.
The 10-yr yield settled unchanged at 1.49% after trading at 1.51% prior to the CPI data. The 2-yr yield decreased two basis points to 0.66%, even though the report not only supported the case for the Fed be more aggressive with its tapering plan but also to think about hiking rates three times next year.
The U.S. Dollar Index decreased 0.2% to 96.06. WTI crude futures rose 1.2%, or $0.83, to $71.70/bbl.
Reviewing Friday's economic data, which featured the Consumer Price Index for November:
The latest Consumer Price Index (CPI) showed total CPI increased 0.8% month-over-month in November (Briefing.com consensus 0.6%) while core CPI, which excludes food and energy, increased 0.5%, as expected. On a year-over-year basis, total CPI was up 6.8%, versus 6.2% in October, and was the highest it has been since June 1982. Core CPI was up 4.9% year-over-year, versus 4.6% in October.
There isn't just one key takeaway from this report. There are many:
The Fed totally missed the mark with its transitory inflation view.
The inflation data make it clear that the Fed is going to announce a more aggressive tapering path at next week's FOMC meeting.
These data should stir concerns about a third rate hike being in the mix for 2022.
Inflation pressures are broad based.
Nominal wage gains will be undercut by inflation that will limit real spending growth potential.
The elevated inflation print will stand as a political pressure point.
The preliminary December University of Michigan Index of Consumer Sentiment increased to 70.4 (Briefing.com consensus 68.0) from the final November reading of 67.4.
The key takeaway from the report is the finding that inflation, versus unemployment, was seen as the more serious risk to the economy across all income, age, education, region, and political subgroups.
The U.S. Treasury reported a $191.3 bln deficit for November to follow last month's $165.06 bln deficit. The deficit one year ago was $145.27 bln.
There is no economic data scheduled for Monday.
S&P 500 +25.5% YTD
Nasdaq Composite +21.3% YTD
Dow Jones Industrial Average +17.5% YTD
Russell 2000 +12.0% YTD
Crude futures settle higher
10-Dec-21 15:30 ET
Dow +147.88 at 35902.57, Nasdaq +56.89 at 15574.25, S&P +31.06 at 4698.51
[BRIEFING.COM] The S&P 500 is up 0.7% and is vying for a record close, which is about six points higher than the current level.
One last look at the sectors shows information technology (+1.6%) and consumer staples (+1.9%) leading the advance with gains over 1.5%. The communication services (-0.1%) and financials (-0.1%) sectors trade lower.
WTI crude futures settled higher by 1.2%, or $0.83, to $71.70/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35754.69 -0.06 (0.00%)
Nasdaq 15517.36 -269.62 (-1.71%)
SP 500 4667.45 -33.76 (-0.72%)
10-yr Note +4/32 1.488
NYSE Adv 810 Dec 2467 Vol 819.9 mln
Nasdaq Adv 1153 Dec 3464 Vol 4.4 bln
Industry Watch
Strong: Health Care, Consumer Staples
Weak: Consumer Discretionary, Information Technology, Real Estate
Moving the Market
-- Market closes lower in consolidation trade
-- Fatigue and a sense of caution in front of CPI report tomorrow
-- Relative strength in the Dow, weakness in growth stocks
Market closes lower in consolidation trade
09-Dec-21 16:20 ET
Dow -0.06 at 35754.69, Nasdaq -269.62 at 15517.36, S&P -33.76 at 4667.45
[BRIEFING.COM] The S&P 500 declined 0.7% on Thursday, as the market consolidated its gains from the prior three days. The Nasdaq Composite (-1.7%) and Russell 2000 (-2.3%) struggled with steeper losses, while the Dow Jones Industrial Average (unch) closed flat after being down 0.5% intraday.
Nine of the 11 S&P 500 sectors closed lower, including the consumer discretionary (-1.7%), information technology (-1.1%), and real estate (-1.4%) sectors with losses over 1.0%. The defensive-oriented health care (+0.3%) and consumer staples (+0.1%) sectors closed higher.
Fatigue seemed to reign in the market on the recognition that the S&P 500 gained 3.6% over the past three days and Apple (AAPL 174.56, -0.52, -0.3%) gained 11.2% over the same period. Apple lost 0.3% today, even though Morgan Stanley named the stock a Top Pick for 2022 with a Street-high price target of $200.
The biggest gainers between Monday and Wednesday were the biggest losers today, and those were typically the risker stocks in the Nasdaq and Russell 2000. The ARK Innovation ETF (ARKK 97.73, -5.49, -5.3%), which entered the session up 10% for the week, declined 5% today.
In addition, there was a sense of caution in front of the Consumer Price Index report for November, which will be released tomorrow morning. Longer-dated Treasuries edged higher, the CBOE Volatility Index rose 8.4% to 21.58, and the U.S. Dollar Index rose 0.4% to 96.23.
The 10-yr yield decreased two basis points to 1.49% despite weekly initial claims falling to their lowest level (184,000) since Sept. 6, 1969. The 2-yr yield was unchanged at 0.68%. WTI crude futures fell 2.2%, or $1.56, to $70.87/bbl.
In other developments, the Senate passed a procedural bill to allow the debt ceiling to be raised by a fixed amount, and the FDA expanded the eligibility for the Pfizer (PFE 52.08, +0.68, +1.3%)-BioNTech (BNTX 284.21, -7.73, -2.7%) COVID-19 booster shot to 16- and 17-year-olds.
CVS Health (CVS 97.31, +4.21, +4.5%) was an individual standout after providing upbeat guidance and authorizing a $10 billion share repurchase program.
Reviewing Thursday's economic data:
Initial claims for the week ending December 4 dropped by 43,000 to 184,000 (Briefing.com consensus 228,000). That is the lowest level since September 6, 1969. Continuing claims for the week ending November 27 increased by 38,000 to 1.992 million.
The key takeaway from the report is that seasonal factors had a lot to do with the sizable drop in initial claims. On an unadjusted basis, initial claims increased by 63,680 to 280,665.
Wholesale inventories increased 2.3% m/m in October (Briefing.com consensus 2.2%) following a 1.4% increase in September.
Looking ahead, investors will receive the Consumer Price Index for November, the preliminary University of Michigan Index of Consumer Sentiment for December, and the Treasury Budget for November on Friday.
S&P 500 +24.3% YTD
Nasdaq Composite +20.4% YTD
Dow Jones Industrial Average +16.8% YTD
Russell 2000 +12.4% YTD
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35754.75 +35.32 (0.10%)
Nasdaq 15786.98 +100.07 (0.64%)
SP 500 4701.21 +14.46 (0.31%)
10-yr Note -26/32 1.520
NYSE Adv 2020 Dec 1258 Vol 877.3 mln
Nasdaq Adv 3051 Dec 1563 Vol 4.6 bln
Industry Watch
Strong: Communication Services, Materials, Real Estate
Weak: Consumer Staples, Financials
Moving the Market
-- Major indices stave off selling interest after a two-day rally
-- Pfizer (PFE) says a third dose of its vaccine neutralizes the Omicron variant, according to preliminary data
-- Treasury yield curve steepens
Market stays committed to the rebound rally amid Pfizer news
08-Dec-21 16:15 ET
Dow +35.32 at 35754.75, Nasdaq +100.07 at 15786.98, S&P +14.46 at 4701.21
[BRIEFING.COM] The stock market closed higher for the third straight day on Wednesday, albeit at a more modest pace. The S&P 500 gained 0.3% and came up short of a closing record high, while the Nasdaq Composite (+0.6%) and Russell 2000 (+0.8%) outperformed in percentage terms. The Dow Jones Industrial Average increased just 0.1%.
Eight of the 11 S&P 500 sectors finished in positive territory, although no sector gained more than 1.0%. The communication services sector led the advance with a 0.8% gain, while the financials (-0.5%), consumer staples (-0.4%) and utilities (-0.1%) sectors closed lower.
Concerns about the Omicron variant were further allayed after Pfizer (PFE 51.40, -0.32, -0.6%) and BioNTech (BNTX 291.94, -10.75, -3.6%) said preliminary data suggested that three doses of their current vaccine neutralize the Omicron variant and that two doses protect against severe disease.
The market's rally in the prior two days was attributed to optimism on the Omicron variant, so the ability for the market to hold steady on good Omicron news today was an encouraging development for buyers. What's more, news that lawmakers are moving closer to raising the debt ceiling tempered another area of concern.
Travel stocks like airlines and cruise lines were among the biggest gainers in the S&P 500, but Apple (AAPL 175.08, +3.90, +2.3%), Tesla (TSLA 1068.96, +17.21, +1.6%), and Meta Platforms (FB 330.56, +7.75, +2.4%) were among the more influential gainers. AAPL set an all-time high.
Improved expectations for the economy were also manifested in higher prices for WTI crude ($72.43/bbl, +0.48, +0.7%) and copper ($4.395/lb, +0.05, +1.3%), as well as curve-steepening activity in the Treasury market.
The 10-yr yield rose three basis points to 1.51% after dipping below 1.43% prior to the Pfizer-BioNTech news. The 2-yr yield decreased one basis point to 0.68%, even though the vaccine news supported the case for the Fed to consider a faster taper plan. The U.S. Dollar Index fell 0.5% to 95.91.
The CBOE Volatility Index dropped below the 20.00 level (19.90, -1.99, -9.1%), as the continued resiliency in the market staved off hedging interest.
Reviewing Wednesday's economic data:
Job openings increased to 11.033 million in October from a revised 10.602 million (from 10.438 million) in September.
The weekly MBA Mortgage Applications Index increased 2.0% following a 7.2% decline in the prior week.
Weekly crude oil inventories decreased by 240,000 barrels after decreasing by 910,000 barrels during the previous week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report and Wholesale Inventories for October on Thursday.
S&P 500 +25.2% YTD
Nasdaq Composite +22.5% YTD
Dow Jones Industrial Average +16.8% YTD
Russell 2000 +15.0% YTD
Crude futures settle higher
08-Dec-21 15:30 ET
Dow +33.55 at 35752.98, Nasdaq +83.49 at 15770.40, S&P +12.16 at 4698.91
[BRIEFING.COM] The S&P 500 is trading at session highs with a 0.3% gain. It's trading about five points below its closing record high (4704.54).
One last look at the S&P 500 sectors shows communication services (+0.7%) and real estate (+0.6%) outperforming with modest gains, while the financials (-0.2%) and consumer staples (-0.4%) sectors are the only sectors trading lower.
WTI crude futures settled higher by 0.7%, or $0.48, to $72.43/bbl. On a related note, weekly crude oil inventories decreased by 240,000 barrels after decreasing by 910,000 barrels during the previous week.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35719.43 +492.40 (1.40%)
Nasdaq 15686.91 +461.76 (3.03%)
SP 500 4686.75 +95.08 (2.07%)
10-yr Note -10/32 1.480
NYSE Adv 2590 Dec 690 Vol 1.02 bln
Nasdaq Adv 3433 Dec 1121 Vol 5.00 bln
Industry Watch
Strong: Technology, Financials, Energy, Consumer Discretionary
Weak: Consumer Staples, Utilities
Moving the Market
Stocks extend Monday's rebound
Crude oil nearing last week's high
Rebound Rally Accelerates
07-Dec-21 16:10 ET
Dow +492.40 at 35719.43, Nasdaq +461.76 at 15686.91, S&P +95.08 at 4686.75
[BRIEFING.COM] The major averages built on their gains from Monday with the S&P 500 (+2.1%) jumping to within 60 points of its record high from two weeks ago. The Nasdaq (+3.0%) outperformed after lagging yesterday while the Dow (+1.4%) finished behind the benchmark index after showing relative strength on Monday.
The bulk of the Tuesday rally unfolded at the open, as stocks jumped out of the gate after an upbeat session in global equity markets. The S&P 500 reached its best level of the session just after 11:00 ET, drifting just below that high into the close. The benchmark index finished at its best level since November 24 while the Dow and Nasdaq reclaimed their respective 50-day moving averages.
All eleven sectors ended in the green with nine groups recording gains of 1.0% or more. Top-weighted technology (+3.5%) held the lead throughout the day while energy (+2.3%) and consumer discretionary (+2.4%) finished in the next two spots.
The technology sector rallied behind chipmakers, as the PHLX Semiconductor Index rose 5.0%. Top component NVIDIA (NVDA 324.27, +23.90, +8.0%) was the best performer in the group while Intel (INTC 52.57, +1.58, +3.1%) rallied back above its 50-day moving average (51.33) after confirming plans for a spin-off of its Mobileye unit, which is valued at about $50 bln.
All but six components of the tech sector finished in the green while Western Union (WU 17.35, -0.50, -2.8%) was the weakest performer, giving back yesterday's gain.
Like technology, the energy sector spent the session near the top of the leaderboard thanks to a rally in crude oil, which rose $2.36, or 3.4%, to $71.95/bbl, climbing past its 200-day moving average (69.98). Oil backpedaled from its midday high after a brief push past last Monday's high (72.93).
The consumer discretionary sector was the only other group to gain 2.0% or more with leadership from AutoZone (AZO 2023.57, +143.58, +7.6%) after the company beat Q1 expectations. The stock rallied to a fresh record, as did seven other components of the discretionary sector.
The Dow Jones Transportation Average (+0.2%) was one of few soft spots today as airline stocks pulled back from yesterday's rally, masking gains in more than half of the remaining DJTA components.
In Washington, House Speaker Pelosi said that her chamber will vote today evening on a plan to increase the debt limit. Meanwhile, Senate Minority Leader McConnell said that a "solution" to the debt ceiling issue has been reached. President Biden spoke with Russian President Putin, warning that the U.S. and allies would "respond with strong economic and other measures in the event of military escalation" in Ukraine, according to a statement from the White House.
Treasuries retreated, sending the 10-yr yield higher by five basis points to 1.48% with its 200-day moving average (1.493%) looming just above.
Reviewing today's economic data:
The October Trade Balance Report showed a narrowing in the deficit to $67.1 billion (Briefing.com consensus -$66.8 billion) from a downwardly revised $81.4 billion (from $80.9 billion) in September, with exports up $16.8 billion and imports up $2.5 billion from September levels.
The key takeaway from the report is the uptick in both exports and imports, which is a good sign of increased economic activity on a global basis. Exports to China increased $2.8 billion and exports to the European Union increased $1.6 billion.
The revised Q3 Productivity and Unit Labor Costs report showed productivity being revised down to -5.2% (Briefing.com consensus -4.9%) from the advance estimate of -5.0%. That is the largest decline in productivity since the second quarter of 1960. Unit labor costs were revised up to 9.6% (Briefing.com consensus 8.2%) from 8.3%.
The key takeaway from the report is the connection between weakening productivity and rising costs, which isn't a good combination for company profits.
Consumer credit increased by $16.9 bln in October after increasing a downwardly revised $27.8 bln (from $29.9 bln) in September.
Tomorrow, the weekly MBA Mortgage Index (prior -7.2%) will be released at 7:00 ET, followed by JOLTS -- Job Openings (prior 10.438 mln) at 10:00 ET.
S&P 500 +24.8% YTD
Nasdaq Composite +21.7% YTD
Dow Jones Industrial Average +16.7% YTD
Russell 2000 +14.1% YTD
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35719.43 +492.40 (1.40%)
Nasdaq 15686.91 +461.76 (3.03%)
SP 500 4686.75 +95.08 (2.07%)
10-yr Note -10/32 1.480
NYSE Adv 2590 Dec 690 Vol 1.02 bln
Nasdaq Adv 3433 Dec 1121 Vol 5.00 bln
Industry Watch
Strong: Technology, Financials, Energy, Consumer Discretionary
Weak: Consumer Staples, Utilities
Moving the Market
Stocks extend Monday's rebound
Crude oil nearing last week's high
Rebound Rally Accelerates
07-Dec-21 16:10 ET
Dow +492.40 at 35719.43, Nasdaq +461.76 at 15686.91, S&P +95.08 at 4686.75
[BRIEFING.COM] The major averages built on their gains from Monday with the S&P 500 (+2.1%) jumping to within 60 points of its record high from two weeks ago. The Nasdaq (+3.0%) outperformed after lagging yesterday while the Dow (+1.4%) finished behind the benchmark index after showing relative strength on Monday.
The bulk of the Tuesday rally unfolded at the open, as stocks jumped out of the gate after an upbeat session in global equity markets. The S&P 500 reached its best level of the session just after 11:00 ET, drifting just below that high into the close. The benchmark index finished at its best level since November 24 while the Dow and Nasdaq reclaimed their respective 50-day moving averages.
All eleven sectors ended in the green with nine groups recording gains of 1.0% or more. Top-weighted technology (+3.5%) held the lead throughout the day while energy (+2.3%) and consumer discretionary (+2.4%) finished in the next two spots.
The technology sector rallied behind chipmakers, as the PHLX Semiconductor Index rose 5.0%. Top component NVIDIA (NVDA 324.27, +23.90, +8.0%) was the best performer in the group while Intel (INTC 52.57, +1.58, +3.1%) rallied back above its 50-day moving average (51.33) after confirming plans for a spin-off of its Mobileye unit, which is valued at about $50 bln.
All but six components of the tech sector finished in the green while Western Union (WU 17.35, -0.50, -2.8%) was the weakest performer, giving back yesterday's gain.
Like technology, the energy sector spent the session near the top of the leaderboard thanks to a rally in crude oil, which rose $2.36, or 3.4%, to $71.95/bbl, climbing past its 200-day moving average (69.98). Oil backpedaled from its midday high after a brief push past last Monday's high (72.93).
The consumer discretionary sector was the only other group to gain 2.0% or more with leadership from AutoZone (AZO 2023.57, +143.58, +7.6%) after the company beat Q1 expectations. The stock rallied to a fresh record, as did seven other components of the discretionary sector.
The Dow Jones Transportation Average (+0.2%) was one of few soft spots today as airline stocks pulled back from yesterday's rally, masking gains in more than half of the remaining DJTA components.
In Washington, House Speaker Pelosi said that her chamber will vote today evening on a plan to increase the debt limit. Meanwhile, Senate Minority Leader McConnell said that a "solution" to the debt ceiling issue has been reached. President Biden spoke with Russian President Putin, warning that the U.S. and allies would "respond with strong economic and other measures in the event of military escalation" in Ukraine, according to a statement from the White House.
Treasuries retreated, sending the 10-yr yield higher by five basis points to 1.48% with its 200-day moving average (1.493%) looming just above.
Reviewing today's economic data:
The October Trade Balance Report showed a narrowing in the deficit to $67.1 billion (Briefing.com consensus -$66.8 billion) from a downwardly revised $81.4 billion (from $80.9 billion) in September, with exports up $16.8 billion and imports up $2.5 billion from September levels.
The key takeaway from the report is the uptick in both exports and imports, which is a good sign of increased economic activity on a global basis. Exports to China increased $2.8 billion and exports to the European Union increased $1.6 billion.
The revised Q3 Productivity and Unit Labor Costs report showed productivity being revised down to -5.2% (Briefing.com consensus -4.9%) from the advance estimate of -5.0%. That is the largest decline in productivity since the second quarter of 1960. Unit labor costs were revised up to 9.6% (Briefing.com consensus 8.2%) from 8.3%.
The key takeaway from the report is the connection between weakening productivity and rising costs, which isn't a good combination for company profits.
Consumer credit increased by $16.9 bln in October after increasing a downwardly revised $27.8 bln (from $29.9 bln) in September.
Tomorrow, the weekly MBA Mortgage Index (prior -7.2%) will be released at 7:00 ET, followed by JOLTS -- Job Openings (prior 10.438 mln) at 10:00 ET.
S&P 500 +24.8% YTD
Nasdaq Composite +21.7% YTD
Dow Jones Industrial Average +16.7% YTD
Russell 2000 +14.1% YTD
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35227.03 +646.95 (1.87%)
Nasdaq 15225.15 +139.68 (0.93%)
SP 500 4591.67 +53.24 (1.17%)
10-yr Note -25/32 1.434
NYSE Adv 2425 Dec 839 Vol 1.05 bln
Nasdaq Adv 2889 Dec 1666 Vol 5.05 bln
Industry Watch
Strong: Energy, Consumer Staples, Real Estate, Utilities, Financials, Industrials
Weak: Health Care, Technology
Moving the Market
Stocks bounce as Omicron-related concerns recede
Crude oil rebounding toward 200-day moving average (69.92)
Dow and S&P 500 Reclaim Friday Losses
06-Dec-21 16:20 ET
Dow +646.95 at 35227.03, Nasdaq +139.68 at 15225.15, S&P +53.24 at 4591.67
[BRIEFING.COM] The stock market began the week on a strong note with the S&P 500 (+1.2%) reclaiming its entire loss from Friday. The Dow (+1.9%) fared even better, rising to a one-week high, while the Nasdaq (+0.9%) managed a firmly higher close after revisiting Friday's low in early trade.
Equities benefited from an improvement in sentiment after the weekend went by without any ominous reports related to the Omicron variant of the coronavirus. This opened the door to a rebound in areas that faced the most pressure in recent days with the S&P 500 reclaiming its 50-day moving average.
All eleven sectors ended the day in positive territory with nine groups gaining at least 1.0%. The energy sector (+1.5%) finished near the top of the leaderboard thanks to a daylong rally in crude oil. WTI crude climbed $3.21, or 4.84%, to $69.59/bbl, finishing the pit session just below its 200-day moving average (69.93), which offered resistance over the past week.
The rebound in crude did not get in the way of a rally in airline stocks, as they extended their bounce off last week's lows on a receding probability of additional travel restrictions. United Airlines (UAL 43.99, +3.38, +8.3%), American Airlines (AAL 17.93, +1.31, +7.9%), and Delta Air Lines (DAL 38.14, +2.16, +6.0%) were the top performers in the industrials sector (+1.6%), which finished atop today's leaderboard. The outperformance in airline stocks had a bigger impact on the Dow Jones Transportation Average (+2.3%), lifting the group to a one-week high.
Other growth-sensitive sectors like financials (+1.4%) and materials (+1.5%) also finished ahead of the broader market while top-weighted technology (+1.0%) underperformed throughout the day, but still ended firmly in the green.
The tech sector recovered from a weak start that was owed to notable losses among chipmakers, but the PHLX Semiconductor Index ended lower by just 0.1% after being down more than 3.0% at the open. Roughly half of the group's components ended in the red while Intel (INTC 50.99, +1.74, +3.5%) was the top performer, rallying toward its 50-day moving average (51.38). The chip giant confirmed plans to hold a press conference at the Consumer Electronics Show on January 4, while competitor AMD (AMD 139.06, -4.95, -3.4%) is also planning a press conference for January 4, but its event will not be an official part of CES, inviting speculation that the company is not yet ready to unveil a response to Intel's recently-launched 12th generation of CPUs.
The health care sector (+0.5%) was the weakest performer, spending the bulk of the day at the bottom of the leaderboard. Most components finished in the green, but their gains were largely offset by a loss in Pfizer (PFE 51.48, -2.79, -5.1%) as the stock deepened its pullback from a record high.
Treasuries finished near their lows with the 10-yr yield rising nine basis points to 1.43%.
In Washington, President Biden is expected to speak with Russian President Putin amid reports of the intelligence community's concern that Russia will escalate its conflict with Ukraine in the coming months.
Tomorrow's economic data will include October Trade Balance (Briefing.com consensus -$66.80 bln; prior -$80.90 bln), revised Q3 Productivity (Briefing.com consensus -4.9%; prior -5.0%), and revised Q3 Unit Labor Costs (Briefing.com consensus 8.2%; prior 8.3%) at 8:30 ET, followed by October Consumer Credit (prior $29.90 bln) at 15:00 ET.
S&P 500 +22.3% YTD
Nasdaq Composite +18.1% YTD
Dow Jones Industrial Average +15.1% YTD
Russell 2000 +11.6% YTD
Crude Oil Nears 200-Day Average
06-Dec-21 15:35 ET
Dow +638.60 at 35218.68, Nasdaq +145.89 at 15231.36, S&P +53.89 at 4592.32
[BRIEFING.COM] The S&P 500 trades higher by 1.2% with 30 minutes remaining in the session. The benchmark index currently hovers just few points above its opening level from Friday after briefly overtaking Friday's high in midday trade.
All eleven sectors continue trading higher with ten groups up 1.0% or more. However, only the energy sector (+2.0%) is currently up more than 1.8%.
The energy sector rallied to a fresh high as crude oil padded its gain ahead of the pit close. The energy component gained $3.21, or 4.8%, rising to $69.59/bbl with its 200-day moving average (69.93) looming just above.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34580.08 -59.71 (-0.17%)
Nasdaq 15085.47 -295.85 (-1.92%)
SP 500 4538.43 -38.67 (-0.84%)
10-yr Note +23/32 1.343
NYSE Adv 877 Dec 2340 Vol 1.10 bln
Nasdaq Adv 1006 Dec 3461 Vol 5.81 bln
Industry Watch
Strong: Energy, Consumer Staples, Materials
Weak: Financials, Technology, Consumer Discretionary, Communication Services
Moving the Market
November jobs report misses headline estimates
Congress passes another short-term funding bill
Oil rising toward its 200-day moving average (69.90)
Down Week Ends on Lower Note
03-Dec-21 16:15 ET
Dow -59.71 at 34580.08, Nasdaq -295.85 at 15085.47, S&P -38.67 at 4538.43
[BRIEFING.COM] The major averages finished the week on an uninspiring note with the Nasdaq (-1.9%) pacing a daylong retreat while the S&P 500 (-0.8%) and Dow (-0.2%) recorded slimmer losses. The three indices lost a respective 2.6%, 1.2%, and 0.9% for the week.
Small caps fared even worse with the Russell 2000 (-2.1%) falling 3.9% for the week.
The sharply lower finish represented a turn from the market's higher open, which followed the release of the Employment Situation report for November. The report missed headline estimates but also contained some positive elements like upward revisions to October figures and a drop in the unemployment rate.
The headline miss in the jobs report opened the door to an argument against accelerating the Fed's taper, but the market will need to see more before reversing its expectations for tighter policy in 2022, as the implied likelihood of a rate hike in June ticked up to 73.0% from 69.9% yesterday and 62.3% one week ago.
Eight sectors ended the day in negative territory with three losing 1.0% or more. The consumer discretionary sector (-1.8%) finished at the bottom of the leaderboard, right behind technology (-1.7%) and financials (-1.5%).
Growth stocks were among today's big losers with the likes of Microsoft (MSFT 323.01, -6.48, -2.0%), NVIDIA (NVDA 306.93, -14.33, -4.5%), Amazon (AMZN 3389.79, -47.57, -1.4%), and Tesla (TSLA 1014.97, -69.63, -6.4%) falling between 1.4% and 6.4%. NVIDIA's underperformance followed news that the FTC sued to block the company from completing its $40 bln acquisition of Arm Holdings.
Besides NVIDIA, roughly 2/3 of the components of the PHLX Semiconductor Index (-0.2%) finished in the red, but the but the index outperformed thanks to a spike to a fresh record in Marvell (MRVL 83.59, +12.56, +17.7%). The stock rallied after the company beat Q3 expectations and issued above-consensus guidance for Q4.
In other earnings, DocuSign (DOCU 135.09, -98.73, -42.2%) dove to its lowest level since mid-2020 after its Q3 beat was overshadowed by weak revenue guidance for Q4.
Treasuries faced some selling during the first hour of trade, but they reversed higher as stocks surrendered their starting gains. The 10-yr yield fell 11 basis points to 1.34%, reaching its lowest level since late September.
In commodities, crude oil fell $0.26, or 0.4%, to $66.38/bbl, surrendering $1.79, or 2.6% for the week.
Reviewing today's economic data:
November nonfarm payrolls increased by 210,000 (Briefing.com consensus 525,000). The 3-month average for total nonfarm payrolls decreased to 378,000 from 469,000 in October. October nonfarm payrolls revised to 546,000 from 531,000. September nonfarm payrolls revised to 379,000 from 312,000
November private sector payrolls increased by 235,000 (Briefing.com consensus 500,000). October private sector payrolls revised to 628,000 from 604,000. September private sector payrolls revised to 424,000 from 365,000
November unemployment rate was 4.2% (Briefing.com consensus 4.5%), versus 4.6% in October. Persons unemployed for 27 weeks or more accounted for 32.1% of the unemployed versus 31.6% in October. The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 7.8%, versus 8.3% in October
November average hourly earnings increased 0.3% (Briefing.com consensus 0.4%) versus a 0.4% increase in October. Over the last 12 months, average hourly earnings have risen 4.8%, versus 4.8% for the 12 months ending in October
The average workweek in November was 34.8 hours (Briefing.com consensus 34.7), versus 34.7 hours in October. Manufacturing workweek increased 0.1 hours to 40.4 hours. Factory overtime was unchanged at 3.2 hours
The labor force participation rate increased to 61.8% from 61.6%. o The employment-population ratio increased to 59.2% from 58.8% in October.
The ISM Non-Manufacturing Index for November increased to a record high 69.1% (Briefing.com consensus 65.0%) from 66.7% in October. The dividing line between expansion and contraction is 50.0%. The November reading marks the 18th straight month of growth for the services sector
The key takeaway from the report is the understanding that demand shows no signs of slowing and services sector activity, which comprises the largest swath of economic activity, continues to run at a record pace even with the constraints of labor shortages, logistics problems, and difficulty in obtaining materials
The IHS Markit Services PMI rose to 58.0 in the final reading for November from 57.0 in the preliminary reading but was down from October's final reading of 58.7
Factory orders for manufactured goods increased 1.0% m/m in October (Briefing.com consensus +0.4%) following an upwardly revised 0.5% increase (from 0.2%) in September. Shipments of manufactured goods jumped 2.0% after increasing 1.0% in September
The key takeaway from the report is that the pace of order growth remained positive for nondefense capital goods, excluding aircraft -- a proxy for business spending
The market will not receive any notable data on Monday.
S&P 500 +20.8% YTD
Nasdaq Composite +17.1% YTD
Dow Jones Industrial Average +13.0% YTD
Russell 2000 +9.3% YTD
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34639.79 +617.75 (1.82%)
Nasdaq 15381.34 +127.27 (0.83%)
SP 500 4577.10 +64.06 (1.42%)
10-yr Note -3/32 1.435
NYSE Adv 2434 Dec 836 Vol 1.1 bln
Nasdaq Adv 2800 Dec 1585 Vol 5.3 bln
Industry Watch
Strong: Energy, Financials, Industrials, Real Estate, Materials
Weak: Health Care
Moving the Market
-- Stocks try to rebound again with value stocks outperforming growth stocks
-- Apple (AAPL) tells suppliers it's seeing less demand for the iPhone 13, according to Bloomberg
-- S&P 500 reclaims 50-day moving average (4543)
-- Omicron concerns tempered
Stocks close higher in cyclically-led rebound
02-Dec-21 16:20 ET
Dow +617.75 at 34639.79, Nasdaq +127.27 at 15381.34, S&P +64.06 at 4577.10
[BRIEFING.COM] The S&P 500 rose 1.4% on Thursday, bouncing back from two days of sharp losses. The Dow Jones Industrial Average (+1.8%) and Russell 2000 (+2.7%) outperformed the benchmark index, while the Nasdaq Composite underperformed on a relative basis with a 0.8% gain.
Supportive factors included 1) a bargain-hunting mindset amid an increasing number of stocks trading near 52-week lows, 2) a view that the Omicron variant might not be as bad as feared after the second reported case in the U.S. produced mild symptoms in a vaccinated person like the first case, and 3) a recognition that the S&P 500 reclaimed its 50-day moving average (4543).
All 11 S&P 500 sectors closed higher, featuring leadership positions from the cyclical industrials (+2.9%), energy (+2.9%), financials (+2.8%), and materials (+2.0%) sectors. The information technology (+0.8%), consumer staples (+0.8%), and health care (+0.4%) sectors trailed with more modest gains.
The relative underperformance of the Nasdaq was due to softness in Apple (AAPL 163.76, -1.01, -0.6%), Microsoft (MSFT 329.49, -0.59, -0.2%), Amazon.com (AMZN 3437.36, -6.36, -0.2%), Tesla (TSLA 1084.60, -10.40, -1.0%), and Facebook (FB 310.39, -0.21, -0.1%).
Apple was pressured by a report from Bloomberg indicating that the company told suppliers that demand for the iPhone 13 has weakened. AAPL shares declined 0.6%, but they were down as much as 4.2% shortly after the open.
Boeing (BA 202.38, +14.19, +7.5%) stood out with a 7.5% gain on news that China may soon allow the 737 MAX to return to flight. Snowflake (SNOW 360.38, +49.28, +15.9%) and Kroger (KR 44.65, +4.44, +11.0%) rallied noticeably following their earnings reports.
Elsewhere, the Treasury yield curve experienced some flattening activity amid a rise in shorter-dated rates. The 2-yr yield increased five basis points to 0.61%, and the 10-yr yield increased one basis point to 1.45%. The U.S. Dollar Index increased 0.1% to 96.14. WTI crude futures settled higher by 1.6%, or $1.03, to $66.64/bbl.
Strikingly, WTI crude futures were down more than 4.0% immediately after it was reported that OPEC+ agreed to stick to its planned production schedule for January. There was some speculation that the ministers would adjust production because of the Omicron variant and the U.S.-led effort for nations to tap into their oil reserves.
Reviewing Thursday's economic data:
For the week ending November 27, initial jobless claims increased by 28,000 to 222,000 (Briefing.com consensus 255,000). Continuing claims for the week ending November 20 decreased by 107,000 to 1.956 million.
The key takeaway from the report is that initial jobless claims are firming up at lower levels seen before the start of the pandemic.
Looking ahead to Friday, investors will receive the Employment Situation Report for November, the ISM Non-Manufacturing Index for November, Factory Orders for October, and the final IHS Markit Services PMI for November.
S&P 500 +21.9% YTD
Nasdaq Composite +19.3% YTD
Dow Jones Industrial Average +13.2% YTD
Russell 2000 +11.7% YTD
FTC sues to block NVIDIA's acquisition of Arm Holdings
02-Dec-21 15:30 ET
Dow +664.06 at 34686.10, Nasdaq +128.51 at 15382.58, S&P +69.36 at 4582.40
[BRIEFING.COM] The S&P 500 continues to trade higher by 1.5% and is on track to close above its 50-day moving average (4543).
The FTC recently announced that it's suing to block NVIDIA's (NVDA 320.29, +5.93, +1.9%) $40 billion acquisition of Arm Holdings for anti-competitive reasons. NVIDA shares have pared gains but are still up 2% despite the news.
WTI crude futures settled higher by 1.6%, or $1.03, to $66.64/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34022.04 -461.68 (-1.34%)
Nasdaq 15254.07 -283.64 (-1.83%)
SP 500 4513.04 -53.96 (-1.18%)
10-yr Note +3/32 1.420
NYSE Adv 912 Dec 2365 Vol 1.1 bln
Nasdaq Adv 1014 Dec 3302 Vol 6.2 bln
Industry Watch
Strong: Utilities
Weak: Consumer Discretionary, Communication Services, Information Technology
Moving the Market
-- Major indices fade early rally effort
-- First case of the Omicron variant in the U.S. is detected
-- salesforce.com (CRM) holds back Dow on disappointing guidance
-- Relatively encouraging economic data
Stocks close sharply lower in disappointing session
01-Dec-21 16:20 ET
Dow -461.68 at 34022.04, Nasdaq -283.64 at 15254.07, S&P -53.96 at 4513.04
[BRIEFING.COM] The S&P 500 fell 1.2% on Wednesday after being up 1.9% intraday, as momentum faded and news of the first reported case of the Omicron variant in the U.S. weighed on sentiment. Stocks closed at session lows amid a wave of selling interest in the final minutes of the session.
The Dow Jones Industrial Average fell 1.3%, the Nasdaq Composite fell 1.8%, and Russell 2000 lost 2.3%.
The major indices were up as much as 1.5-2.5% intraday, purportedly as concerns about the Omicron variant and the Fed's policy course were set aside and investors put new money to work on the first day of the month. There were suspicions, though, if the market's rally had a firm foundation for sustained gains given the recent volatility.
All 11 S&P 500 sectors were trading higher, but only one escaped with a gain. The consumer discretionary (-1.9%) and communication services (-2.0%) sectors led the retreat with 2% declines, while the utilities sector (+0.2%) managed to close higher.
High-beta growth stocks were among the weakest performers, receiving little support from a decline in long-term interest rates. The 10-yr yield declined one basis point to 1.43% after hitting 1.50% overnight.
The ARK Innovation ETF (ARKK 98.60, -7.09, -6.7%), which contains many high-growth story stocks, fell 6.7% as investors shied away from riskier equities. Dow component salesforce.com (CRM 251.50, -33.46, -11.7%) struggled all session and closed lower by 11.7% after providing disappointing guidance.
Value stocks outperformed on a relative basis, but it probably wasn't because of the better-than-expected November ADP Employment Change report and ISM Manufacturing Index since cyclical stocks struggled. Instead, many of the defensive value stocks in the health care and consumer staples industries did okay today.
The 2-yr yield rose four basis points to 0.56% as the market continued to signal expectations for the Fed to tighten policy more quickly. The U.S. Dollar Index increased 0.1% to 96.08. WTI crude futures fell 0.8%, or $0.53, to $65.61/bbl after being up more than 4.0% early in the session.
Reviewing Wednesday's economic data:
The November ISM Manufacturing Index checked in at 61.1% (Briefing.com consensus 61.0%), up slightly from 60.8% in October. A number above 50.0% is indicative of expansion. November marked the 18th straight month of expansion for the manufacturing sector.
The key takeaway from the report is that manufacturing activity is still running at a good clip despite supply chain, transportation, and labor constraints; meanwhile, it was noted that manufacturers' sentiment remains strongly optimistic.
Total construction spending increased 0.2% month-over-month in October (Briefing.com consensus +0.4%) following a downwardly revised 0.1% decline (from 0.0%) in September. Total private construction declined 0.2% month-over-month while total public construction spending increased 1.8%.
The key takeaway from the report is the decline seen in new single family and multifamily construction. That is most likely the consequence of ongoing supply chain pressures, labor constraints, and higher costs for builders that are standing in the way of building more affordable homes.
The ADP Employment Change report estimated 534,000 jobs were added to private-sector payrolls in November (Briefing.com consensus 515,000). The increase in October was downwardly revised to 570,000 from 571,000.
The final IHS Market Manufacturing PMI for November checked in at 58.3, down from 59.1 in the preliminary reading.
The weekly MBA Mortgage Applications Index fell 7.2% following a 1.8% increase in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report on Thursday.
S&P 500 +20.2% YTD
Nasdaq Composite +18.4% YTD
Dow Jones Industrial Average +11.2% YTD
Russell 2000 +8.7% YTD
Crude futures also fade early gain
01-Dec-21 15:30 ET
Dow -205.00 at 34278.72, Nasdaq -177.94 at 15359.77, S&P -18.76 at 4548.24
[BRIEFING.COM] The S&P 500 is down 0.4% to trade at session lows. The Russell 2000 is underperforms with a 1.2% decline.
Looking at the sectors shows consumer discretionary (-1.2%) and communication services (-1.2%) leading the decline with losses over 1.0%. The health care (+0.5%), consumer staples (+0.5%), and utilities (+1.0%) sectors are the only sectors trading higher.
WTI crude futures settled lower by 0.8%, or $0.53, to $65.61/bbl after being up more than 4.0% early in the session.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34483.33 -652.61 (-1.86%)
Nasdaq 15537.71 -245.14 (-1.55%)
SP 500 4567.00 -88.27 (-1.90%)
10-yr Note +28/32 1.432
NYSE Adv 687 Dec 2646 Vol 2.0 bln
Nasdaq Adv 1404 Dec 2974 Vol 6.4 bln
Industry Watch
Strong: Information Technology
Weak: Communication Services, Utilities, Financials
Moving the Market
-- Market closes sharply lower on comments from Fed Chair Powell and Moderna (MRNA)
-- Fed Chair Powell says it's a good time to retire the word "transitory" and suggests its appropriate to taper more quickly
-- Moderna expects current vaccines to be materially less effective against the Omicron variant
Tough day for stocks amid comments from Powell and Moderna
30-Nov-21 16:20 ET
Dow -652.61 at 34483.33, Nasdaq -245.14 at 15537.71, S&P -88.27 at 4567.00
[BRIEFING.COM] The stock market fell sharply on Tuesday, as risk sentiment was first pressured by the Omicron variant and then by commentary from Fed Chair Powell about inflation and monetary policy. The S&P 500 (-1.9%), Dow Jones Industrial Average (-1.9%), and Russell 2000 (-1.9%) each declined 1.9% while the Nasdaq Composite lost 1.6%.
All 11 S&P 500 sectors closed lower with losses ranging from 1.0% (information technology) to 3.0% (communication services). The relative outperformance of the tech sector was due to a 3% gain in Apple (AAPL 165.30, +5.06, +3.2%) amid some defensive positioning, which was further evident in a nine-basis-point decline in the 10-yr yield (1.44%).
The session started modestly lower reportedly after Moderna's (MRNA 352.43, -16.08, -4.4%) CEO told the Financial Times that he expects current vaccines to be materially less effective against the Omicron variant. Notwithstanding similar comments he made to CNBC yesterday, and reports suggesting that vaccines are likely to protect against severe disease, the uncertainty upset the market.
The real weakness, however, came after Fed Chair Powell said it's time to retire the word "transitory" when describing inflation and that it's appropriate to discuss at the next policy meeting about wrapping up the taper more quickly. Mr. Powell testified on the Coronavirus and CARES Act before the Senate Banking Committee.
Investors were caught off guard because there was a thought that the Omicron variant would presumably encourage the Fed to be more patient with tapering. Instead, the Fed chair suggested he was more concerned about tailoring policy to keep inflation pressures in check.
Of course, a speedier taper plan means the Fed could hike rates sooner than previously expected. The CME FedWatch Tool increased the probabilities for a rate hike in May 2022 (44.4%) and June 2022 (69.2%) to levels seen last week.
The fed-funds-sensitive 2-yr yield went from 0.43% to 0.56% during Fed Chair Powell's Q&A session. It eventually settled unchanged at 0.52%. The U.S. Dollar Index fell 0.5% to 95.85. WTI crude futures dropped 5.3%, or $3.70, to $66.14/bbl. The CBOE Volatility Index (27.19, +4.23, +18.4%) jumped above 27.00.
Reviewing Tuesday's economic data:
The Conference Board's Consumer Confidence Index dropped to 109.5 in November (Briefing.com consensus 111.0) from a downwardly revised 111.6 (from 113.8) in October. That is the lowest reading since February 2021.
The key takeaway from the report is that concerns about rising prices and the Delta variant were the drivers of the decline in confidence. With the omicron variant now on the scene and not part of the equation for the November report, one has reason to think that consumer confidence will continue to skew to the cautious side of things.
The Chicago PMI dropped to 61.8 in November (Briefing.com consensus 67.0) from 68.4 in October.
The FHFA Housing Price Index increased 0.9% m/m in September following an unrevised 1.0% increase in August. The S&P Case-Shiller Home Price Index increased 19.1% yr/yr in September (Briefing.com consensus 19.3%) following a revised 19.6% (from 19.7%) increase in August.
Looking ahead to Wednesday, investors will receive the ISM Manufacturing Index for November, Construction Spending for October, the ADP Employment Change report for November, the Fed's Beige Book for December, the weekly MBA Mortgage Applications Index, and the final IHS Markit Manufacturing PMI for November.
S&P 500 +21.6% YTD
Nasdaq Composite +20.6% YTD
Dow Jones Industrial Average +12.7% YTD
Russell 2000 +11.4% YTD
WTI crude futures drop more than 5%
30-Nov-21 15:30 ET
Dow -627.28 at 34508.66, Nasdaq -251.62 at 15531.23, S&P -83.00 at 4572.27
[BRIEFING.COM] The S&P 500 is down 1.8%, in-line with the Dow (-1.8%), amid a dearth of buying interest.
One last look at the sectors shows red across the board with losses ranging from 1.1% (information technology) to 2.7% (communication services).
WTI crude futures settled sharply lower by 5.3%, or $3.70, to $66.14/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35135.94 +236.60 (0.68%)
Nasdaq 15782.85 +291.18 (1.88%)
SP 500 4655.27 +60.65 (1.32%)
10-yr Note -2/32 1.530
NYSE Adv 1787 Dec 1513 Vol 990.6 mln
Nasdaq Adv 1975 Dec 2636 Vol 4.73 bln
Industry Watch
Strong: Energy, Technology, Consumer Discretionary, Utilities, Real Estate
Weak: Consumer Staples, Materials, Industrials, Financials
Moving the Market
Global equities and oil bounce from Friday's slide
Retailers in focus as holiday shopping season begins
Nasdaq Paces Monday Rebound
29-Nov-21 16:15 ET
Dow +236.60 at 35135.94, Nasdaq +291.18 at 15782.85, S&P +60.65 at 4655.27
[BRIEFING.COM] The stock market began the week on a strong note with the Nasdaq (+1.9%) recovering the bulk of its loss from Friday. The S&P 500 (+1.3%) and Dow (+0.7%) recorded slimmer gains, finishing near their opening levels from Friday.
Stocks rallied out of the gate as fears about the omicron coronavirus variant receded since there are no indications that this variant is more dangerous or more transmissible. In addition, the return of participants who were away on Friday contributed to the rebound.
All eleven sectors finished the day with gains. Five sectors added more than 1.0% with technology (+2.6%), consumer discretionary (+1.6%), and utilities (+1.6%) finishing in the lead.
The technology sector built on its gain as the day went on with chipmakers leading the way. The PHLX Semiconductor Index climbed 4.1% with all components rising at least 1.0%. Lam Research (LRCX 680.54, +38.56, +6.0%) was the best performer, rallying to a fresh record high.
Elsewhere in the tech sector, Microsoft (MSFT 336.63, +6.95, +2.1%) recovered its loss from Friday while Twitter (TWTR 45.78, -1.29, -2.7%) rallied out of the gate, but slid back to last week's low as the day went on. The volatility took place after Twitter CEO Dorsey announced his resignation. He will be replaced by the company's current CTO.
The consumer discretionary sector benefited from a strong showing in Tesla (TSLA 1136.99, +55.07, +5.1%) and a rebound in travel-related names like Expedia (EXPE 166.50, +6.70, +4.2%), Marriott (MAR 150.77, +3.33, +2.3%), and Royal Caribbean (RCL 69.89, +1.91, +2.8%). Retail stocks did well, though the SPDR S&P Retail ETF (XRT 96.62, -0.56, -0.6%) ended in the red due to a weak showing from a few of its top components. CNBC reported that retail store traffic on Friday was up nearly 50.0% from last year's levels but down 28.3% from 2019.
Today's rebound rally also boosted the energy sector (+0.6%) and oil, but crude spent the day in a pullback from its morning high while the energy sector followed. Crude oil ended the pit session higher by $1.67, or 2.5%, at $69.84/bbl, sliding back below its 200-day moving average (69.76) after overtaking that mark in the early morning.
The health care sector (+0.4%) finished near the bottom of the leaderboard with Pfizer (PFE 52.40, -1.60, -3.0%) reversing from a record high. The company, alongside Moderna (MRNA 368.51, +38.88, +11.8%), indicated that it can modify its vaccine formulation in a short timeframe, if necessary.
Treasuries ended in the red, but above their opening levels with the 10-yr yield rising five basis points to 1.53%.
Today's economic data was limited to the Pending Home Sales report for October, which showed a 7.5% increase (Briefing.com consensus 0.7%) while the September decrease was revised down to 2.4% from -2.3%.
The September FHFA Housing Price Index (prior 1.0%) and September S&P Case-Shiller Home Price Index (Briefing.com consensus 19.3%; prior 19.7%) will be released tomorrow at 9:00 ET, followed by November Chicago PMI (Briefing.com consensus 67.0; prior 68.4) at 9:45 ET and November Consumer Confidence (Briefing.com consensus 111.0; prior 113.8) at 10:00 ET.
S&P 500 +23.9% YTD
Nasdaq Composite +22.5% YTD
Dow Jones Industrial Average +14.8% YTD
Russell 2000 +13.5% YTD
Crude Oil Trims Intraday Gain
29-Nov-21 15:25 ET
Dow +291.47 at 35190.81, Nasdaq +316.86 at 15808.53, S&P +70.98 at 4665.60
[BRIEFING.COM] The S&P 500 trades higher by 1.6% with 30 minutes remaining in today's session.
All eleven sectors trade firmly higher going into the home stretch with six groups up at least 1.0%. The energy sector (+1.4%) was the best performer at the start, but it has slipped from the top spot as the price of crude retreated from its overnight high.
Crude oil ended the pit session higher by $1.67, or 2.5%, at $69.84/bbl. The energy component rallied past its 200-day moving average (69.76) overnight but slid back below that mark as the day went on.
Chipmakers Ahead
29-Nov-21 14:55 ET
Dow +286.32 at 35185.66, Nasdaq +308.57 at 15800.24, S&P +69.40 at 4664.02
[BRIEFING.COM] The S&P 500 (+1.5%) trades several points below its session high but it also remains several points above its opening high. The Dow (+0.8%) remains behind, sitting about a hundred points below its starting high.
The top-weighted technology sector has extended its gain to 2.7% with the PHLX Semiconductor Index now up 3.6%. Lam Research (LRCX 675.87, +33.69, +5.3%) is the best performer in the group, rallying to a fresh record, while Xilinx (XLNX 232.13, +8.18, +3.6%) is also climbing to a fresh record high.
Elsewhere, Treasuries have ticked down from intraday highs with the 10-yr yield up five basis points at 1.53% after touching 1.51% in the late morning.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34899.34 -905.04 (-2.53%)
Nasdaq 15491.67 -353.57 (-2.23%)
SP 500 4594.62 -106.84 (-2.27%)
10-yr Note +13/32 1.494
NYSE Adv 453 Dec 2769 Vol 741.3 mln
Nasdaq Adv 953 Dec 3399 Vol 3.4 bln
Industry Watch
Strong: Health Care
Weak: Energy, Financials, Industrials, Real Estate, Consumer Discretionary
Moving the Market
-- Omicron variant catalyzes risk-off trade in shortened session
-- Stocks, Treasury yields, and oil prices drop noticeably
-- Strength in vaccine makers and stay-at-home stocks
Omicron variant catalyzes sell-off in shortened session
26-Nov-21 13:20 ET
Dow -905.04 at 34899.34, Nasdaq -353.57 at 15491.67, S&P -106.84 at 4594.62
[BRIEFING.COM] The major indices dropped more than 2.0% on Friday, as investors sold risk assets after the discovery of a highly-mutated variant of COVID-19 in South Africa. The S&P 500 fell 2.3%, the Nasdaq Composite fell 2.2%, and the Dow Jones Industrial Average fell 2.5%. The small-cap Russell 2000 underperformed with a 3.7% decline.
The visceral reaction was linked to uncertainty if the variant (Omicron) is resistant to current vaccines and concerns that it could slow down the global recovery effort. Investors, many of whom were caught off guard, de-risked first and waited for answers later. On a related note, the World Health Organization designated Omicron a "variant of concern."
All 11 S&P 500 sectors closed in negative territory, ten of which fell between 1.4% (consumer staples) and 4.0% (energy). The 10-yr yield was down 16 basis points to 1.49% ahead of the bond market close at 2:00 p.m. ET. WTI crude futures fell 12.3% (-$9.57) to $68.80/bbl. The CBOE Volatility Index popped 54% to 28.62.
The health care sector outperformed on a relative basis with a 0.5% decline due to strength in vaccine makers likes Pfizer (PFE 54.00, +3.11, +6.1%) and Moderna (MRNA 329.63, +56.24, +20.6%). Stay-at-home stocks like Zoom Video (ZM 220.21, +11.91, +5.7%) also posted decent gains.
Notably, rate-hike expectations were dialed back today. According to the CME FedWatch Tool, the probability for a rate hike in May 2022 decreased to 36.4% from 55.3% on Wednesday, and the probability for a rate hike in June 2022 decreased to 61.8% from 82.1% on Wednesday.
Appropriately, the fed-funds-sensitive 2-yr yield was down 12 basis points to 0.52% after rising 13 basis points over the prior three sessions. The U.S. Dollar Index fell 0.7% to 96.11.
The Omicron news overshadowed the typical news coverage of Black Friday, which Macy's (M 30.48, -1.66, -5.2%) said was off to a great start. It was also a bad day for Merck (MRK 79.16, -3.12, -3.8%) to announce that its COVID-19 oral antiviral reduced the risk of hospitalization or death by 30%, according to a late-stage study, versus 48% in interim data.
Investors did not receive any economic data on Friday. Looking ahead, investors will receive Pending Home Sales for October on Monday.
S&P 500 +22.3% YTD
Nasdaq Composite +20.2% YTD
Dow Jones Industrial Average +14.0% YTD
Russell 2000 +13.7% YTD
Crude futures down over 11%
26-Nov-21 12:30 ET
Dow -876.87 at 34927.51, Nasdaq -304.41 at 15540.83, S&P -34.85 at 4666.61
[BRIEFING.COM] The S&P 500 is down 2.1%, and the Russell 2000 is down 4.3%.
One last look at the sectors shows energy (-4.7%), financials (-3.5%), and industrials (-2.9%) still leading the retreat with losses between 3-5%. The health care sector (-0.2%) has slipped lower with a modest 0.2% decline.
WTI crude futures are trading lower by 11.5%, or $9.01, to $69.40/bbl.