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Market Snapshot
https://www.briefing.com/stock-market-update
Dow 35061.55 +238.20 (0.68%)
Nasdaq 14836.98 +152.39 (1.04%)
SP 500 4411.79 +44.31 (1.01%)
10-yr Note 0/32 1.280
NYSE Adv 2013 Dec 1192 Vol 813.1 mln
Nasdaq Adv 2136 Dec 2192 Vol 3.9 bln
Industry Watch
Strong: Communication Services, Health Care, Consumer Staples, Utilities
Weak: Energy
Moving the Market
-- S&P 500, Nasdaq, and Dow set intraday and closing record highs
-- Mega-caps provided key leadership amid expectations for strong earnings results next week
-- Snap (SNAP) and Twitter (TWTR) exceed earnings expectations and issued upbeat revenue guidance
-- Value/cyclical stocks underperformed
Mega-caps lead market to new heights
23-Jul-21 16:20 ET
Dow +238.20 at 35061.55, Nasdaq +152.39 at 14836.98, S&P +44.31 at 4411.79
[BRIEFING.COM] The S&P 500 (+1.0%), Nasdaq Composite (+1.0%), and Dow Jones Industrial Average (+0.7%) set intraday and closing record highs on Friday, largely due to leadership from the mega-caps amid high expectations for their earnings reports next week. The Russell 2000 increased 0.5%.
Alphabet (GOOG 2756.32, +89.75, +3.4%) and Facebook (FB 369.79, +18.60, +5.3%) scored the biggest gains in the mega-cap space after Snap (SNAP 78.02, +15.05, +23.9%) and Twitter (TWTR 71.66, +2.09, +3.0%) provided better-than-expected earnings results and upbeat revenue guidance for the third quarter.
The 24% earnings-pop in SNAP likely added to the bullish bias, as did Credit Suisse raising its price target on FB to a Street-high $480 from $400. Apple (AAPL 148.56, +1.76, +1.2%), Microsoft (MSFT 289.67, +3.53, +1.2%), and Amazon.com (AMZN 3656.64, +18.61, +0.5%) tallied decent gains.
The S&P 500 communication service sector (+2.7%), which is home to GOOG, FB, and TWTR, easily finished atop the sector leaderboard with a 2.7% gain. The health care (+1.2%), consumer staples (+1.2%), and utilities (+1.3%) sectors followed behind, giving off some defensive vibes.
The energy sector (-0.4%) was the only sector that closed lower while the financials (+0.1%) and industrials (+0.4%) sectors underperformed with small gains.
Energy and financial stocks struggled to attract buying interest despite an uptick oil prices ($72.09/bbl, +0.17, +0.2%), some curve-steepening activity in the Treasury market, and better-than-expected earnings reports from American Express (AXP 173.18, +2.28, +1.3%) and Schlumberger (SLB 28.41, +0.43, +1.5%).
This performance gap between defensive-oriented and cyclical sectors might have been due to lingering peak growth concerns after the preliminary IHS Markit Services PMI decreased to 59.8 in July from 64.6 in June. The corresponding PMI for manufacturing activity, however, reached a record-high of 63.1.
For what it's worth, the Dow closed above the 35,000 level while the S&P 500 closed above the 4,400 level -- both for the first time ever. Intel (INTC 53.00, -2.96, -5.3%) and Honeywell (HON 229.32, -3.42, -1.5%) were some laggards within the Dow despite both companies exceeding earnings expectations.
The 2-yr yield decreased two basis points to 0.19%, while the 10-yr yield increased two basis points to 1.29%. The U.S. Dollar Index increased 0.1% to 92.90.
Reviewing Friday's economic data:
Preliminary July IHS Markit Manufacturing PMI increased to 63.1 from 62.1 in the final reading from June. The preliminary July IHS Markit Services PMI decreased to 59.8 from 64.6 in the final reading from June.
Looking ahead, investors will receive New Home Sales for June on Monday.
S&P 500 +17.5% YTD
Nasdaq Composite +15.1% YTD
Dow Jones Industrial Average +14.6% YTD
Russell 2000 +11.9% YTD
Crude futures settle higher but energy stocks trade lower
23-Jul-21 15:30 ET
Dow +188.75 at 35012.10, Nasdaq +138.16 at 14822.75, S&P +39.75 at 4407.23
[BRIEFING.COM] The S&P 500 is up 0.9% and continues to trade above the 4400 level.
One last look at the sector performances shows communication services (+2.7%) firmly in the lead with a 2.7% gain, followed by the consumer staples (+1.3%), utilities (+1.1%), and health care (+1.1%) sectors. The energy (-0.3%) and financials (-0.1%) sectors trade slightly lower.
WTI crude futures settled higher by 0.2%, or $0.17, to $72.09/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34823.35 +25.35 (0.07%)
Nasdaq 14684.59 +52.64 (0.36%)
SP 500 4367.48 +8.79 (0.20%)
10-yr Note +3/32 1.265
NYSE Adv 1006 Dec 2209 Vol 742.3 mln
Nasdaq Adv 1533 Dec 2825 Vol 3.5 bln
Industry Watch
Strong: Information Technology, Health Care, Consumer Discretionary
Weak: Energy, Financials, Real Estate, Industrials, Consumer Staples
Moving the Market
-- Market consolidates rebound rally as signs of peak growth linger
-- Mega-caps and health care stocks helped large-cap indices close slightly higher
-- Weekly initial claims (419,000) reached highest level since mid-May
-- Earnings reports remained mostly better than expected
Large-cap indices extend rebound bias to a third day
22-Jul-21 16:20 ET
Dow +25.35 at 34823.35, Nasdaq +52.64 at 14684.59, S&P +8.79 at 4367.48
[BRIEFING.COM] The large-cap indices closed slightly higher on Thursday, holding onto their recent rebound gains largely due to strength in the mega-cap stocks. The S&P 500 (+0.2%), Nasdaq Composite (+0.4%), and Dow Jones Industrial Average (+0.1%) increased between 0.1-0.4% while the Russell 2000 pulled back 1.6%.
Overall price action was a bit sluggish, at least compared to the prior two days, as the market appeared to be consolidating its rebound rally while signs of peak growth lingered. Weekly initial claims reached their highest level since mid-May at 419,000 (Briefing.com consensus 360,000), and the Conference Board's Leading Economic Index increased at its slowest pace since February at 0.7% (Briefing.com consensus 0.9%).
Declining issues outpaced advancing issues by a 2:1 margin at the NYSE and Nasdaq, with energy and financial stocks being among the biggest losers after being the biggest winners yesterday. The S&P 500 financials (-1.0%) and energy (-1.1%) sectors each declined about 1%. Energy stocks struggled despite higher oil prices ($71.92/bbl, +1.64, +2.3%).
The mega-caps, however, kept the market in there -- potentially as a byproduct of the peak growth narrative. Microsoft (MSFT 286.14, +4.74, +1.7%) drew additional support from Citigroup after the firm raised its MSFT price target to a Street-high $378 from $310. The Vanguard Mega Cap Growth ETF (MGK 239.25, +1.96, +0.8%) rose 0.8%.
The health care sector (+0.7%) was another difference marker, joining the information technology sector (+0.7%) atop the leaderboard with a 0.7% gain.
Texas Instruments (TXN 183.91, -10.33, -5.3%), meanwhile, kept on a lid on many of the semiconductor stocks after providing conservative guidance for Q3, feeding into the narrative that corporate earnings are also subject to the slower growth narrative. TXN shares fell 5%, and the Philadelphia Semiconductor Index declined 0.9%.
To be fair, some companies like AT&T (T 28.01, +0.11, +0.4%) did provide upbeat guidance. Union Pacific (UNP 219.54, +2.35, +1.1%), CSX (CSX 32.67, +1.10, +3.5%), Blackstone (BX 110.13, +4.34, +4.1%), and Dow Inc. (DOW 60.48, +0.75, +1.3%) closed higher following their earnings reports.
In the Treasury market, the 10-yr yield flirted with 1.32%, then slipped to 1.23% in the hours following the weekly initial claims report, and finally settled two basis points below yesterday's settlement at 1.27%. The 2-yr yield was unchanged at 0.21%. The U.S. Dollar Index increased 0.1% to 92.85.
Reviewing Thursday's economic data:
Initial claims for the week ending July 17 increased by 51,000 to 419,000 (Briefing.com consensus 360,000). Continuing claims for the week ending July 10 decreased by 29,000 to 3.236 million, which is the lowest level since March 21, 2020.
The key takeaway from the report is the disappointment of the initial claims number, which was the highest it has been since mid-May and clearly misaligned with an improving economy; accordingly, it is likely to pour a little fuel on the peak growth narrative fire.
Existing home sales increased 1.4% m/m in June to a seasonally adjusted annual rate of 5.86 million (Briefing.com consensus 5.90 million) from a downwardly revised 5.78 million (from 5.80 million) in May. Total sales in June were up 22.9% from a year ago.
The key takeaway from the report is that the supply of existing homes for sale remains extremely limited. That is driving up the pace of price increases well beyond the pace of income growth, which is creating affordability pressures for prospective buyers, particularly first-time buyers.
The Conference Board's Leading Economic Index (LEI) increased 0.7% in June (Briefing.com consensus 0.9%) after increasing a downwardly revised 1.2% (from 1.3%) in May.
The key takeaway from the report is that overall growth remained widespread; however, the pace of growth in the leading indicators is slowing, having gone from 1.4% in March to 0.7% in June. The latter is the slowest pace since February.
Looking ahead, investors will receive the preliminary IHS Markit Manufacturing and Services PMis for July on Friday.
S&P 500 +16.3% YTD
Nasdaq Composite +13.9% YTD
Dow Jones Industrial Average +13.8% YTD
Russell 2000 +11.4% YTD
WTI crude futures extend rebound gains
22-Jul-21 15:30 ET
Dow +52.51 at 34850.51, Nasdaq +61.99 at 14693.94, S&P +9.90 at 4368.59
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34798.00 +286.01 (0.83%)
Nasdaq 14631.95 +133.08 (0.92%)
SP 500 4358.69 +35.63 (0.82%)
10-yr Note -5/32 1.276
NYSE Adv 2395 Dec 841 Vol 856.2 mln
Nasdaq Adv 3242 Dec 1077 Vol 4.0 bln
Industry Watch
Strong: Energy, Financials, Industrials, Materials
Weak: Health Care, Utilities, Real Estate
Moving the Market
-- Cyclical stocks lead advance, 10-yr yield trades sharply higher, and crude futures on the rise
-- Encouraging earnings commentary regarding the Delta variant
-- Several companies issue upbeat EPS guidance, but Netflix (NFLX) provides underwhelming subscriber guidance
Major indices extend rebound to a second straight day
21-Jul-21 16:20 ET
Dow +286.01 at 34798.00, Nasdaq +133.08 at 14631.95, S&P +35.63 at 4358.69
[BRIEFING.COM] The stock market extended its rebound bias to a second day on Wednesday, as economic concerns surrounding the Delta Covid variant continued to subside. The S&P 500 (+0.8%), Nasdaq Composite (+0.9%), and Dow Jones Industrial Average (+0.8%) rose between 0.8-0.9% while the Russell 2000 rose 1.9%.
These easing concerns were supported by earnings commentary from the CEOs of Coca-Cola (KO 56.55, +0.72, +1.3%), Chipotle Mexican Grill (CMG 1755.91, +181.56, +11.5%), and United Airlines (UAL 48.10, +1.78, +3.8%), who said their businesses haven't been impacted by the spread of the Delta variant.
For good measure, they were among a host of companies, which included Johnson & Johnson (JNJ 169.49, +1.04, +0.6%) and Verizon (VZ 55.95, +0.37, +0.7%), that beat EPS estimates. The Dow components -- KO, JNJ, and VZ -- also provided upbeat FY21 EPS guidance.
Eight of the 11 S&P 500 sectors contributed to the steady advance, which was appropriately paced by the cyclical energy (+3.5%), financials (+1.7%), materials (+1.1%), and industrials (+1.0%) sectors. The defensive-oriented utilities (-1.1%), real estate (-0.4%) and consumer staples (-0.1%) sectors closed lower.
Financial and energy stocks drew additional support from some curve-steepening activity and higher oil prices ($70.28, +2.96, +4.4%), both of which corroborated the belief that the Delta variant may not have a material impact on the economy as some previously feared. WTI crude futures closed back above $70 per barrel.
The 10-yr yield increased seven basis points to 1.28% while the 2-yr yield increased two basis points to 0.21%. The U.S. Dollar Index decreased 0.2% to 92.76. On a related note, the $24 billion 20-yr bond auction received soft demand, but that didn't invite additional selling interest in the Treasury market.
Netflix (NFLX 513.63, -17.42, -3.3%) was a notable laggard today, losing 3% after missing EPS estimates and providing underwhelming subscriber guidance for the third quarter.
Reviewing Wednesday's economic data:
The weekly MBA Mortgage Applications Index decreased 4.0% following a 16.0% spike in the prior week.
Weekly crude oil inventories increased by 2.11 mln barrels, which was the first inventory build reported out of the EIA in nine weeks.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report, Existing Home Sales for June, and the Conference Board's Leading Economic Index for June on Thursday.
S&P 500 +16.0% YTD
Dow Jones Industrial Average +13.7% YTD
Nasdaq Composite +13.5% YTD
Russell 2000 +13.1% YTD
Crude futures settle back above $70 per barrel
21-Jul-21 15:30 ET
Dow +262.99 at 34774.98, Nasdaq +104.23 at 14603.10, S&P +30.54 at 4353.60
[BRIEFING.COM] The large-cap indices are each trading higher by about 0.7% while the Russell 2000 outperforms with a 1.8% gain.
One last look at the sector performances shows energy (+3.7%) and financials (+1.9%) getting it done with strong gains, while the utilities (-0.9%), health care (-0.04%), and consumer staples (-0.04%) sectors trade lower.
WTI crude futures settled sharply higher by 4.4%, or $2.96, to $70.28/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34511.99 +549.95 (1.62%)
Nasdaq 14498.87 +223.89 (1.57%)
SP 500 4323.08 +64.59 (1.52%)
10-yr Note -1/32 1.200
NYSE Adv 2652 Dec 547 Vol 1.1 bln
Nasdaq Adv 2396 Dec 940 Vol 4.5 bln
Industry Watch
Strong: Financials, Industrials, Real Estate
Weak: Consumer Staples
Moving the Market
-- Investors bought the dip, boosting major indices to gains of at least 1.5%
-- IBM (IBM) reported positive earnings results
-- 10-yr yield settled at 1.21% after dipping below 1.14% followed mixed housing starts and building permits data for June
-- Technical factors and a fear of missing out on a sustained rebound rally
Stocks mount rebound rally
20-Jul-21 16:15 ET
Dow +549.95 at 34511.99, Nasdaq +223.89 at 14498.87, S&P +64.59 at 4323.08
[BRIEFING.COM] The major indices rallied by at least than 1.5% on this "turnaround Tuesday," as investors bought Monday's dip and sold longer-dated Treasuries. The Russell 2000 was the outright winner with a 3.0% gain, followed by the Dow Jones Industrial Average (+1.6%), Nasdaq Composite (+1.6%), and S&P 500 (+1.5%).
The market seemed to be operating on the assumption that conditions were favorable for bounce, especially after the S&P 500 successfully retested its 50-day moving average (4242) yesterday. Others believed the Russell 2000 had entered correction territory too quickly and that value/cyclical stocks had gotten oversold on a short-term basis.
The rebound gains were distributed across ten of the 11 S&P 500 sectors, including industrials (+2.7%) and financials (+2.4%) with gains over 2.0%. Advancing issues outpaced advanced issues by a 5:1 margin at the NYSE. The consumer staples sector (-0.1%) bucked the positive trend.
IBM (IBM 139.97, +2.05, +1.5%) reported better-than-expected earnings results, which may have instilled hope that other technology companies will follow in IBM's footsteps throughout the rest of the earnings season. Apple (AAPL 146.16, +3.70, +2.6%) drew additional support from a price-target increase to $166 from $155 at UBS.
Some companies like HCA Healthcare (HCA 248.90, +31.27, +14.4%) and Dover (DOV 162.14, +10.17, +6.7%) also felt confident enough to issue upbeat guidance, although it's worth mentioning that PPG Industries (PPG 158.49, -7.26, -4.4%) warned it will likely continue to see supply disruptions in Q3. Travelers (TRV 151.09, -0.17, -0.1%) closed lower despite beating EPS estimates.
The warning from PPG was presumably because of the coronavirus, but the extent of today's gains and some curve-steepening activity in the Treasury market seemed to suggest that some of the growth/coronavirus concerns have been overstated.
The 10-yr yield increased three basis points to 1.21% after dipping below 1.14% immediately following mixed housing starts and building permits data for June. Housing starts were better than expected while permits, which are a leading indicator, declined 5.1% m/m to a seasonally adjusted annual rate of 1.598 million (Briefing.com consensus 1.700 million).
The 2-yr yield decreased two basis points to 0.19% while the 30-yr yield rose five basis points to 1.87%. The U.S. Dollar Index increased 0.1% to 92.95. WTI crude futures rose 1.4%, or $0.90, to $67.32/bbl. The CBOE Volatility Index (19.73, -2.77, -12.3%) slipped below 20.00.
Reviewing Tuesday's economic data:
Total housing starts rose 6.3% month-over-month to a seasonally adjusted annual rate of 1.643 million (Briefing.com consensus 1.600 million). Building permits declined 5.1% month-over-month to a seasonally adjusted annual rate of 1.598 million (Briefing.com consensus 1.700 million).
The key takeaway from the report is that permits -- a leading indicator -- declined across all regions for single-family units, suggesting there will be a slowdown in building activity that could be related to a variety of factors, including higher costs, a lack of available labor, and/or high selling prices curtailing buyer demand.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index on Wednesday.
S&P 500 +15.1% YTD
Dow Jones Industrial Average +12.8% YTD
Nasdaq Composite +12.5% YTD
Russell 2000 +11.1% YTD
Oil prices find some relief
20-Jul-21 15:25 ET
Dow +628.58 at 34590.62, Nasdaq +271.31 at 14546.29, S&P +76.21 at 4334.70
[BRIEFING.COM] The S&P 500 is up 1.8% and on track to close above last Friday's close.
One last look at the sectors standings shows industrials (+2.9%), financials (+2.8%), information technology (+2.0%), and real estate (+2.0%) up at least 2.0% while the consumer staples sector (+0.1%) trades higher by just 0.1%.
WTI crude futures settled higher by 1.4%, or $0.90, to $67.32/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 33962.04 -725.81 (-2.09%)
Nasdaq 14274.98 -152.25 (-1.06%)
SP 500 4258.49 -68.67 (-1.59%)
10-yr Note +7/32 1.225
NYSE Adv 491 Dec 2805 Vol 1.1 bln
Nasdaq Adv 1278 Dec 3090 Vol 4.4 bln
Industry Watch
Strong: Consumer Staples
Weak: Energy, Financials, Industrials, Materials
Moving the Market
-- Growth concerns and weak price action fueled de-risking efforts
-- 10-yr yield drops 12 basis points to 1.18% and oil prices fall 7%, while hedging premium spiked as much as 36%
-- S&P 500 manages to close above 50-day moving average (4240)
Stocks, Treasury yields, and oil prices tumble to start the week
19-Jul-21 16:20 ET
Dow -725.81 at 33962.04, Nasdaq -152.25 at 14274.98, S&P -68.67 at 4258.49
[BRIEFING.COM] The stock market declined sharply on Monday with index losses ranging between 1.1% (Nasdaq Composite) and 2.1% (Dow Jones Industrial Average), as risk sentiment remained pressured by growth concerns. The Russell 2000 (-1.5%) entered correction territory, which is typically defined as a 10% decline from a recent high.
There was a relatively encouraging finish, though, that helped the S&P 500 (-1.6%) close above its 50-day moving average (4240) after falling below it during the session.
Still, the losses were spread across all 11 S&P 500 sectors and all 30 Dow components. The energy (-3.6%) and financials (-2.8%) sectors took the brunt of the damage and extended recent losses while the consumer staples sector (-0.3%) declined just 0.3%. Declining issues outpaced advancing issues by a 7:1 margin at the NYSE.
Reports continued to discuss the global spread of the Delta variant, which fit nicely with the prevailing narrative that growth prospects will continue to face headwinds as efforts are taken to contain the virus. The Treasury market remained a signpost for growth concerns, as the 10-yr yield dropped 12 basis points to 1.18%.
In addition, WTI crude futures dropped 7.4%, or $5.34, to $66.42/bbl, as investors factored in expectations for weaker demand with a confirmation from OPEC+ that it will increase production, starting next month. The 2-yr yield decreased two basis points to 0.21%. The U.S. Dollar Index increased 0.2% to 92.84.
Growth concerns have been around since the start of the second quarter, but the extent of the weakness today appeared to fuel worries about a meaningful pullback in the S&P 500. The CBOE Volatility Index spiked as much as 36.0% as investors rushed for downside protection, but it closed higher by 22.0% to 22.50.
Looking at some individual movers, NVIDIA (NVDA 751.19, +24.74, +3.4%) was a bright spot with a 3% gain, as were several of the stay-at-home stocks like Peloton (PTON 118.43, +7.89, +7.1%), DoorDash (DASH 175.50, +8.14, +4.9%), and DocuSign (DOCU 289.48, +7.43, +2.6%).
Zoom Video (ZM 354.20, -7.77, -2.2%) underperformed after announcing it will acquire Five9 (FIVN 188.12, +10.52, +5.9%) in a deal worth $14.7 billion in stock. Separately, Ingersoll-Rand (IR 46.25, -1.91, -4.0%) said it tried to acquire SPX Flow (FLOW 75.93, +13.84, +22.3%) last month for $85/share, or $3.59 billion, in cash.
Monday's economic data was limited to the NAHB Housing Market Index for July, which decreased to 80 (Briefing.com consensus 82) from 81 in June. Looking ahead, investors will receive Housing Starts and Building Permits for June on Tuesday.
S&P 500 +13.4% YTD
Dow Jones Industrial Average +11.0% YTD
Nasdaq Composite +10.8% YTD
Russell 2000 +7.9% YTD
Crude futures settle lower by 7%
19-Jul-21 15:25 ET
Dow -889.14 at 33798.71, Nasdaq -219.94 at 14207.29, S&P -89.64 at 4237.52
[BRIEFING.COM] The S&P 500 is down 2.1%, and the Russell 2000 is down 1.9%.
One last look at the sector performances shows energy (-4.3%) and financials (-3.2%) continuing to lead the retreat with 4% and 3% declines, respectively. The consumer staples sector (-1.0%) outperforms on a relative basis.
WTI crude futures settled sharply lower by 7.4%, or $5.34, to $66.42/bbl. Oil prices were hit by demand concerns as a byproduct of reduced travel due to the spread of the Delta variant. OPEC+ also confirmed it will increase production, starting next month.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34687.85 -299.17 (-0.86%)
Nasdaq 14427.23 -115.90 (-0.80%)
SP 500 4327.16 -32.87 (-0.75%)
10-yr Note -22/32 1.300
NYSE Adv 957 Dec 2306 Vol 961.0 mln
Nasdaq Adv 1327 Dec 2913 Vol 4.0 bln
Industry Watch
Strong: Utilities, Real Estate, Consumer Staples, Health Care
Weak: Energy, Materials, Financials, Consumer Discretionary
Moving the Market
-- Market fades opening gains and closes lower
-- Consumer sentiment declines in July, according to prelim UofM Index
-- June retail sales report was better than expected
-- Relative weakness in cyclical stocks
Market fades positive start and closes lower
16-Jul-21 16:20 ET
Dow -299.17 at 34687.85, Nasdaq -115.90 at 14427.23, S&P -32.87 at 4327.16
[BRIEFING.COM] The S&P 500 fell 0.8% on Friday, as the market faded a positive start driven by the cyclical stocks and reverted to a defensive posture. The Nasdaq Composite (-0.8%), Dow Jones Industrial Average (-0.9%), and Russell 2000 (-1.2%) struggled alongside the benchmark index.
The opening gains ranged from 0.3% (Dow) to 0.9% (Russell 2000) after data showed total retail sales increase 0.6% m/m in June (Briefing.com consensus -0.6%). The Dow also came within two points of its all-time high.
Cyclical stocks quickly turned around, as did small-caps, on no specific catalyst, although a disappointing read on consumer sentiment appeared to reinforce the selling. The preliminary July reading for the University of Michigan Index of Consumer Sentiment slipped to 80.8 (Briefing.com consensus 86.3) from 85.5 in June.
The S&P 500 energy (-2.8%), materials (-1.5%), financials (-1.3%), and consumer discretionary (-1.3%) sectors piled on the losses into the close while the defensive-oriented utilities (+1.0%), consumer staples (+0.2%), real estate (+0.1%), and health care (+0.2%) sectors closed higher.
The Treasury market, meanwhile, continued to pressure the bank stocks -- the SPDR S&P Bank ETF (KBE 48.90, -1.26, -2.5%) dropped 2.5% -- while working in favor of those defensive sectors with relatively high dividend yields.
The 10-yr yield settled unchanged at 1.30%, even as consumers' expectations on inflation kept rising, according to the consumer sentiment report. The 10-yr yield touched 1.34% following the retail sales report. This remained well below the dividend yields of the real estate, utilities, and consumer staples sectors.
Charles Schwab (SCHW 68.89, -1.66, -2.4%) didn't help its own cause with a mixed earnings report, but State Street (STT 84.35, +2.38, +2.9%) did with better-than-expected quarterly results. Dow Inc. (DOW 60.01, -1.90, -3.1%) was downgraded to Underperform from Neutral at BofA Securities.
Separately, Moderna (MRNA 286.4., +26.75, +10.3%) jumped 10% on news it will join the S&P 500 on July 21. Intel (INTC 54.97, -0.84, -1.5%) is reportedly in talks to acquire GlobalFoundries for $30 billion.
The 2-yr yield was unchanged at 0.23%. The U.S. Dollar Index increased 0.1% to 92.71. WTI crude futures increased 0.1%, or $0.10, to $71.76/bbl.
Reviewing Friday's economic data, which featured the Retail Sales report for June:
Total retail sales, weighed down by a 2.0% decline in motor vehicle and parts dealers sales, still increased 0.6% month-over-month (Briefing.com consensus -0.6%) following a downwardly revised 1.7% decline (from -1.3%) in May. Excluding autos, retail sales jumped 1.3% month-over-month (Briefing.com consensus +0.3%) following a downwardly revised 0.9% decline (from -0.7%) in May.
The key takeaway from the report is the stronger-than-expected read for the ex-auto figure, which reflects the unleashing of pent-up demand on the part of consumers flush with cash and a desire to leave their house.
The preliminary July reading for the University of Michigan Index of Consumer Sentiment slipped to 80.8 (Briefing.com consensus 86.3) from the final reading of 85.5 for June. This is the lowest reading since February and compares to the 99.3 reading seen in July 2020.
The key takeaway from the report is the understanding that consumer sentiment declined as consumers' inflation expectations rose.
Business inventories increased 0.5% m/m in May (Briefing.com consensus +0.4%) following an upwardly revised 0.1% increase (from -0.2%) in April.
Looking ahead, investors will receive the NAHB Housing Market Index for July on Monday.
S&P 500 +15.2% YTD
Dow Jones Industrial Average +13.3% YTD
Nasdaq Composite +11.9% YTD
Russell 2000 +9.5% YTD
Energy stocks selling off despite muted change in oil prices
16-Jul-21 15:30 ET
Dow -273.08 at 34713.94, Nasdaq -99.78 at 14443.35, S&P -28.26 at 4331.77
[BRIEFING.COM] The S&P 500 is down 0.7% and on track to end the week with a 0.9% decline.
One last look at the sector standings shows energy (-2.8%), materials (-1.6%), financials (-1.4%), and consumer discretionary (-1.1%) down more than 1.0% right now, with energy down 3%. The utilities (+1.4%), real estate (+0.4%), health care (+0.4%), and consumer staples (+0.2%) sectors trade higher.
WTI crude futures settled higher by 0.1%, or $0.10, to $71.76/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34987.02 +53.79 (0.15%)
Nasdaq 14543.13 -101.82 (-0.70%)
SP 500 4360.03 -14.27 (-0.33%)
10-yr Note +2/32 1.322
NYSE Adv 1242 Dec 1971 Vol 859.0 mln
Nasdaq Adv 1703 Dec 2473 Vol 4.4 bln
Industry Watch
Strong: Utilities, Consumer Staples, Financials, Industrials
Weak: Information Technology, Communication Services, Consumer Discretionary, Energy
Moving the Market
-- Mega-caps weigh on market, even as the 10-yr yield declined to 1.30%
-- Weakness in semiconductor space after Taiwan Semi (TSM) missed EPS estimates
-- Mixed economic data, mixed earnings reactions
Mega-caps weigh on market, even as yields slip
15-Jul-21 16:20 ET
Dow +53.79 at 34987.02, Nasdaq -101.82 at 14543.13, S&P -14.27 at 4360.03
[BRIEFING.COM] The S&P 500 decreased 0.3% on Thursday in a mixed session, although it did battle back from a 0.8% intraday decline. The Nasdaq Composite (-0.7%) and Russell 2000 (-0.6%) underperformed the benchmark index, while the Dow Jones Industrial Average increased 0.2%.
Declining issues had a modest advantage over advancing issues at the NYSE and Nasdaq, but the most influential losses arguably came from the top seven of the eight stocks in the S&P 500, which comprise 25% of its market capitalization.
NVIDIA (NVDA 758.65, -35.01, -4.4%) was an eye sore with its 4% decline amid some disappointment surrounding an EPS miss from Taiwan Semi (TSM 117.53, -6.86, -5.5%). The Philadelphia Semiconductor Index fell 2.2%.
Aside from NVIDIA, the losses weren't catalyzed by any specific news other than what seemed to be an awareness that the mega-caps have had a good run and were probably due for a breather. Entering the session, the Vanguard Mega Cap Growth ETF (MGK 237.32, -1.24, -0.5%) was up 14.5% since May 12 while the Invesco S&P 500 Equal Weight ETF (RSP 150.43, -0.40, -0.3%) was up just 3.3%.
The S&P 500 information technology (-0.8%), consumer discretionary (-0.6%), and communication services (-0.5%) sectors, which contain the mega-caps, were among the worst-performing sectors today. The energy sector (-1.4%) was the weakest link, though, with a 1.4% decline amid lower oil prices ($71.66/bbl, -1.41, -1.9%).
On the upside, there was a mix of cyclical/counter-cyclical winners. The utilities (+1.2%), consumer staples (+0.4%), financials (+0.4%), industrials (+0.2%), and real estate (+0.1%) sectors closed higher. The utilities sector was the only one that gained more than 0.5%.
Interestingly, the 10-yr yield settled lower by six basis points to 1.30% amid reported growth concerns, yet the large growth stocks still struggled and bank stocks rebounded from recent losses. The 2-yr yield increased one basis point to 0.23%. The U.S. Dollar Index increased 0.2% to 92.57.
U.S. Bancorp (USB 58.82, +1.83, +3.2%) was one of the bank outperformers after beating top and bottom-line estimates while Morgan Stanley (MS 92.63, +0.17, +0.2%) closed slightly higher following its quarterly results. Dow component UnitedHealth (UNH 420.05, +5.31, +1.3%) was another earnings standout.
In other developments, weekly initial claims reached a post-pandemic low at 360,000 (Briefing.com consensus 360,000), Fed Chair Powell concluded his semiannual congressional testimony on monetary policy without any surprises, and Treasury Secretary Yellen told NPR she doesn't think high inflation rates will continue in the medium term.
Reviewing Thursday's economic data:
Initial jobless claims for the week ending July 10 decreased by 26,000 to 360,000 (Briefing.com consensus 360,000) -- the lowest level since March 14, 2020. Continuing claims for the week ending July 3 fell by 126,000 to 3.241 million -- the lowest level since March 21, 2020.
The key takeaway is that the improving claims levels are consistent with an improving economy that is requiring less layoff, and more hiring, activity.
Total industrial production increased 0.4% in June (Briefing.com consensus 0.7%) following a downwardly revised 0.7% increase in May (from 0.8%). The capacity utilization rate increased to 75.4% (Briefing.com consensus 75.6%) from a downwardly revised 75.1% in May (from 75.2%).
The key takeaway from the report is that it reflected the ongoing constraints the auto industry is facing due to the semiconductor shortage and the impact that is having on overall production.
Import prices increased 1.0% in June, while import prices excluding oil increased 0.7%. Export prices increased 1.2% in June, while export prices excluding agriculture increased 1.1%.
The Empire State Manufacturing Survey jumped to 43.0 in July (Briefing.com consensus 18.0) from 17.4 in June.
The Philadelphia Fed Index for July decreased to 21.9 (Briefing.com consensus 28.3) from 30.7 in June.
Looking ahead, investors will receive Retail Sales for June, the preliminary University of Michigan Index of Consumer Sentiment for July, Business Inventories for May, and Net Long-Term TIC Flows for May on Friday.
S&P 500 +16.1% YTD
Dow Jones Industrial Average +14.3% YTD
Nasdaq Composite +12.8% YTD
Russell 2000 +10.9% YTD
Crude futures settle lower, weigh on energy stocks
15-Jul-21 15:30 ET
Dow +39.71 at 34972.94, Nasdaq -126.27 at 14518.68, S&P -17.22 at 4357.08
[BRIEFING.COM] The S&P 500 is down 0.4% while the Dow has returned into positive territory with a 0.1% gain.
Looking at the S&P 500 sectors shows six sectors trading higher and five sectors trading lower. The energy sector (-1.5%) lags with a 1.5% decline, but the information technology sector (-1.0%) is the most influential laggard. The utilities sector (+1.0%) leads with a 1% gain.
WTI crude futures settled lower by 1.9%, or $1.41, to $71.66/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34888.79 -107.39 (-0.31%)
Nasdaq 14677.65 -55.59 (-0.38%)
SP 500 4369.21 -15.42 (-0.35%)
10-yr Note -26/32 1.414
NYSE Adv 838 Dec 2413 Vol 780.0 mln
Nasdaq Adv 1050 Dec 3212 Vol 4.5 bln
Industry Watch
Strong: Information Technology, Communication Services
Weak: Financials, Energy, Materials, Industrials, Consumer Discretionary
Moving the Market
-- Relatively weak bond auction takes market lower, Treasury yields now trade higher
-- June CPI report shows another hotter than expected rise in consumer prices
-- JPMorgan Chase (JPM) and Goldman Sachs (GS) trade lower despite beating top and bottom-line estimates
Large-cap indices ease back from record territory
13-Jul-21 16:20 ET
Dow -107.39 at 34888.79, Nasdaq -55.59 at 14677.65, S&P -15.42 at 4369.21
[BRIEFING.COM] The S&P 500 (-0.4%), Nasdaq Composite (-0.4%), and Dow Jones Industrial Average (-0.3%) recorded modest losses on Tuesday, easing back from record territory as investors assessed hot CPI data for June, negative reactions to bank earnings, and a relatively weak 30-yr bond auction. The Russell 2000 fell 1.9%.
To start, total CPI rose 0.9% m/m in June (Briefing.com consensus 0.5%) and core CPI, which excludes food and energy, also rose 0.9% (Briefing.com consensus 0.5%). On a year-over-year basis, they were running noticeably hot at 5.4% and 4.5%, respectively. The yr/yr increase in core CPI was the largest since November 1991.
Interestingly, the Treasury market barely reacted to the inflation data, and the S&P 500 and Nasdaq were able to set record intraday highs largely due to leadership from mega-caps like Apple (AAPL 145.64, +1.14, +0.8%) and Microsoft (MSFT 280.98, +3.66, +1.3%). The mega-cap strength overshadowed an advancing/declining line that easily favored declining issues.
It wasn't until the results of a weaker-than-average $24 bln 30-yr bond auction were released at 1:00 p.m. ET that Treasury yields spiked, which ultimately took some wind out of the growth stocks. The 10-yr yield settled higher by five basis points to 1.42% while the 2-yr yield increased three basis points to 0.25%.
Declining issues widened their advantage over advancing issues to a 3:1 margin (versus 2:1 before the bond auction results). The S&P 500 consumer discretionary (-1.2%), financials (-1.1%), and real estate (-1.3%) sectors lost more than 1.0% while information technology (+0.4%) was the only sector that closed higher.
The financials sector was unable to key off the higher Treasury yields, as investor sentiment remained hampered by disappointing reactions to better-than-expected earnings results from JPMorgan Chase (JPM 155.65, -2.35, -1.5%) and Goldman Sachs (GS 375.89, -4.52, -1.2%).
PepsiCo (PEP 152.96, +3.46, +2.3%) was an earnings standout, additionally supported by upside FY21 EPS guidance. Boeing (BA 228.20, -10.09, -4.2%), meanwhile, fell 4% after disclosing it will slow production of the 787 Dreamliner as it works to resolve a new issue surrounding the plane.
Given the finicky price action in Treasuries, the market will look to see what Fed Chair Powell says tomorrow in his semiannual testimony on monetary policy before Congress. San Francisco Fed President Daly (FOMC voter) told CNBC that the inflation spikes have been expected and the Fed is in a good position to taper asset purchases as soon as later this year.
WTI crude futures settled higher by 1.5%, or $1.14, to $75.24/bbl. The U.S. Dollar Index advanced 0.6% to 92.78.
Reviewing Tuesday's economic data, which featured the Consumer Price Index for June:
Total CPI increased 0.9% month-over-month (Briefing.com consensus +0.5%) -- the largest one-month increase since June 2008 -- and core CPI, which excludes food and energy, also increased 0.9% (Briefing.com consensus 0.5%). On a year-over basis, total CPI is up 5.4% -- the largest increase since August 2008 -- and core CPI is up 4.5%, which is the largest increase since November 1991.
The key takeaway from the report is that the price increases in June were broad based, featuring a 10.5% increase in the index for used cars and trucks, a 0.8% increase in the food at home index, a 2.5% increase in the gasoline index, and a 0.5% increase in the household index. That should put the Fed's "transitory inflation" narrative to the test, particularly with total CPI running at an annualized rate of 7.2% over the last six months.
The Treasury Budget for June showed a $174.2 bln deficit, versus an $864.1 bln deficit in the same period a year ago. The budget data is not seasonally adjusted, so the June deficit can't be compared to the May deficit of $131.9 bln. June marked the 21st consecutive month that the Treasury has seen a budget deficit.
The fiscal year-to-date budget deficit is $2.24 trln versus -$2.74 trln for the same period a year ago. The budget deficit over the last 12 months is $2.63 trln versus -$3.31 trln in May.
The NFIB Small Business Optimism Index for June increased to 102.5 from 99.6 in May.
Looking ahead, investors will receive the Producer Price Index for June, the Fed's Beige Book for July, and the weekly MBA Mortgage Applications Index on Wednesday.
S&P 500 +16.3% YTD
Dow Jones Industrial Average +14.0% YTD
Nasdaq Composite +13.9% YTD
Russell 2000 +13.4% YTD
Crude futures settle higher
13-Jul-21 15:25 ET
Dow -11.90 at 34984.28, Nasdaq -39.63 at 14693.61, S&P -15.13 at 4369.50
[BRIEFING.COM] The S&P 500 is trading near session lows with a 0.3% decline. The Russell 2000 continues to bleed with a 1.4% decline, extending its monthly loss to 2.7%.
One last look at the sector performances shows consumer discretionary (-1.1%), materials (-1.1%), utilities (-1.1%), and real estate (-1.6%) down more than 1.0% while the information technology sector (+0.5%) remains in positive territory. The communication services sector trades flat.
WTI crude futures settled higher by 1.5%, or $1.14, to $75.24/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34996.18 +126.02 (0.36%)
Nasdaq 14733.24 +31.32 (0.21%)
SP 500 4384.63 +15.08 (0.35%)
10-yr Note 0/32 1.357
NYSE Adv 1880 Dec 1349 Vol 786.5 mln
Nasdaq Adv 2282 Dec 2022 Vol 3.8 bln
Industry Watch
Strong: Financials, Materials, Health Care, Real Estate
Weak: Consumer Staples, Industrials, Information Technology
Moving the Market
-- S&P 500 sets another all-time high with small gain
-- Financials rise ahead of Q2 earnings
-- Wait-and-see for busy week of events, including earnings and econ data
-- Small-caps/mid-caps underperform
Another trio of record closes in front of bank earnings, CPI data
12-Jul-21 16:20 ET
Dow +126.02 at 34996.18, Nasdaq +31.32 at 14733.24, S&P +15.08 at 4384.63
[BRIEFING.COM] The S&P 500 (+0.4%), Nasdaq Composite (+0.2%), and Dow Jones Industrial Average (+0.4%) closed at record highs on Monday, tallying modest gains as investors remained committed to the market ahead of a busy week of events. The S&P 500 also set an all-time intraday high while the Russell 2000 increased just 0.1%.
The financials sector (+1.0%) was the most influential group today, propped up by some enthusiasm surrounding the Q2 earnings reporting period, which will be kicked off by JPMorgan Chase (JPM 158.00, +2.23, +1.4%) and Goldman Sachs (GS 380.50, +8.74, +2.4%) tomorrow morning. A turnaround in Treasury yields also helped.
The 10-yr yield settled one basis point higher at 1.36% after touching 1.33% overnight, and the 2-yr yield settled one basis point higher at 0.22% after touching 0.20% overnight. On a related note, the $58 bln 3-yr note auction was met with lukewarm demand while the $38 bln 10-yr auction received strong interest. The U.S. Dollar Index increased 0.1% to 92.23.
The communication services (+0.9%) and real estate (+0.9%) sectors followed closely behind with decent gains, with the former supported by Walt Disney (DIS 184.38, +7.34, +4.2%) after its "Black Widow" movie raked in more than $215 million globally over the weekend. Disney is also reportedly aiming to increase ESPN+ subscription costs.
Today's lone holdouts were the consumer staples (-0.2%) and energy (-0.1%) sectors while the information technology sector (+0.04%) was held back by Apple (AAPL 144.50, -0.61, -0.4%) and Microsoft (MSFT 277.32, -0.62, -0.2%). Evidently, no sector gained or lost more than 1.0%.
Besides earnings, investors may have restrained conviction for the release of the June CPI report tomorrow. For what it's worth, PPI data for June will be released on Wednesday followed by Retail Sales data for June on Friday. Fed Chair Powell will also testify before Congress in his semiannual report on monetary policy, starting Wednesday.
In other corporate news, Broadcom (AVGO 485.75, +5.57, +1.2%) was a technology winner amid reports that it's looking to acquire SAS Institute for $15-20 bln. Chevron (CVX 104.28, +0.21, +0.2%) bucked the negative trend in the energy space after the stock was initiated with an Outperform rating at BMO Capital Markets.
Energy stocks in general were clipped by lower oil prices (74.10/bbl, -0.46, -0.6%), which some attributed to demand concerns because of the Delta Covid variant.
Investors did not receive any notable economic data on Monday. Looking ahead, the Consumer Price Index for June, the Treasury Budget for June, and the NFIB Small Business Optimism Index for June will be released on Tuesday.
S&P 500 +16.7% YTD
Russell 2000 +15.5% YTD
Nasdaq Composite +14.3% YTD
Dow Jones Industrial Average +14.3% YTD
Crude futures settle lower
12-Jul-21 15:30 ET
Dow +135.79 at 35005.95, Nasdaq +26.09 at 14728.01, S&P +15.46 at 4385.01
[BRIEFING.COM] The S&P 500 is trading at session highs with a 0.4% gain. Ten of its 11 sectors are now trading in positive territory.
The financials sector (+1.1%) continues to lead the action with a 1.1% gain ahead of Q2 earnings while the communication services (+0.9%) and real estate (+0.8%) sectors follow closely behind. The consumer staples sector (-0.3%) is the lone holdout.
WTI crude futures settled lower by 0.6%, or $0.46, to $74.10/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34870.16 +448.23 (1.30%)
Nasdaq 14701.92 +142.13 (0.98%)
SP 500 4369.55 +48.73 (1.13%)
10-yr Note -27/32 1.355
NYSE Adv 2572 Dec 682 Vol 816.0 mln
Nasdaq Adv 3229 Dec 981 Vol 3.7 bln
Industry Watch
Strong: Financials, Industrials, Materials, Energy
Weak: Utilities
Moving the Market
-- Stocks and Treasury yields staged strong reversals from yesterday
-- S&P 500, Dow, and Nasdaq close at record highs
-- Value/cyclical stocks led broad-based advance
-- 10-yr yield settled higher at 1.36%
S&P 500 and Nasdaq reverse to record highs
09-Jul-21 16:15 ET
Dow +448.23 at 34870.16, Nasdaq +142.13 at 14701.92, S&P +48.73 at 4369.55
[BRIEFING.COM] U.S. stocks and Treasury yields staged a strong reversal on Friday, with the S&P 500 rallying 1.1% to intraday and closing record highs and the 10-yr yield rebounding seven basis points to 1.36%. The Nasdaq Composite (+1.0%) and Dow Jones Industrial Average (+1.3%) also closed at record highs while the Russell 2000 (+2.0%) outperformed.
Today's positive price action was largely a continuation of yesterday's trade that saw the 10-yr yield bottom at 1.25% early in Thursday's session and stocks close off their intraday lows. Today, value/cyclical stocks led the broad-based advance, feeding into the view that growth concerns have been a bit overstated.
All 11 S&P 500 sectors finished in positive territory, 28 of the 30 Dow components closed higher, and advancing issues outpaced declining issues by a 4:1 margin at the NYSE and a 3:1 margin at the Nasdaq.
The financials (+2.9%), materials (+2.0%), energy (+2.0%), and industrials (+1.6%) sectors advanced the most after entering the session as weekly laggards. Bank stocks and energy stocks received additional support from a wider 2s10s spread in the Treasury market and higher oil prices ($74.56/bbl, +1.58, +2.2%).
Apple (AAPL 145.11, +1.87, +1.3%) was arguably one of the most influential stocks today given its 1.3% gain and $2.42 trillion market capitalization. The stock opened little changed like the Nasdaq but steadily crept higher throughout the day and set its first all-time high since January.
Supportive news included Pfizer (PFE 39.63, +0.38, +1.0%) announcing that it's working on a booster COVID-19 shot to target the Delta variant, and San Francisco Fed President Daly (FOMC voter) suggesting the Fed should be cautious about withdrawing its policy support due to the risks posed by the Delta variant.
The bullish tone was further corroborated by softness in the U.S. dollar (91.10, -0.32, -0.4%) and Japanese yen (-0.3%), which are typically viewed as safe-haven currencies, and separately by a weaker CBOE Volatility Index (16.18, -2.82, -14.8%). The latter represented a decline in the hedging premium.
The 2-yr yield increased three basis points to 0.22%.
Friday's economic data was limited to Wholesale Inventories for May, which increased 1.3% m/m in May (Briefing.com consensus 1.1%) following a revised 1.1% increase (from +0.8%) in April. Investors will not receive any notable economic data on Monday.
S&P 500 +16.3% YTD
Russell 2000 +15.5% YTD
Nasdaq Composite +14.1% YTD
Dow Jones Industrial Average +13.9% YTD
[Edit: the comment has been reflected to include that the Dow closed at a record high, which was omitted in the previous version]
Crude futures settle higher
09-Jul-21 15:30 ET
Dow +457.47 at 34879.40, Nasdaq +132.97 at 14692.76, S&P +47.67 at 4368.49
[BRIEFING.COM] The S&P 500 is trading at session highs with a 1.1% gain.
One last look at the S&P 500 sectors shows financials (+2.9%), energy (+2.1%), and materials (+2.0%) still leading the advance with gains of at least 2.0% while the utilities sector (+0.1%) has turned positive with a 0.1% gain.
WTI crude futures settled higher by 2.2%, or $1.58, to $74.56/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34421.93 -259.86 (-0.75%)
Nasdaq 14559.79 -105.28 (-0.72%)
SP 500 4320.82 -37.31 (-0.86%)
10-yr Note +24/32 1.297
NYSE Adv 778 Dec 2432 Vol 972.1 mln
Nasdaq Adv 1430 Dec 2571 Vol 4.5 bln
Industry Watch
Strong: Consumer Discretionary
Weak: Financials, Materials, Industrials
Moving the Market
-- General de-risking and profit-taking efforts
-- Reported growth concerns fueled in part after Japan extended state of emergency through the Olympics
-- 10-yr yield touched 1.25% early in the morning
Investors take profits as headlines fuel peak growth narrative
08-Jul-21 16:20 ET
Dow -259.86 at 34421.93, Nasdaq -105.28 at 14559.79, S&P -37.31 at 4320.82
[BRIEFING.COM] The S&P 500 (-0.9%) and Nasdaq Composite (-0.7%) pulled back from record territory on Thursday, as investors mainly took profits amid pestering peak growth concerns. The Dow Jones Industrial Average declined 0.8% while the Russell 2000 declined 0.9% after it led the major indices lower with a 2.7% intraday decline.
The negative bias was formed overnight, reportedly because Japan extended its coronavirus state of emergency through Aug. 22 (it later confirmed that spectators will be banned at the Olympics), the People's Bank of China signaled it will cut the required reserve ratio for banks, and the 10-yr yield traded as low as 1.25%.
These developments harked on the oft-repeated narrative that growth rates are apt to slow down, partially because the Delta variant is hurting foreign economies and could further strain parts of the labor market. On a related note, weekly initial claims were higher than expected at 373,000 (Briefing.com consensus 350,000).
My midday, though, the Russell 2000 had returned to its flat line, the large-cap indices had recouped more than half of their losses, and the 10-yr yield nearly returned to its unchanged mark. This comeback effort unfortunately fell short, feeding into the narrative that the market was running on tired legs and due for a pullback.
All 11 S&P 500 sectors closed lower, led by the cyclical financials (-2.0%), industrials (-1.4%), and materials (-1.4%) sectors. The consumer discretionary sector (-0.1%) declined just 0.1% due to strength in Amazon.com (AMZN 3731.41, +34.83, +0.9%) and Tesla (TSLA 652.81, +8.16, +1.3%). Growth stocks in general were weak, though.
Interestingly, oil prices ($72.98/bbl, +0.80, +1.1%) did stage a successful comeback, rising 1% after being down 1.9% intraday. The turnaround was aided by data showing the seventh-straight weekly inventory draw out of the EIA.
The 10-yr yield and 2-yr yield both settled lower by three basis points to 1.29% and 0.19%, respectively. The U.S. Dollar Index decreased 0.3% to 92.37.
All in all, the growth-oriented headlines and the unnerving decline in the 10-yr yield presumably made it hard to justify another positive day. With growth/inflation rates in mind, the market will surely be paying attention to the China CPI and PPI data for June and the industrial production reports for the UK, Italy, and France tomorrow.
Reviewing Thursday's economic data:
For the week ending July 3, initial claims increased 2,000 to 373,000 (Briefing.com consensus 350,000). Continuing claims for the week ending June 26 decreased by 145,000 to 3.339 million -- the lowest since March 21, 2020.
The key takeaway from the report is in the recognition that the four-week moving average for initial claims (394,500) is at its lowest level since March 14, 2020. That's still too high, yet the trend remains encouraging.
Consumer credit increased by $35.3 bln in May (Briefing.com consensus $19.0B) after increasing an upwardly revised $20.0 bln (from $18.6 bln) in April. The key takeaway from the report is that the expansion in consumer credit in May was the largest since December 2010.
Looking ahead, investors will receive Wholesale Inventories for May on Friday.
S&P 500 +15.0% YTD
Russell 2000 +13.0% YTD
Nasdaq Composite +13.0% YTD
Dow Jones Industrial Average +12.5% YTD
Crude futures rise on seventh-straight inventory draw
08-Jul-21 15:30 ET
Dow -347.66 at 34334.13, Nasdaq -117.49 at 14547.58, S&P -42.83 at 4315.30
[BRIEFING.COM] The S&P 500 is down 1.0% amid losses in all 11 of its sectors.
The financials sector remains the weakest link with a 2.1% decline amid the lower Treasury yields, while the consumer discretionary sector is down just 0.1% due to strength in Amazon.com (AMZN 3736.68, +40.23, +1.1%). Amazon is breaking out to fresh all-time highs.
WTI crude futures settled higher by 1.1%, or $0.80, to $72.98/bbl. The EIA reported its seventh straight weekly inventory draw, and of course, it was larger than expected.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34681.79 +104.42 (0.30%)
Nasdaq 14665.07 +1.42 (0.01%)
SP 500 4358.13 +14.59 (0.34%)
10-yr Note +27/32 1.300
NYSE Adv 1542 Dec 1662 Vol 887.0 mln
Nasdaq Adv 1439 Dec 2726 Vol 4.5 bln
Industry Watch
Strong: Consumer Staples, Industrials, Materials, Information Technology
Weak: Energy, Financials
Moving the Market
-- S&P 500 and Nasdaq set all-time highs with modest gains
-- 10-yr yield trades around 1.30% amid reported growth concerns, peak inflation expectations, and short-covering activity
-- Value/cyclical stocks close performance gap between growth stocks
-- FOMC Minutes from June meeting reveal no major surprises
The big four lift S&P 500 to record highs
07-Jul-21 16:20 ET
Dow +104.42 at 34681.79, Nasdaq +1.42 at 14665.07, S&P +14.59 at 4358.13
[BRIEFING.COM] The S&P 500 gained 0.3% on Wednesday, setting another pair of intraday and closing record highs in a mixed session. The Nasdaq Composite (+0.01%) eked out a record close by the slimmest of margins after opening solidly higher in record territory. The Dow Jones Industrial Average gained 0.3%, while the Russell 2000 fell 1.0%.
Apple (AAPL 144.57, +2.55, +1.8%), Microsoft (MSFT 279.93, +2.27, +0.8%), Amazon.com (AMZN 3696.58, +20.84, +0.6%), and Alphabet (GOOG 2601.55, +6.13, +0.2%) which represent about 20% of the S&P 500's market capitalization, made a big difference in today's action alongside the S&P 500 industrials (+1.0%) and materials (+1.0%) sectors.
One of the bigger talking points, though, was the 10-yr yield falling below 1.30% intraday before settling the session at 1.32%, or five basis points below yesterday's settlement. The move was attributed to technical factors, short-covering activity, peak growth concerns, and expectations for inflation rates to moderate.
Interestingly, not all growth stocks keyed off the lower rates, e.g., Facebook (FB 350.49, -2.29, -0.7%), Tesla (TSLA 644.65, -14.93, -2.3%), and NVIDIA (NVDA 814.87, -13.07, -1.6%), and cyclical stocks like materials and industrials still rose despite the reported growth concerns.
The energy sector (-1.7%), meanwhile, was a notable weak spot, falling 1.7% amid a turnaround in oil prices ($72.18/bbl, -1.24, -1.7%). The communication services (-0.1%) and consumer discretionary (-0.01%) sectors closed fractionally lower without support from FB and TSLA.
Regarding oil, the EIA said it expects prices to remain close to current levels through the second half of the year and then decline in 2022 as production outpaces demand. The Wall Street Journal suggested the United Arab Emirates wants to produce more oil right now so that it can invest in diversifying its economy before green energy alternatives weigh on demand.
Airline stocks and bank stocks were other pockets of weakness given the curve-flattening activity in the Treasury market (2s-10s spread narrowed by six bps) and concerns about reduced travel overseas because of the Delta variant. The U.S. Global Jets ETF (JETS 23.67, -0.43) declined 1.8%. The SPDR S&P Bank ETF (KBE 49.72, -0.22) declined 0.4%.
Separately, the FOMC Minutes from the June meeting didn't reveal any major surprises, leaving the Fed in a wait and see mode with no clear hawkish bias. This was good enough for the market, which didn't overly react to the minutes when they were released in the afternoon. The S&P 500 gained about six points between its release and the close.
The 2-yr yield increased one basis point to 0.22%. The U.S. Dollar Index increased 0.2% to 92.71.
Reviewing Wednesday's economic data:
Job openings increased to 9.209 million in May from a revised 9.193 million in April (from 9.286 million).
The weekly MBA Mortgage Applications Index decreased 1.8% following a 6.9% decline in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report and Consumer Credit for May on Thursday.
S&P 500 +16.0% YTD
Russell 2000 +14.1% YTD
Nasdaq Composite +13.8% YTD
Dow Jones Industrial Average +13.3% YTD
Crude futures settle in negative territory
07-Jul-21 15:30 ET
Dow +100.04 at 34677.41, Nasdaq +2.53 at 14666.18, S&P +15.31 at 4358.85
[BRIEFING.COM] The S&P 500 is up 0.4% and is on track to close at a record high.
One last look at the sector performances shows materials (+1.0%) and industrials (+1.0%) leading the advance with 1% gains despite reported growth concerns, while the energy (-1.2%) and communication services (-0.1%) sectors trade lower.
WTI crude futures settled lower by 1.7%, or $1.24, to $72.18/bbl. This was the second straight day that crude futures gave up an intraday gain.
Regarding oil, the EIA said it expects prices to remain close to current levels through the second half of the year and then decline in 2022 as production outpaces demand. The Wall Street Journal suggested the United Arab Emirates wants to produce more oil right now in order to invest in diversifying its economy before the threat of green energy alternatives hinders prices.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34577.37 -208.98 (-0.60%)
Nasdaq 14663.65 +24.32 (0.17%)
SP 500 4343.54 -8.80 (-0.20%)
10-yr Note +29/32 1.358
NYSE Adv 1174 Dec 2097 Vol 1.0 bln
Nasdaq Adv 1407 Dec 2879 Vol 4.4 bln
Industry Watch
Strong: Information Technology, Consumer Discretionary, Communication Services
Weak: Energy, Financials, Materials, Industrials
Moving the Market
-- Cyclical/value stocks lag, while growth stocks/mega-caps outperform amid peak growth concerns
-- 10-yr yield slips below 1.40%
-- Softer-than-expected June ISM Non-Manufacturing Index, Delta variant concerns
Broader market cools down while Nasdaq closes at record high
06-Jul-21 16:20 ET
Dow -208.98 at 34577.37, Nasdaq +24.32 at 14663.65, S&P -8.80 at 4343.54
[BRIEFING.COM] The S&P 500 declined 0.2% on Tuesday in an uneven session, snapping a streak of seven straight record closes. The benchmark index opened at a marginal all-time high, then dipped as much as 0.9% into negative territory before cutting its losses in the afternoon.
The Nasdaq Composite (+0.2%) set intraday and closing record highs with a modest gain, while the Dow Jones Industrial Average (-0.6%) and Russell 2000 (-1.4%) underperformed but closed off their lows. Declining issues outpaced advancing issues by roughly a 2:1 margin at the NYSE and Nasdaq.
Peak growth concerns were attributed to the broader decline, as the June ISM Manufacturing Index decelerated to 60.1% (Briefing.com consensus 63.0%) from a record-high 64.0% in May and a study out of Israel suggested that Pfizer's (PFE 39.27, -0.46, -1.2%) COVID-19 vaccine was less effective in preventing contraction of the Delta variant versus previous strains.
These growth concerns were manifested in some rotation out of value and into growth stocks; the sharp declines in the cyclical S&P 500 energy (-3.2%), financials (-1.6%), materials (-1.4%), and industrials (-0.9%) sectors; weaker oil ($73.42, -1.83, -2.4%) and copper ($4.25/lb, -0.03, -0.5%) prices; and a six-basis-point decline in the 10-yr yield to 1.37%.
The information technology (+0.4%) and consumer discretionary (+0.8%) sectors closed higher, largely due to sizable gains in Apple (AAPL 142.02, +2.06, +1.5%) and Amazon.com (AMZN 3675.74, +164.76, +4.7%). The real estate (+0.9%) and utilities (+0.4%) sectors also closed higher, benefiting from the lower rates.
The 4.7% move in Amazon shares was noteworthy, coinciding on the first trading day of Andy Jassy as CEO and amid news the Pentagon canceled the $10 billion JEDI cloud award that was originally given to Microsoft (MSFT 27.66, +0.01, unch).
Regarding the late-day comeback effort, it seems plausible that investors digested the news flow and decided to buy the dip in part due to a recognition that the market's record-setting streak happened despite the peak growth narrative. Others viewed today as a natural cool-down session for the market.
In other interesting developments, OPEC+ was unable to agree to further production increases, which temporarily boosted WTI futures to a six-year high, and China's DiDi Global (DIDI 12.49, -3.04, -19.6%) dropped 20% at the NYSE after its app was removed from app stores in China for violation of laws and regulation.
The 2-yr yield decreased three basis points to 0.21%. The U.S. Dollar Index increased 0.4% to 92.54.
Reviewing Tuesday's economic data, which featured the ISM Non-Manufacturing Index for June:
The ISM Non-Manufacturing Index for June decreased to 60.1% (Briefing.com consensus 63.0%) from a record-high 64.0% in May. The dividing line between expansion and contraction is 50.0%. The June reading marks the thirteenth straight month of growth for the services sector.
The key takeaway from the report is the understanding that services sector activity is still running at a fast pace, although it has moderated since May with some of the slowdown driven by services companies experiencing difficulties with employee turnover and finding qualified candidates.
The final reading for the June IHS Markit Services PMI checked in at 64.6, which was slightly lower from the preliminary reading of 64.8.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index, the JOLTS report for May, and the FOMC Minutes from the June meeting on Wednesday.
S&P 500 +15.6% YTD
Russell 2000 +15.2% YTD
Nasdaq Composite +13.8% YTD
Dow Jones Industrial Average +13.0% YTD
Crude futures settle sharply lower after reaching six-year high
06-Jul-21 15:25 ET
Dow -214.04 at 34572.31, Nasdaq +19.12 at 14658.45, S&P -10.21 at 4342.13
[BRIEFING.COM] The S&P 500 is down just 0.2% as investors continue to buy the dip. The Russell 2000 is down 1.5% after being down more than 2.0% earlier today.
One last look at the sector performances shows energy (-2.9%), financials (-1.5%), materials (-1.5%), and industrials (-1.0%) still struggling with sharp losses, while the consumer discretionary (+0.8%), information technology (+0.3%), real estate (+0.2%), and utilities (+0.1%) sectors trade higher.
WTI crude futures settled lower by 2.4%, or $1.83, to $73.42/bbl. Crude reached a six-year high above $76/bbl after OPEC+ was unable to reach an agreement for increased production.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34786.35 +152.82 (0.44%)
Nasdaq 14639.33 +116.95 (0.81%)
SP 500 4352.34 +32.40 (0.75%)
10-yr Note +2/32 1.437
NYSE Adv 1645 Dec 1579 Vol 693.7 mln
Nasdaq Adv 1679 Dec 2567 Vol 3.7 bln
Industry Watch
Strong: Information Technology, Consumer Discretionary, Communication Services
Weak: Energy, Financials
Moving the Market
-- S&P 500, Nasdaq, and Dow close at record highs following June employment report
-- Jobs growth was better than expected but other measures of labor market activity were relatively soft
-- Mega-caps did the heavy lifting
July 4th weekend preceded by a trio of record closes
02-Jul-21 16:20 ET
Dow +152.82 at 34786.35, Nasdaq +116.95 at 14639.33, S&P +32.40 at 4352.34
[BRIEFING.COM] The S&P 500 (+0.8%), Nasdaq Composite (+0.8%), and Dow Jones Industrial Average (+0.4%) closed at record highs on Friday, powered by the mega-caps following a June employment report that was deemed okay. The S&P 500 and Nasdaq also set all-time intraday highs, while the Russell 2000 fell 1.0% amid weakness in energy and financial stocks.
From a headline perspective, the employment report was great: nonfarm payrolls increased by 850,000 (Briefing.com consensus of 680,000). A closer look, however, indicated softening labor market conditions: the unemployment rate (5.9%) was higher than expected, average hourly earnings (+0.3%) increased less than expected, the average workweek (34.7) unexpectedly decreased, and the labor force participation rate (61.6%) was unchanged.
The market reportedly viewed the report as a reason to believe the Fed will continue to stay extraordinarily accommodative because it wasn't as robust or inclusive as it would have liked. Minority groups continued to experience higher rates of unemployment.
The gains in the S&P 500 were relatively broad-based since nine of its 11 sectors closed higher, but the gains weren't evenly distributed. The Vanguard Mega Cap Growth ETF (MGK 234.77, +2.66, +1.2%) rose 1.2%. The Invesco S&P 500 Equal Weight ETF (RSP 152.23, +0.45, +0.3%) increased just 0.3%.
The mega-caps lifted the S&P 500 information technology (+1.4%), consumer discretionary (+1.1%), and communication services (+0.9%) sectors to the top of the leaderboard. Conversely, the financials (-0.2%) and energy (-0.2%) sectors closed slightly lower.
Growth stocks in general benefited from a decline in long-term interest rates. The 10-yr yield decreased four basis points to 1.43% while the 2-yr yield decreased one basis point to 0.24%. The U.S. Dollar Index fell 0.4% to 92.24. WTI crude futures decreased 0.4%, or $0.31, to $74.92/bbl without an OPEC+ supply decision.
Separately, Johnson & Johnson (JNJ 168.98, +3.02, +1.8%) said its COVID-19 vaccine demonstrated persistent activity against the Delta variant with long-lasting durability of response. That news benefited JNJ shares, while IBM (IBM 140.02, -6.82, -4.6%), Boeing (BA 236.68, -3.05, -1.3%), and Broadcom (AVGO 468.17, -1.47, -0.3%) were undercut by negative-sounding news.
IBM announced President James Whitehurst is leaving the company. An older Boeing 737 cargo plane experienced engine trouble after take-off, forcing pilots to make an emergency landing in the ocean. The FTC charged Broadcom with illegal monopolization and proposed a consent order to settle the matter.
Reviewing Friday's economic data, which featured the June employment report:
The June Employment Situation report produced better than expected growth in nonfarm payrolls, weaker than expected growth in average hourly earnings, a higher than expected unemployment rate, and a weaker than expected length of the average workweek. Notably, it also showed no change in the labor force participation rate. In other words, the employment situation in June was okay, but not great.
The key takeaway for the market is that it is apt to convince the Fed that it needs to take additional time to watch the incoming data before it moves to lessen its dovish-minded accommodation. The tell in that respect is that the June employment situation still fell short of the Fed's stated goal to get employment back to maximum employment in a broad-based and inclusive fashion, as it showed much higher rates of unemployment for minority groups and little movement in participation rates.
June Nonfarm Payrolls (Actual 850K, Briefing.com consensus 680K; Prior revised to 583K from 559K)
June Nonfarm Private Payrolls (Actual 662K, Briefing.com consensus 570K; Prior revised to 516K from 492K)
June Avg. Hourly Earnings (Actual +0.3%; Briefing.com consensus +0.4%; Prior revised to +0.4% from +0.5%)
June Unemployment Rate (Actual 5.9%; Briefing.com consensus 5.7%; Prior 5.8%)
June Average Workweek (Actual 34.7; Briefing.com consensus 35.0; Prior revised to 34.8 from 34.9)
June labor force participation rate unchanged at 61.6%
The Trade Balance report for May showed a widening in the deficit to -$71.2 billion (Briefing.com consensus -$71.4 billion) from a downwardly revised $69.1 billion (from -$68.9 billion) in April. May exports were $1.3 billion more than April exports while May imports were $3.5 billion more than April imports.
The key takeaway from the report is the recognition that the export of goods increased just $0.4 billion, helped by a $0.8 billion increase in pharmaceutical preparations. In other words, foreign demand for U.S. goods was on the soft side in May, which will play into the peak growth narrative.
Factory orders for manufactured goods increased 1.7% m/m in May (Briefing.com consensus 1.7%) after decreasing an upwardly revised 0.1% (from -0.6%) in April. Shipments of manufactured goods were up 0.7% after increasing 0.2% in April.
The key takeaway from the report is that orders for manufactured goods bounced back quickly following a small decline in April that was the first decline in 12 months, implying that the April dip was a normal slowdown after a hot streak and that manufacturing activity is still running at a good recovery clip.
As a reminder, U.S. markets will be closed on Monday in observance of Independence Day. When the market reopens on Tuesday, investors will receive the ISM Non-Manufacturing Index for June.
Russell 2000 +16.8% YTD
S&P 500 +15.9% YTD
Dow Jones Industrial Average +13.7% YTD
Nasdaq Composite +13.6% YTD
Crude futures settle lower
02-Jul-21 15:30 ET
Dow +160.50 at 34794.03, Nasdaq +109.47 at 14631.85, S&P +30.61 at 4350.55
[BRIEFING.COM] The S&P 500 is up 0.7% and is trading at the 4350 level.
One last look at the sector performances shows information technology (+1.3%), consumer discretionary (+1.0%), and communication services (+0.9%) up by around 1%, while the financials (-0.2%) and utilities (-0.1%) sectors trade slightly lower.
WTI crude futures settled lower by 0.4%, or $0.31, to $74.92/bbl. An OPEC+ decision has yet to be announced after a ministerial meeting was delayed yesterday.
Market Snapshot
briefing.com
Dow 34633.53 +131.02 (0.38%)
Nasdaq 14522.38 +18.42 (0.13%)
SP 500 4319.94 +22.44 (0.52%)
10-yr Note 0/32 1.470
NYSE Adv 2071 Dec 1139 Vol 825.6 mln
Nasdaq Adv 2132 Dec 1843 Vol 4.3 bln
Industry Watch
Strong: Energy, Utilities, Communication Services, Health Care
Weak: Consumer Staples, Information Technology
Moving the Market
-- S&P 500 sets intraday and closing record highs in relatively broad-based advance
-- Energy stocks jumped ahead as crude prices topped $75/bbl on speculation for smaller-than-expected OPEC+ supply increase
-- Manufacturing activity for June expanded for 13th straight month, weekly initial claims declined to post-pandemic low
-- Value stocks outperformed
S&P 500 kicked off the third quarter on a record-setting note
01-Jul-21 16:15 ET
Dow +131.02 at 34633.53, Nasdaq +18.42 at 14522.38, S&P +22.44 at 4319.94
[BRIEFING.COM] The S&P 500 rose 0.5% on Thursday, kicking off the third quarter with another pair of intraday and closing record highs. The Russell 2000 pulled ahead with a 0.8% gain, the Dow Jones Industrial Average kept pace with a 0.4% gain, and the Nasdaq Composite underperformed with a 0.1% gain.
Value/cyclical stocks were at the forefront of a relatively broad-based advance, aided by encouraging manufacturing and initial claims data. Briefly, the June ISM Manufacturing Index checked in at 60.6% (Briefing.com consensus 61.0%) for its 13th straight month above 50.0% (expansionary activity), and weekly initial claims declined to a post-pandemic low of 364,000 (Briefing.com consensus 400,000).
Another tailwind, specifically for the energy stocks, was news that OPEC+ ministers reportedly reached a preliminary agreement to increase production by 400,000 bpd, starting in August and ending in December, which was less than expectations for a 500,000-bpd increase. A final agreement was reportedly delayed until tomorrow, though.
The S&P 500 energy sector climbed 1.7%, as WTI crude futures ($75.23/bbl, +1.73, +2.4%) topped $75 per barrel. The utilities sector (+1.1%) also gained more than 1.0%, while the consumer staples sector (-0.3%) was the only sector that closed lower.
The information technology sector (+0.1%) was held back by weakness in its semiconductor components following a disappointing earnings reaction in Micron (MU 80.11, -4.87, -5.7%). The Philadelphia Semiconductor Index fell 1.5%. NVIDIA (NVDA 808.48, +8.38, +1.1%) was a notable exception after its price target was raised to a Street-high $1000 from $750 at BMO Capital Markets.
Walgreens Boots Alliance (WBA 48.71, -3.90, -7.4%), meanwhile, suffered the same fate as Micron despite both companies reporting better-than-expected earnings results. WBA was the biggest loser in the consumer staples sector with a 7% decline.
U.S. Treasuries ended the session mostly lower amid the positive bias in stocks and encouraging economic data, but there appeared to be a lack of conviction in front of the June employment report tomorrow. The 10-yr yield increased two basis points to 1.47% while the 2-yr yield was flat at 0.25%. The U.S. Dollar Index increased 0.1% to 92.55.
Reviewing Thursday's economic data:
The June ISM Manufacturing Index checked in at 60.6% (Briefing.com consensus 61.0%), down from 61.2% in May. A number above 50.0% is indicative of expansion. June marked the 13th straight month of expansion for the manufacturing sector, albeit at a slightly slower pace than what was seen in May.
The key takeaway from the report is that it has validated the continuation of several trends: the manufacturing sector remains strong, inflation pressures are still prominent, and there is still difficulty in finding workers to meet the demand.
For the week ending June 26, initial claims decreased by 51,000 to 364,000 (Briefing.com consensus 400,000), which is the lowest level since March 14, 2020. Continuing claims for the week ending June 19 increased by 56,000 to 3.469 million.
The key takeaway from the report is that it shouldn't be a surprise to see initial jobless claims falling given the huge number of job openings there are and the increased reopening activity that is demanding new hires.
Total construction spending decreased 0.3% m/m in May (Briefing.com consensus +0.3%) following a downwardly revised 0.1% increase (from 0.2%) in April.
Total private construction declined 0.3% m/m while total public construction spending fell 0.2%.
Looking ahead, investors will receive the Employment Situation Report for June, the Trade Balance for May, and Factory Orders for May on Friday.
Russell 2000 +18.0% YTD
S&P 500 +15.0% YTD
Dow Jones Industrial Average +13.2% YTD
Nasdaq Composite +12.7% YTD
OPEC+ meeting reportedly delayed until tomorrow
01-Jul-21 15:30 ET
Dow +114.03 at 34616.54, Nasdaq +11.40 at 14515.36, S&P +21.03 at 4318.53
[BRIEFING.COM] The S&P 500 continues to trade at session highs with a 0.5% gain while the Russell 2000 outperforms with a 0.9% gain.
One last look at the sector performances shows energy (+1.7%) and utilities (+1.3%) leading the advance with gains over 1.0%, while the consumer staples (-0.2%) and information technology (-0.03%) sectors trade lower.
WTI crude futures settled higher by 2.4%, or $1.73, to $75.23/bbl. Reuters reported that sources indicated the OPEC+ ministerial meeting was delayed until Friday in other to further discuss oil output policy.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34502.51 +210.22 (0.61%)
Nasdaq 14503.96 -24.38 (-0.17%)
SP 500 4297.50 +5.70 (0.13%)
10-yr Note +2/32 1.454
NYSE Adv 1895 Dec 1400 Vol 1.1 bln
Nasdaq Adv 2010 Dec 2260 Vol 5.2 bln
Industry Watch
Strong: Energy, Consumer Staples, Financials, Industrials
Weak: Information Technology, Communication Services, Real Estate, Utilities
Moving the Market
-- S&P 500 ends second quarter with fifth-straight record close
-- Value stocks outperformed growth stocks amid rebalancing factors
-- 10-yr yield declined amid reported growth concerns linked to the Delta Covid variant
-- Preference towards U.S. stocks instead of foreign stocks
S&P 500 ends second quarter with fifth-straight record close
30-Jun-21 16:20 ET
Dow +210.22 at 34502.51, Nasdaq -24.38 at 14503.96, S&P +5.70 at 4297.50
[BRIEFING.COM] The S&P 500 increased 0.1% on Wednesday, and closed at a record high, as money flowed into the value stocks on this final day of the second quarter. Relative to the benchmark index, the Dow Jones Industrial Average (+0.6%) outperformed, the Russell 2000 (+0.1%) performed in-line, and the Nasdaq Composite (-0.2%) underperformed.
The energy sector (+1.3%) set the winning pace with a gain over 1.0%, followed by industrials (+0.8%), consumer staples (+0.7%), and financials (+0.5%). The information technology sector (-0.1%) limited the broader advance with a slight decline, although the real estate sector (-0.8%) declined the most.
Growth stocks had a terrific month of June at the expense of many value stocks, so it's likely that the balance shifted in favor of value due to rebalancing factors. The rotation was modest, evident by the 0.3% gain in the Russell 1000 Value Index versus the 0.2% decline in the Russell 1000 Growth Index, yet interesting because it happened despite reported growth concerns.
The 10-yr yield, a gauge for how investors are feeling about economic growth prospects, declined three basis points to 1.45%. Investors may have remained cautious given the restrictive measures governments in Asia and Europe have taken to curb the spread of the Delta Covid variant.
Compared to foreign equity markets, U.S. stocks (growth included) held up much better amid the perceived safety of U.S. markets and a belief that a growing vaccinated population will stave off the virus. Both the Vanguard Developed Markets Index Fund ETF (VEA 51.52, -0.35, -0.7%) and the iShares MSCI Emerging Markets ETF (EEM 55.15, -0.36, -0.7%) declined 0.7%.
The U.S. Dollar Index was another testament to the faith bestowed in U.S. markets, as it increased 0.3% to 92.35. Separately, the 2-yr yield decreased one basis point to 0.25%. WTI crude futures increased 0.6%, or $0.44, to $73.53/bbl ahead of an OPEC+ production meeting on Thursday.
In corporate news, Intel (INTC 56.14, -0.61, -1.1%) delayed the production of its Xeon server chip until 2022, Micron (MU 84.98, +2.05, +2.5%) was upgraded to Outperform from Market Perform at BMO Capital Markets ahead of its earnings report after the close, and China's Didi Global (DIDI 14.14, +0.14, +1.0%) had disappointing price action after an opening IPO pop.
Reviewing Wednesday's economic data:
The ADP Employment Change report estimated the addition of 692,000 private-sector payrolls in June (Briefing.com consensus 400,000) following a downwardly revised 886,000 increase (from 978,000) in May.
Pending home sales rose 8.0% m/m in May following a 4.4% decline in April.
The Chicago PMI decreased to 66.1 in June (Briefing.com consensus 70.0) from 75.2 in May.
The weekly MBA Mortgage Applications Index fell 6.9% following a 2.1% increase in the prior week.
Looking ahead, investors will receive the ISM Manufacturing Index for June, weekly Initial and Continuing Claims, the final IHS Markit Manufacturing PMI for June, and Construction Spending for May on Thursday.
Russell 2000 +17.0% YTD
S&P 500 +14.4% YTD
Dow Jones Industrial Average +12.7% YTD
Nasdaq Composite +12.5% YTD
Crude futures settle higher ahead of OPEC+ meeting
30-Jun-21 15:30 ET
Dow +204.41 at 34496.70, Nasdaq -12.13 at 14516.21, S&P +5.05 at 4296.85
[BRIEFING.COM] The S&P 500 is up 0.1%, and the Russell 2000 is up 0.3%. The benchmark index is on track to close at a record high.
One last look at the S&P 500 sectors shows energy (+1.3%), industrials (+0.8%), and financials (+0.4%) leading the advance, while the real estate (-0.7%), utilities (-0.5%), communication services (-0.2%), and health care (-0.3%) sectors lag in negative territory.
WTI crude futures settled higher by $0.44 (+0.6%) to $73.53/bbl ahead of an OPEC+ production meeting tomorrow.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34292.29 +9.02 (0.03%)
Nasdaq 14528.34 +27.83 (0.19%)
SP 500 4291.80 +1.19 (0.03%)
10-yr Note 0/32 1.475
NYSE Adv 1474 Dec 1745 Vol 804.2 mln
Nasdaq Adv 1675 Dec 2603 Vol 4.7 bln
Industry Watch
Strong: Information Technology, Consumer Discretionary, Health Care
Weak: Utilities, Communication Services, Energy, Consumer Staples
Moving the Market
-- S&P 500 and Nasdaq set intraday and closing record highs
-- Leadership from the information technology sector, while value stocks faded early gains
-- Possible quarter-end efforts to rebalance into growth stocks
-- Interest rates and the hedging premium remained low
S&P 500 hits the 4300 milestone
29-Jun-21 16:15 ET
Dow +9.02 at 34292.29, Nasdaq +27.83 at 14528.34, S&P +1.19 at 4291.80
[BRIEFING.COM] The S&P 500 (+0.03%) and Nasdaq Composite (+0.2%) eked out intraday and closing record highs on Tuesday, with the S&P 500 touching the 4300 level for the first time. The Dow Jones Industrial Average (+0.03%) closed fractionally higher like the S&P 500, while the Russell 2000 fell 0.6%.
The session started with a modest rotation into value/cyclical stocks, partly due to a slew of expected dividend increases announced by the banks, a better-than-expected 127.3 reading in the Conference Board's Consumer Confidence Index for June (Briefing.com consensus 120.0), and month-end rebalancing activity.
Value and cyclical stocks stocks faded their early gains throughout the day on no specific catalyst, although some suggested that with the quarter ending tomorrow, there might have been a greater propensity to position into growth stocks amid potentially lower economic growth rates in the second half of the year.
Apple (AAPL 136.33, +1.55, +1.2%) and Microsoft (MSFT 271.40, +2.68, +1.0%), the only two companies with market capitalizations over $2.0 trillion, powered the S&P 500 information technology sector (+0.7%) to the top of the sector leaderboard. The Philadelphia Semiconductor Index (+0.8%) was another pocket of strength.
Interestingly, AAPL and MSFT helped overshadow an advancing/declining line that favored declining issues at both the NYSE and Nasdaq. Eight of the 11 S&P 500 sectors closed lower, led by utilities (-1.7%) as the only sector with a decline over 1.0%.
The financials (-0.3%) and energy (-0.5%) sectors were arguably bigger disappointments, though, considering they were up by at least 1.0% in early action. The SPDR S&P Bank ETF (KBE 51.26, -0.36, -0.7%) extended its two-day decline to 3.1%.
Separately, the market presumably didn't lose sight of the valuation-oriented appeal that a 10-yr yield trading below 1.50% had on growth stocks. The 10-yr yield increased one basis point to 1.48%. Others would add that a CBOE Volatility Index (16.02, +0.26, +1.7%) well under 20.00 was supportive for overall risk sentiment.
The 2-yr yield increased one basis point to 0.26%. The U.S. Dollar Index increased 0.2% to 92.05. WTI crude futures increased 0.4%, or $0.26, to $73.08/bbl.
Reviewing Tuesday's economic data:
The Conference Board's Consumer Confidence Index jumped to 127.3 in June (Briefing.com consensus 120.0) from an upwardly revised 120.0 (from 117.2) in May. June marked the highest level for the index since the first pandemic surge in March 2020.
The key takeaway from the report is the understanding that consumer spending activity is expected to remain robust in the short-term, evidenced by a rise in plans to take a vacation and an increase in the proportion of consumers planning to buy homes, automobiles, and major appliances.
The FHFA Housing Price Index increased 1.8% m/m in April while the S&P Case-Shiller Home Price Index increased 14.9% yr/yr in April.
Looking ahead, investors will receive the ADP Employment Change report for June, the Chicago PMI for June, Pending Home Sales for May, and the weekly MBA Mortgage Applications Index on Wednesday.
Russell 2000 +16.9% YTD
S&P 500 +14.3% YTD
Nasdaq Composite +12.7% YTD
Dow Jones Industrial Average +12.0% YTD
Semiconductor stocks outperforming the broader market
29-Jun-21 15:30 ET
Dow +22.10 at 34305.37, Nasdaq +22.89 at 14523.40, S&P +0.60 at 4291.21
[BRIEFING.COM] The S&P 500 continues to trade flat, while the Russell 2000 lags with a 0.5% decline.
The Philadelphia Semiconductor Index (+0.7%) is one of today's stronger areas, featuring nice gains in AMD (AMD 89.93, +2.84, +3.3%), Qorvo (QRVO 195.88, +8.55, +4.6%), Skyworks Solutions (SWKS 191.32, +8.52, +4.7%), and Cirrus Logic (CRUS 85.82, +3.67, +4.5%).
Although many are forecasting economic growth rates to moderate, semiconductor companies have stated that chip demand remains strong and that the supply shortage should hopefully bottom later this year.
WTI crude futures settled higher by $0.26 (+0.4%) to $73.08/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34283.27 -150.57 (-0.44%)
Nasdaq 14500.51 +140.12 (0.98%)
SP 500 4290.61 +9.91 (0.23%)
10-yr Note +27/32 1.473
NYSE Adv 1395 Dec 1934 Vol 920.0 mln
Nasdaq Adv 2015 Dec 2329 Vol 4.2 bln
Industry Watch
Strong: Information Technology, Communication Services, Utilities
Weak: Energy, Financials, Industrials, Materials
Moving the Market
-- S&P 500 and Nasdaq extend reach into record territory
-- Cautious reports highlighting the spread of the Delta coronavirus variant and accompanying restrictions imposed in foreign countries
-- Growth stocks outperformed as 10-yr yield fell seven basis points to 1.47%
-- Cyclical/value stocks struggled in negative territory
Mega-caps push S&P 500 and Nasdaq further into record territory
28-Jun-21 16:15 ET
Dow -150.57 at 34283.27, Nasdaq +140.12 at 14500.51, S&P +9.91 at 4290.61
[BRIEFING.COM] The S&P 500 (+0.2%) and Nasdaq Composite (+1.0%) both set intraday and closing record highs on Monday, although it was the Nasdaq that leaped ahead by a sizable margin while the Dow Jones Industrial Average (-0.4%) and Russell 2000 (-0.5%) closed lower. The mega-cap stocks drove the outperformance of the Nasdaq.
Today's action was influenced by cautious reports highlighting the spread of the Delta coronavirus variant and the restrictions several countries imposed to curb infections. The macro backdrop fed into concerns about peak growth rates and contributed to defensive positioning in the heavily-weighted growth stocks and Treasuries.
These growth concerns were directly manifested in the underperformance of cyclical energy (-3.3%), financials (-0.8%), and industrials (-0.5%) sectors, a seven-basis-point decline in the 10-yr yield to 1.47%, and lower oil prices ($72.82/bbl, -1.14, -1.5%). Fortunately, the lower rates played a key part in helping drive the rotation into growth stocks.
The S&P 500 information technology sector (+1.1%), the Philadelphia Semiconductor Index (+2.5%), the Vanguard Mega Cap Growth ETF (MGK 231.01, +2.19, +1.0%), and the ARK Innovation ETF (ARKK 130.23, +4.74, +3.8%) -- places where many growth stocks reside -- notably outperformed the S&P 500.
In the mega-cap space, Facebook (FB 355.64, +14.27, +4.2%) rose 4% and hit a $1 trillion market capitalization after a U.S. district court dismissed the FTC's antitrust lawsuit against the company. NVIDIA (NVDA 799.40, +38.16, +5.0%) nearly hit a $500 billion market capitalization after several Arm customers voiced support for NVDA's acquisition of Arm.
The Facebook news gave the communication services sector (+0.8%) a nice intraday boost and helped the S&P 500 and Nasdaq finish on a high note. Separately, Boeing (BA 239.96, -8.42, -3.4%) weighed on the Dow, as reports suggested the company may not get FAA certification for its 777X until mid-2023.
The 2-yr yield declined two basis points to 0.25%. The U.S. Dollar Index increased 0.1% to 91.90.
Investors did not receive any economic data on Monday. Looking ahead, the Conference Board's Consumer Confidence Index for June, the FHFA Housing Price Index for April, and the S&P Case-Shiller Home Price Index for April will be released on Tuesday.
Russell 2000 +17.6% YTD
S&P 500 +14.2% YTD
Nasdaq Composite +12.5% YTD
Dow Jones Industrial Average +12.0% YTD
Facebook hits $1 trillion market cap after court dismisses FTC antitrust lawsuit
28-Jun-21 15:25 ET
Dow -184.72 at 34249.12, Nasdaq +126.35 at 14486.74, S&P +6.37 at 4287.07
[BRIEFING.COM] The S&P 500 is trading near session highs with a 0.2% gain while the Russell 2000 lags with a 0.7% decline.
Facebook (FB 354.33, +12.94, +3.8%) has recently reached a $1 trillion market capitalization after a U.S. district court dismissed an FTC antitrust lawsuit against the company. The communication services sector (+0.7%), where Facebook resides, is the second-best performing sector today.
WTI crude futures settled lower by $1.14 (-1.5%) to $72.82/barrel.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34433.84 +237.02 (0.69%)
Nasdaq 14360.39 -9.32 (-0.06%)
SP 500 4280.70 +14.21 (0.33%)
10-yr Note -25/32 1.527
NYSE Adv 1757 Dec 1456 Vol 2.8 bln
Nasdaq Adv 2314 Dec 1827 Vol 7.2 bln
Industry Watch
Strong: Financials, Utilities, Consumer Staples
Weak: Information Technology
Moving the Market
-- Financial stocks led the S&P 500 to new record highs
-- Long-term interest rates increased following some hot PCE data for May
-- Banks easily passed the Fed's latest stress test
-- Nike (NKE) rose 15% on strong earnings report/upbeat guidance
Financial stocks lead S&P 500 to another record close
25-Jun-21 16:25 ET
Dow +237.02 at 34433.84, Nasdaq -9.32 at 14360.39, S&P +14.21 at 4280.70
[BRIEFING.COM] The S&P 500 (+0.3%) set new intraday and closing record highs on Friday, largely due to strength in the financial stocks. PCE inflation data for May remained on the hotter side, which contributed to a bump in long-term interest rates.
The Dow Jones Industrial Average outperformed with a 0.7% gain, while the Nasdaq Composite (-0.1%) closed lower as the higher rates clipped its growth-stock components. The Russell 2000 (+0.03%) erased its intraday gain in the last ten minutes of action, as trading volume surged at the close amid the annual FTSE Russell index rebalance.
Specifying the data, the PCE Price Index for May rose 0.4% m/m and the core-PCE Price Index, which excludes food and energy, rose 0.5% m/m (Briefing.com consensus 0.6%). On a year-over-year basis, the Fed's preferred measures of inflation were up 3.9% and 3.4%, respectively. The 10-yr yield increased five basis points to 1.54% after an initial muted reaction.
The higher rates naturally worked in the favor of the S&P 500 financials sector (+1.3%), which was further supported by expectations for increases to share buyback programs and/or dividend payments after a positive showing in the Fed's latest stress test. The utilities sector (+1.1%) joined the financials sector with a gain over 1.0%.
The information technology sector (-0.2%) was the only sector that closed lower, which really held back the benchmark index given it's the most heavily-weighted sector in the S&P 500. Money seemed to prefer the value/cyclical stocks, many of which saw renewed strength this week.
Nike (NKE 154.35, +20.75, +15.5%) and CarMax (KMX 127.40, +7.97, +6.7%) stood out with nice earnings-driven gains, especially Nike's 15% move after also issuing upbeat FY22 guidance. FedEx (FDX 291.95, -10.99, -3.6%), on the other hand, underwhelmed shareholders with its small EPS beat.
The 2-yr yield was unchanged at 0.27%. The U.S. Dollar Index was little changed at 91.78. WTI crude futures rose 1.0%, or $0.75, to $74.06/bbl.
Reviewing Friday's economic data:
Personal income decreased 2.0% month-over-month in May (Briefing.com consensus -2.5%), driven by an 11.8% decline in government social benefits, while personal spending was unchanged (Briefing.com consensus +0.3%) following an upwardly revised 0.9% increase (from +0.5%) in April. The PCE Price Index jumped 0.4% month-over-month and was up 3.9% year-over-year (versus 3.6% in April). The core-PCE Price Index, which excludes food and energy, rose 0.5% and was up 3.4% year-over-year (versus 3.1% in April).
The key takeaway from the report is the initial reaction to it. The inflation readings are eye-popping, yet the futures for the major indices went up in their wake while long-term bond yields barely moved. The seeming connection in those reactions is that this is at, or close to, peak inflation, meaning market participants are anticipating better inflation news in coming months.
The final June reading for the University of Michigan Index of Consumer Sentiment slipped to 85.5 (Briefing.com consensus 86.4) from the preliminary reading of 86.4. The final reading for May was 82.9.
The key takeaway from the report is the understanding that the uptick in sentiment in June was driven by households with incomes above $100,000 and their view of future economic prospects.
Investors will not receive any notable economic data on Monday.
Russell 2000 +18.2% YTD
S&P 500 +14.0% YTD
Dow Jones Industrial Average +12.5% YTD
Nasdaq Composite +11.4% YTD
Russell 2000 outperforms ahead of annual index rebalance
25-Jun-21 15:30 ET
Dow +257.92 at 34454.74, Nasdaq +1.80 at 14371.51, S&P +15.36 at 4281.85
[BRIEFING.COM] The S&P 500 is up 0.4% while the Russell 2000 is up 0.7% in front of the annual FTSE Russell index rebalance at the close. Trading volume is expected to surge amid this rebalancing.
One last look at the S&P 500 sectors shows financials (+1.3%) still leading the advance as the only sector up more than 1.0%. The utilities sector (+0.9%) follows behind, while the information technology sector (-0.1%) bucks the positive trend amid the rise in long-term interest rates.
WTI crude futures settled higher by 1.0%, or $0.75, to $74.06/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34196.82 +322.58 (0.95%)
Nasdaq 14369.71 +97.98 (0.69%)
SP 500 4266.49 +24.65 (0.58%)
10-yr Note -1/32 1.494
NYSE Adv 2256 Dec 1007 Vol 810.5 mln
Nasdaq Adv 2960 Dec 1233 Vol 4.3 bln
Industry Watch
Strong: Financials, Energy, Communication Services, Industrials
Weak: Utilities, Real Estate
Moving the Market
-- S&P 500 and Nasdaq set intraday and closing record highs
-- White House unveils a $1.2 trillion "Bipartisan Infrastructure Framework" that includes $579 billion in new spending
-- Optimism surrounding the Fed's stress test results after the close
-- FDA grants Breakthrough Therapy designation for Eli Lilly's (LLY) investigational antibody therapy for Alzheimer's disease
S&P 500 and Nasdaq close at record highs in government-induced rally
24-Jun-21 16:15 ET
Dow +322.58 at 34196.82, Nasdaq +97.98 at 14369.71, S&P +24.65 at 4266.49
[BRIEFING.COM] The S&P 500 (+0.6%) and Nasdaq Composite (+0.7%) set intraday and closing record highs on Thursday while the Dow Jones Industrial Average (+1.0%) and Russell 2000 (+1.3%) outperformed with gains of at least 1.0%. The bullish price action was driven in part by optimism surrounding government-related news.
Namely, the White House unveiled a $1.2 trillion "Bipartisan Infrastructure Framework" that included $579 billion in new spending, bank stocks rallied ahead of the Fed's stress test results after the close, and the FDA granted Breakthrough Therapy designation for Eli Lilly's (LLY 232.97, +15.87, +7.3%) investigational antibody therapy for Alzheimer's disease.
Nine of the 11 S&P 500 sectors contributed to the record-setting performance, paced by financials (+1.2%), energy (+0.9%), communication services (+0.8%), and industrials (+0.8%). The real estate (-0.5%) and utilities (-0.1%) sectors closed lower.
The consumer discretionary sector (+0.1%) featured continued strength in Tesla (TSLA 679.82, +23.25, +3.5%), which extended its weekly gain to 9%, but the sector was held back by Amazon.com (AMZN 3449.08, -54.74, -1.6%).
Some attributed the weakness in Amazon to the House Judiciary Committee advancing several antitrust bills, a report from CNBC highlighting Amazon's publicity surrounding its recent Prime Day event was more muted than previous years, and news that the Teamsters launched an effort to unionize the company's employees.
Separately, weekly initial jobless claims (411,000) stayed above 400,000 for the second straight week but the market overlooked the report in favor of expectations that the labor market will greatly improve in the fall. On a related note, the bipartisan infrastructure framework invests two-thirds of the resources proposed in President Biden's American Jobs Plan, which could ultimately aid in the recovery effort.
Elsewhere, the 10-yr yield settled unchanged at 1.49%, which remained supportive for the stock market. The 2-yr yield increased three basis points to 0.27%. The U.S. Dollar Index was little changed at 91.78. WTI crude futures increased 0.3%, or $0.22, to $73.31/bbl.
Reviewing Thursday's economic data:
Initial jobless claims for the week ending June 19 decreased by 7,000 to 411,000 (Briefing.com consensus 380,000). Continuing claims for the week ending June 12 were 3.390 million, which is the lowest since March 21, 2020.
The key takeaway from the report is that the initial claims level is still quite high, leaving ample room for improvement in a job market that is expected to strengthen in coming months.
Durable goods orders increased 2.3% month-over-month in May (Briefing.com consensus +2.8%) and were up 25.7% year-over-year. Orders, excluding transportation, increased 0.3% month-over-months (Briefing.com consensus +0.7%) and were up 17.7% year-over-year.
The key takeaway from the report was the strength seen in transportation equipment (+7.6%), which was driven by a 2.1% increase in orders for motor vehicles and equipment and a 27.4% increase in orders for nondefense aircraft and parts.
The third estimate for Q1 GDP was unchanged at 6.4%, as expected, while the third estimate for the GDP Price Deflator was also unchanged at 4.3%, as expected.
The key takeaway from the report is that it's another affirmation of the reopening strength seen in the U.S. economy, although its dated nature (we're almost done with Q2) leaves it devoid of market-moving impact.
The Advance report for International Trade in Goods for May showed a deficit of $88.1 billion, versus a revised $85.7 billion (from $90.6 billion) in April. The Advance report for Retail Inventories for May decreased 0.8%, while the Advance report for Wholesale Inventories for May increased 1.1%.
Looking ahead, investors will receive Personal Income and Spending for May, PCE Prices for May, and the final University of Michigan Index of Consumer Sentiment for June on Friday.
Russell 2000 +18.2% YTD
S&P 500 +13.6% YTD
Dow Jones Industrial Average +11.7% YTD
Nasdaq Composite +11.5% YTD
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 33945.58 +68.61 (0.20%)
Nasdaq 14253.27 +111.79 (0.79%)
SP 500 4246.44 +21.65 (0.51%)
10-yr Note +2/32 1.475
NYSE Adv 1757 Dec 1468 Vol 920.0 mln
Nasdaq Adv 2225 Dec 2034 Vol 4.3 bln
Industry Watch
Strong: Information Technology, Consumer Discretionary, Communication Services, Energy
Weak: Real Estate, Utilities
Moving the Market
-- Stock market trades slightly higher in mixed session
-- Growth stocks outpace value stocks
-- Fed Chair Powell testifies before the House Select Subcommittee on the Coronavirus Crisis
Growth stocks lift Nasdaq to record territory
22-Jun-21 16:20 ET
Dow +68.61 at 33945.58, Nasdaq +111.79 at 14253.27, S&P +21.65 at 4246.44
[BRIEFING.COM] The S&P 500 gained 0.5% on Tuesday in a session that featured leadership from the growth stocks and a congressional testimony from Fed Chair Powell. The Nasdaq Composite (+0.8%) outperformed and set intraday and closing record highs. The Dow Jones Industrial Average increased 0.2%, and the Russell 2000 increased 0.4%.
Before the Fed Chair spoke to the House Select Subcommittee on the Coronavirus Crisis in the afternoon, the S&P 500 was sporting a slightly positive bias and was leaning heavily on the growth stocks. The latter obfuscated the fact that declining issues were outpacing advancing issues at the both the NYSE and Nasdaq.
Fed Chair Powell didn't really provide any new information on monetary policy and instead spoke optimistically about the economic outlook. He said that factors that have weighed on the labor market and that have contributed to increased levels of inflation should both be transitory. In addition, Mr. Powell said he thinks there will be strong jobs creation this fall.
The broader market firmed up a little bit, particularly the small-cap stocks as the Russell 2000 was down 0.9% shortly after the open. The consumer discretionary sector (+1.0%) finished atop the S&P 500 sector standings with a 1% gain, while the utilities (-0.7%) and real estate (-0.4%) sectors were the only sectors that closed lower.
The consumer discretionary sector included a nice gain in Amazon.com (AMZN 3505.44, +51.48, +1.5%), which reportedly had a decent first day of its Prime Day event. All in all, it was still a session heavily influenced by large growth stocks like Amazon.
Apple (AAPL 133.98, +1.68, +1.3%), Microsoft (MSFT 265.51, +2.88, +1.1%), Facebook (FB 339.03, +6.74, +2.0%), and NVIDIA (NVDA 755.47, +18.38, +2.5%) rose more than 1.0%. The Vanguard Mega Cap Growth ETF (MGK 227.92, +2.34, +1.0%) increased 1.0%.
U.S. Treasuries settled slightly higher, pushing yields lower. The 2-yr yield decreased two basis points to 0.23%, and the 10-yr yield decreased one basis point to 1.47%. The U.S. Dollar Index decreased 0.2% to 91.73. WTI crude futures decreased 0.8%, or $0.56, to $73.08/bbl.
Reviewing Tuesday's economic data:
Existing home sales decreased 0.9% m/m in May to a seasonally adjusted annual rate of 5.80 million (Briefing.com consensus 5.71 million) from an unrevised 5.85 million in April. Total sales in May were up 44.6% from a year ago when they were depressed in the early stages of the pandemic.
The key takeaway from the report is that the supply of existing homes for sale remains extremely limited. That is driving up the pace of price increases well beyond the pace of income gains, which is going to create affordability pressures for prospective buyers, particularly first-time buyers.
Looking ahead, investors will receive New Home Sales for May, the Current Account Balance for the first quarter, preliminary IHS Markit Manufacturing and Services PMIs for June, and the weekly MBA Mortgage Applications Index on Wednesday.
Russell 2000 +16.3% YTD
S&P 500 +13.1% YTD
Dow Jones Industrial Average +10.9% YTD
Nasdaq Composite +10.6% YTD
Energy stocks outperforming despite lower oil prices
22-Jun-21 15:30 ET
Dow +163.73 at 34040.70, Nasdaq +126.96 at 14268.44, S&P +30.89 at 4255.68
[BRIEFING.COM] The S&P 500 is trading at session highs with a 0.7% gain.
One last look at the S&P 500 sectors shows consumer discretionary (+1.4%), energy (+0.9%), and information technology (+0.9%) setting the pace, while the utilities (-0.2%) and real estate (-0.1%) sectors still trade lower.
WTI crude futures settled lower by 0.8%, or $0.56, to $73.08/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 33876.97 +586.89 (1.76%)
Nasdaq 14141.48 +111.10 (0.79%)
SP 500 4224.79 +58.34 (1.40%)
10-yr Note -5/32 1.496
NYSE Adv 2400 Dec 818 Vol 1.0 bln
Nasdaq Adv 2380 Dec 1787 Vol 4.4 bln
Industry Watch
Strong: Materials, Energy, Industrials, Financials
Weak: Consumer Discretionary
Moving the Market
-- Value/cyclical stocks lead broad-based rally
-- S&P 500 bounces back above its 50-day moving average (4183)
Market kicks off summer with a rebound rally
21-Jun-21 16:15 ET
Dow +586.89 at 33876.97, Nasdaq +111.10 at 14141.48, S&P +58.34 at 4224.79
[BRIEFING.COM] The S&P 500 rose 1.4% on Monday in a rebound rally led by the value/cyclical stocks. The Dow Jones Industrial Average (+1.8%) and Russell 2000 (+2.2%) outpaced the benchmark index following poor performances last week, while the Nasdaq Composite (+0.8%) gained 0.8%.
The market really gained traction early in the session after the S&P 500 reclaimed its 50-day moving average (4184), which has acted as a strong measure of support over the past 14 months. Given this observation, and the lack of market-moving news, the bullish price action likely fed onto itself and stirred a fear of missing out on a technically-driven rally.
All 11 S&P 500 sectors and all 30 Dow components finished in positive territory, with the biggest gains scored in the cyclical sectors that sold off last week -- energy (+4.3%), financials (+2.3%), industrials (+2.2%), and materials (+2.1%). The consumer discretionary sector (+0.5%) increased the least with a modest gain.
Bank stocks showed notable strength, as the Treasury yield curve unwound some of last Friday's flattening activity. The SPDR S&P Bank ETF (KBE 51.46, +1.77, +3.6%) gained 3.6% after declining 7.6% in the prior two sessions.
The 10-yr yield increased three basis points to 1.48%, while the 2-yr yield decreased one basis point to 0.25%. The U.S. Dollar Index declined 0.4% to 91.86, providing some relief for commodities like WTI crude ($73.64/bbl, +1.97, +2.8%) and copper ($4.184/lb, +0.03, +0.6%).
Apple (AAPL 132.30, +1.84, +1.4%) and Microsoft (MSFT 262.63, +3.20, +1.2%) stealthily advanced more 1.0%, with MSFT setting record highs in the process. Semiconductor companies NVIDIA (NVDA 737.09, -8.46, -1.1%) and Advanced Micro Devices (AMD 82.59, -2.06, -2.4%) struggled on reports that retail prices have declined sharply in Europe.
Mid-cap companies FIGS (FIGS 42.61, +6.21, +17.1%) and ZipRecruiter (ZIP 23.51, +2.25, +10.6%) rallied on positive-minded analyst recommendations.
Investors did not receive any economic data on Monday. Looking ahead, investors will receive Existing Home Sales for May on Tuesday.
Russell 2000 +15.8% YTD
S&P 500 +12.5% YTD
Dow Jones Industrial Average +10.7% YTD
Nasdaq Composite +9.7% YTD
Crude futures settle sharply higher
21-Jun-21 15:20 ET
Dow +578.92 at 33869.00, Nasdaq +97.93 at 14128.31, S&P +55.29 at 4221.74
[BRIEFING.COM] The S&P 500 continues to trade higher by 1.3% in a mostly broad-based advance.
One last look at the S&P 500 sectors shows energy (+4.4%) way out in the lead with a 4.4% gain, followed by 2% gains in financials (+2.2%), industrials (+2.1%), and materials (+2.0%). The consumer discretionary sector continues to underperform with a 0.5% gain.
WTI crude futures settled higher by 2.8%, or $1.97, to $73.64/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 33823.45 -210.22 (-0.62%)
Nasdaq 14161.35 +121.67 (0.87%)
SP 500 4221.86 -1.84 (-0.04%)
10-yr Note +6/32 1.515
NYSE Adv 1122 Dec 2079 Vol 1.2 bln
Nasdaq Adv 1801 Dec 2339 Vol 4.5 bln
Industry Watch
Strong: Information Technology, Communication Services, Consumer Discretionary, Health Care
Weak: Financials, Materials, Industrials, Energy
Moving the Market
-- S&P 500 closes flat as growth stocks rally and value stocks fall
-- 10-yr yield retraced yesterday's post-FOMC pop, commodities were weak
-- Weekly initial claims unexpectedly increased to 412,000 (Briefing.com consensus 350,000)
S&P 500 closes flat as growth stocks rally and value stocks fall
17-Jun-21 16:15 ET
Dow -210.22 at 33823.45, Nasdaq +121.67 at 14161.35, S&P -1.84 at 4221.86
[BRIEFING.COM] The S&P 500 (-0.04%) closed flat on Thursday in a mixed session that included pronounced weakness in value/cyclical stocks and notable strength in growth stocks. The Nasdaq Composite gained 0.9%, while the Dow Jones Industrial Average (-0.6%) and Russell 2000 (-1.2%) underperformed in negative territory.
The divergence between growth and value was more plainly manifested in the 1.1% gain in the iShares S&P 500 Growth ETF (IVW 70.77, +0.74, +1.1%) and the 1.3% decline in the iShares S&P 500 Value ETF (IVE 146.34, -1.91, -1.3%). This disparity was exacerbated when the 10-yr yield took a precipitous intraday drop.
The 10-yr yield briefly fell 12 basis points to 1.47% before settling the session at 1.51%, or just above where it was trading prior to the FOMC statement yesterday. This retracement was interpreted as an acceptance of the Fed's view that a lot of inflation pressures have been, and should be, transitory and a complementary view that inflation/growth rates could be peaking.
Likewise, inflation pressures via commodity prices continued to deflate. Futures contracts for copper ($4.18/lb, -0.21, -4.7%), gold (1775.00/ozt, -87.00, -4.7%), and WTI crude ($71.07/bbl, -0.99, -1.4%) fell sharply amid a stronger U.S. dollar (91.94, +0.81, +0.9%).
Cyclical stocks, which really ran with the reflation story prior to June, took it on the chin today as investors continued to take profits given the unfavorable price action in Treasury yields and commodities. The S&P 500 energy (-3.5%), financials (-2.9%), materials (-2.2%), and industrials (-1.6%) sectors posted noticeable declines, while every other sector closed higher.
The mega-caps within the information technology (+1.2%), communication services (+0.6%), and consumer discretionary (+0.6%) sectors provided key support for the market amid the decline in long-term interest rates. The Vanguard Mega Cap Growth ETF (MGK 225.16, +2.80, +1.3%) rose 1.3%.
The health care sector (+0.8%) also outperformed, supported by 1) the Supreme Court upholding the Affordable Care Act, 2) news the U.S. will invest $3.2 billion on pills to treat COVID-19 and other viruses, and 3) Danaher (DHR 257.08, +12.34, +5.0%) agreeing to acquire Aldevron for $9.6 billion in cash.
The Fed-sensitive 2-yr yield increased one basis point to 0.22%, clinging onto the possibility that the Fed could hike rates sooner than previously indicated. One bit of news that likely didn't cause the Fed to want to rush policy changes, though, was the latest report on weekly initial claims, which unexpectedly increased to 412,000 (Briefing.com consensus 350,000).
Reviewing Thursday's economic data:
Initial claims for the week ending June 12 increased by 37,000 to 412,000 (Briefing.com consensus 350,000) from last week's downwardly revised level of 375,000 (from 376,000). Continuing claims for the week ending June 5 increased by 1,000 to 3.518 million from last week's upwardly revised level of 3.517 million (from 3.499 million).
The key takeaway from the report is that it underscores the volatile nature of the current labor market, as claims jumped against expectations for a drop to a new low since the start of the pandemic.
The Conference Board's Leading Economic Index (LEI) increased 1.3% in May (Briefing.com consensus 1.2%) after increasing a revised 1.3% (from 1.6%) in April.
The key takeaway from the report is that overall growth remained widespread with only two components of the index making small negative contributions.
The Philadelphia Fed Survey for June fell to 30.7 (Briefing.com consensus 30.0) from 31.5 in May.
There is no economic data of note scheduled for Friday.
Russell 2000 +15.8% YTD
S&P 500 +12.4% YTD
Dow Jones Industrial Average +10.5% YTD
Nasdaq Composite +9.9% YTD
Crude futures settle off session lows
17-Jun-21 15:30 ET
Dow -163.55 at 33870.12, Nasdaq +137.90 at 14177.58, S&P +4.11 at 4227.81
[BRIEFING.COM] The S&P 500 is trading higher by 0.1% while the Nasdaq is up 1.0% and on track to close at a record high.
One last look at the S&P 500 sectors shows information technology (+1.4%), consumer discretionary (+0.8%), communication services (+0.9%), and health care (+0.9%) leading the market higher, while the energy (-3.5%), financials (-2.8%), materials (-2.1%), and industrials (-1.4%) sectors continue to struggle with sharp losses.
WTI crude futures settled lower by 1.4%, or $0.99, to $71.07/bbl, although they were down below $70 per barrel earlier today.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34033.67 -265.66 (-0.77%)
Nasdaq 14039.68 -33.17 (-0.24%)
SP 500 4223.70 -22.89 (-0.54%)
10-yr Note -27/32 1.561
NYSE Adv 1227 Dec 1956 Vol 1.1 bln
Nasdaq Adv 1886 Dec 2209 Vol 4.6 bln
Industry Watch
Strong: Consumer Discretionary
Weak: Utilities, Consumer Staples, Materials
Moving the Market
-- Fed keeps rates near zero and the pace of asset purchases unchanged, as expected
-- Fed signals rate hike by end of 2023, versus prior expectations of leaving rates unchanged through 2023
-- Fed Chair Powell strikes accommodative tone in press conference
-- Housing starts and building permits data for May miss expectations
Stocks close mostly lower amid hawkish-sounding FOMC statement
16-Jun-21 16:15 ET
Dow -265.66 at 34033.67, Nasdaq -33.17 at 14039.68, S&P -22.89 at 4223.70
[BRIEFING.COM] The S&P 500 declined 0.5% on Wednesday, as the market weighed a hawkish-sounding FOMC policy announcement against an accommodative tone from Fed Chair Powell. The Nasdaq Composite (-0.2%) and Russell 2000 (-0.2%) both declined just 0.2% while the Dow Jones Industrial Average declined 0.8%.
To start, the FOMC did what most market observers were expecting: it kept the target range for the fed funds rate near zero and maintained the pace of asset purchases by at least $120 billion per month. The central bank also remained committed to the view that recent inflation pressures have largely been due to transitory factors.
The hawkish part stemmed from the Fed's interest-rate projections signaling a rate hike by the end of 2023, versus a prior indication of leaving rates unchanged through 2023. What's more, the Fed increased the interest on excess reserves to 0.15% from 0.10%, and the reverse repurchase rate was increased by five basis points to 0.05%.
The S&P 500 was down as much as 1.0% during the start of Fed Chair Powell's follow-up press conference while the fed-funds-sensitive 2-yr yield rose five basis points to 0.21%. The 10-yr yield touched 1.59% before settling at 1.57%, or seven basis points above yesterday's settlement. The U.S. Dollar Index rose 0.8% to 91.28.
The benchmark index briefly returned to pre-FOMC levels, reportedly after Fed Chair Powell said this was the "talking about talking about [tapering asset purchases]" meeting and that the Fed will provide advanced notice before announcing any decision to make changes to asset purchases. The Fed Chair once again reiterated that interest-rate projections are not a great forecasting tool.
Ten of the 11 S&P 500 sectors still closed in negative territory, though, including utilities (-1.5%), consumer staples (-1.2%), and materials (-1.2%) with losses over 1.0%. The consumer discretionary sector (+0.2%) was the only sector that closed higher, largely due to Amazon (AMZN 3415.25, +32.12, +1.0%) and Tesla (TSLA 604.87, +5.51, +0.9%).
In other developments, housing starts and building permits data for May missed consensus expectations, Citigroup (C 71.46, -2.36, -3.2%) warned trading revenue for the second quarter could drop 30% yr/yr, and Oracle (ORCL 77.08, -4.58, -5.6%) issued downside EPS guidance for its fiscal first quarter.
WTI crude futures settled relatively unchanged at $72.06/bbl.
Reviewing Wednesday's economic data:
Total housing starts increased 3.6% month-over-month to a seasonally adjusted annual rate of 1.572 million units (Briefing.com consensus 1.635 million). Total permits decreased 3.0% month-over-month to 1.681 million (Briefing.com consensus 1.730 million).
The key takeaway from the report is that while housing starts showed a larger than expected increase, building permits decreased in most regions, which is not going to help alleviate the ongoing supply shortage.
Import prices increased 1.1% in May, while import prices excluding oil increased 0.9%. Export prices increased 2.2% in May, while export prices excluding agriculture increased 1.7%.
The weekly MBA Mortgage Applications Index increased 4.2% following a 3.1% decline in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report, the Conference Board's Leading Economic Index for May, and the Philadelphia Fed Index for June on Thursday.
Russell 2000 +17.2% YTD
S&P 500 +12.5% YTD
Dow Jones Industrial Average +11.2% YTD
Nasdaq Composite +8.9% YTD
Stocks making a comeback
16-Jun-21 15:30 ET
Dow -152.41 at 34146.92, Nasdaq +6.99 at 14079.84, S&P -8.32 at 4238.27
[BRIEFING.COM] The S&P 500 is down just 0.2% after being down 1.0% not too long ago.
The financials (+0.5%), consumer discretionary (+0.4%), and energy (+0.1%) sectors are leading the comeback effort with modest gains, while the utilities (-1.3%) and consumer staples (-1.0%) sectors are down at least 1.0%.
WTI crude futures settled little changed at $72.06/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34299.33 -94.42 (-0.27%)
Nasdaq 14072.85 -101.29 (-0.71%)
SP 500 4246.59 -8.56 (-0.20%)
10-yr Note -1/32 1.508
NYSE Adv 1532 Dec 1705 Vol 865.0 mln
Nasdaq Adv 1615 Dec 2610 Vol 4.5 bln
Industry Watch
Strong: Energy, Industrials, Utilities, Financials
Weak: Real Estate, Information Technology, Communication Services, Consumer Discretionary
Moving the Market
-- Muted reaction to weaker-than-expected retail sales data and hotter-than-expected PPI data for May
-- Wait and see for the Fed decision tomorrow
-- Strength in energy stocks amid continued rise in oil prices
Modest index declines ahead of FOMC tomorrow
15-Jun-21 16:15 ET
Dow -94.42 at 34299.33, Nasdaq -101.29 at 14072.85, S&P -8.56 at 4246.59
[BRIEFING.COM] The S&P 500 declined 0.2% on Tuesday and traded slightly lower the entire the session, except for the opening tick, which marked an all-time high for the benchmark index. The Dow Jones Industrial Average (-0.3%) and Russell 2000 (-0.3%) performed similarly, while the Nasdaq Composite (-0.7%) underperformed.
Trading conviction was largely lacking in front of the Fed's policy decision tomorrow, although the S&P 500 energy sector (+2.1%) couldn't be stopped as oil prices ($72.07/bbl, +1.16, +1.6%) continued to rise. The information technology (-0.6%), communication services (-0.5%), and real estate (-1.0%) sectors underperformed.
Today's economic calendar featured a 1.3% m/m decline in retail sales for May (Briefing.com consensus -0.6%), a 0.8% m/m increase in the Producer Price Index (PPI) for May (Briefing.com consensus 0.5%), and 0.8% m/m increase in industrial production for May (Briefing.com consensus 0.7%).
The year-over-year increase in total PPI was 6.6%, yet the Treasury market (or stock market) barely reacted to the hotter-than-expected inflation data. The 10-yr yield settled unchanged at 1.50%, which was below the 1.53% level it reached soon after the hot CPI report last week.
It's fair to say the market was expecting producer inflation to be running a little hot given the inflation pressures highlighted in previous economic data and the incessant inflation commentary in recent weeks. Judgement might have been reserved for what the Fed has to say about inflation expectations and monetary policy tomorrow.
In other developments, the U.S. and EU agreed to suspend their tariff dispute regarding Boeing (BA 246.54, +1.40, +0.6%) and Airbus, and New York lifted its state-mandated COVID restrictions after the state reached its goal of 70% adult vaccinations.
The 2-yr yield increased one basis point to 0.16%. The U.S. Dollar Index was unchanged at 90.52. Copper futures fell 4.2%, or $0.19, to $4.34/bbl amid profit-taking interest, leaving it down 7% this month.
Reviewing Tuesday's large batch of economic data, which featured the Retail Sales report for May and the Producer Price Index for May:
Total retail sales fell 1.3% in May (Briefing.com consensus -0.6%) after an upwardly revised 0.9% increase in April (from 0.0%). Excluding autos, retail sales fell 0.7% (Briefing.com consensus 0.5%) after an upwardly revised flat reading for April (from -0.8%).
The key takeaway from the report is that decreases were recorded in almost all discretionary categories. However, April figures benefited from healthy upward revisions, which raised the bar for the May report. On a year-over-year basis, retail sales were up 28.1%.
The Producer Price Index for final demand increased 0.8% m/m in May (Briefing.com consensus 0.5%) after increasing 0.6% in April. The Producer Price Index for final demand, less food and energy rose 0.7% m/m (Briefing.com consensus 0.5%) for the second consecutive month. On a year-over-year basis, the Producer Price Index for final demand was up 6.6% in May versus 6.2% in April while the Producer Price Index for final demand, less food and energy was up 5.3% in May versus 4.6% in April.
The key takeaway from the report is that it showed a continuation of broad-based price pressures at the producer level, which will fuel continued concerns about overall inflation.
Total industrial production increased 0.8% in May (Briefing.com consensus 0.7%) after a downwardly revised 0.1% uptick in April (from 0.7%). The capacity utilization rate increased to 75.2% (Briefing.com consensus 75.1%) from a downwardly revised 74.6% in April (from 74.9%).
The key takeaway from the report is that it showed a rebound in motor vehicle assemblies, which is an encouraging sign about a sector that has been significantly impacted by the semiconductor shortage. Total industrial production was up 16.3% yr/yr, but still 1.4% below its pre-pandemic (February 2020) level. The capacity utilization rate of 75.2% is 4.4 percentage points below its long-run average.
The NAHB Housing Market Index for June decreased by two points to 81 (Briefing.com consensus 83.0).
The Empire State Manufacturing Survey decreased to 17.4 in June (Briefing.com consensus 20.0) from 24.3 in May.
Business inventories decreased 0.2% m/m in April (Briefing.com consensus -0.1%) following a downwardly revised 0.2% increase (from +0.3%) in March.
Looking ahead, investors will receive the FOMC Rate Decision, Housing Starts and Building Permits for May, Export and Import Prices for May, and the weekly MBA Mortgage Applications Index on Wednesday.
Russell 2000 +17.5% YTD
S&P 500 +13.1% YTD
Dow Jones Industrial Average +12.1% YTD
Nasdaq Composite +9.2% YTD
Crude futures settle above $72 per barrel
15-Jun-21 15:30 ET
Dow -93.97 at 34299.78, Nasdaq -109.87 at 14064.27, S&P -8.26 at 4246.89
[BRIEFING.COM] The S&P 500 is down 0.2%, and the Russell 2000 is down 0.3%.
One final glance at the sector performances before the close shows energy (+1.9%) up about 2.0% as oil prices continue to rise. Conversely, the information technology (-0.7%), real estate (-0.9%), and consumer discretionary (-0.5%) sectors underperform in negative territory.
WTI crude futures settled higher by 1.6%, or $1.16, to $72.07/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34393.75 -85.85 (-0.25%)
Nasdaq 14174.14 +104.72 (0.74%)
SP 500 4255.15 +7.71 (0.18%)
10-yr Note -3/32 1.486
NYSE Adv 1505 Dec 1762 Vol 881.5 mln
Nasdaq Adv 2032 Dec 2248 Vol 4.3 bln
Industry Watch
Strong: Information Technology, Communication Services
Weak: Materials, Financials, Industrials
Moving the Market
-- Large-cap technology/growth stocks outperformed value/cyclical stocks
-- Cautious-minded rotation ahead of FOMC policy statement on Wednesday
-- S&P 500 and Nasdaq close at record highs
Strong finish lifts S&P 500 and Nasdaq to new heights
14-Jun-21 16:15 ET
Dow -85.85 at 34393.75, Nasdaq +104.72 at 14174.14, S&P +7.71 at 4255.15
[BRIEFING.COM] The S&P 500 (+0.2%) eked out intraday and closing record highs on Monday, helped by an unprovoked wave of buyers in the last 30 minutes of action. The Nasdaq Composite (+0.7%) outperformed and closed at its first record high since April amid increased demand for large-cap technology stocks.
The Dow Jones Industrial Average (-0.3%) and Russell 2000 (-0.4%) underperformed in negative territory.
The information technology (+1.0%) and communication services (+0.7%) sectors were steady leaders for most of the day, while the materials (-1.3%), financials (-1.0%), and industrials (-0.5%) struggled throughout the day.
Growth stocks like Apple (AAPL 130.48, +3.13, +2.5%), Facebook (FB 336.77, +5.51, +1.7%), and Tesla (TSLA 617.69, +7.80, +1.3%) easily outpaced value/non-tech stocks like JPMorgan Chase (JPM 157.57, -2.72, -1.7%), Caterpillar (CAT 219.01, -1.69, -0.8%), and Dow Inc. (DOW 66.96, -1.04, -1.5%) on no specific macro developments.
This was interesting because the 10-yr yield increased four basis points to 1.50%, which would normally have favored JPM and undercut growth stocks on any other day. Tesla even received a price-target cut to $812 from $974 at Canaccord Genuity.
Presumably, investors continued to take profits in cyclical stocks, and rotate into growth stocks, as a precaution ahead of the FOMC policy decision on Wednesday. Caterpillar, for instance, extended its monthly decline to over 9.0%.
To be fair, JPMorgan CEO Jamie Dimon did provide lower-than-expected forecasts for trading revenue and net interest income at the Morgan Stanley U.S. Financials Conference. The divergence between growth and value had already taken shape prior to his comments, though.
Separately, Novavax (NVAX 207.71, -1.97, -0.9%) said its COVID-19 vaccine had an overall efficacy rate of 90.4% in a Phase 3 trial. NVAX shares faded an early 9.5% gain in a sell-the-news reaction.
The 2-yr yield was unchanged at 0.15%. The U.S. Dollar Index decreased 0.1% to 90.50. WTI crude futures decreased 0.1%, or $0.09, to $70.91/bbl.
Investors did not receive any economic data on Monday. Looking ahead to Tuesday, key reports will include Retail Sales for May, the Producer Price Index for May, and Industrial Production and Capacity Utilization for May.
Russell 2000 +17.8% YTD
S&P 500 +13.3% YTD
Dow Jones Industrial Average +12.4% YTD
Nasdaq Composite +10.0% YTD
Crude futures settle fractionally lower
14-Jun-21 15:25 ET
Dow -213.96 at 34265.64, Nasdaq +49.96 at 14119.38, S&P -8.56 at 4238.88
[BRIEFING.COM] The S&P 500 continues to trade lower by 0.2%. Any positive finish would be good for a record close, although that's not looking too likely right now since the S&P 500 has shown very little life all day. Can never count out a last-minute wave of buyers, though.
One last look at the sector performances shows financials (-1.4%), materials (-1.4%), and industrials (-0.8%) still struggling at the bottom of the rankings, while the information technology (+0.5%) and communication services (+0.4%) sectors are the only sectors trading higher right now.
WTI crude futures settled lower by 0.1%, or $0.09, to $70.91/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34479.60 +13.36 (0.04%)
Nasdaq 14069.42 +49.09 (0.35%)
SP 500 4247.44 +8.26 (0.19%)
10-yr Note -2/32 1.460
NYSE Adv 2147 Dec 1113 Vol 824.7 mln
Nasdaq Adv 2645 Dec 1588 Vol 4.1 bln
Industry Watch
Strong: Information Technology, Financials, Consumer Discretionary
Weak: Health Care, Real Estate, Energy
Moving the Market
-- S&P 500 closes at another record high in tight-ranged session for the large-caps
-- Riskier, smaller stocks outperformed
-- 10-yr yield touched lowest level since late February and the CBOE Volatility Index closed at lowest level since February 2020
S&P 500 ekes out another closing record high
11-Jun-21 16:15 ET
Dow +13.36 at 34479.60, Nasdaq +49.09 at 14069.42, S&P +8.26 at 4247.44
[BRIEFING.COM] The S&P 500 (+0.2%), Nasdaq Composite (+0.4%), and Dow Jones Industrial Average (+0.04%) closed slightly higher on Friday, with the S&P 500 setting another closing record high. The Russell 2000 (+1.1%) and iShares Micro-Cap ETF (IWC 154.77, +1.46, +1.0%) outperformed, as investors broadened out their risk exposure.
Trading conviction at the large-cap level wasn't that strong given the tight-ranged index performances and no sector in the S&P 500 gained or lost more than 1.0%. The information technology (+0.6%) and financials (+0.6%) sectors showed relative strength, while the health care sector (-0.7%) underperformed.
Interestingly, the 10-yr yield fell to a three-month low at 1.43% overnight before settling at 1.46%, or unchanged from yesterday's settlement. The CBOE Volatility Index (VIX 15.65, -0.45, -2.8%) closed at its lowest since February 2020, representing a pre-pandemic reset of the hedging premium.
This reduced hedging interest synchronized with the riskier bets made in micro-cap stocks today. Presumably, investors felt comforted in the idea that there's still some time left before the Fed formally communicates a shift in policy. The FOMC meets next week, but economists polled by Reuters expect the Fed to announce a plan to taper asset purchases in August or September.
Separately, consumer sentiment improved modestly following a drop-off in May, according to the preliminary June reading for the University of Michigan Index of Consumer Sentiment. The index checked in at 86.4 (Briefing.com consensus 83.5), versus 82.8 in May. Consumers, however, remained concerned about rising prices for houses and vehicles.
In corporate news, NVIDIA (NVDA 713.01, +16.01, +2.3%) set all-time highs after agreeing to acquiring DeepMap, a startup dedicated to building high-definition maps for autonomous vehicles. Vertex Pharma (VRTX 193.02, -23.75, -11.0%) dropped 11% after halting the development of a lung disorder drug.
The 2-yr yield was unchanged at 0.15%. The U.S. Dollar Index rose 0.5% to 90.51. WTI crude futures rose 1.0%, or $0.70, to $71.00/bbl.
Reviewing Friday's economic data:
The preliminary June reading for the University of Michigan Index of Consumer Sentiment increased to 86.4 (Briefing.com consensus 83.5) from the final reading of 82.8 for May.
The key takeaway from the report is that, even though inflation expectations softened some, rising inflation remained a top concern for consumers.
Investors will not receive any notable economic data on Monday.
Russell 2000 +18.3% YTD
S&P 500 +13.1% YTD
Dow Jones Industrial Average +12.7% YTD
Nasdaq Composite +9.2% YTD
Crude futures continue to rise
11-Jun-21 15:30 ET
Dow -40.35 at 34425.89, Nasdaq +23.05 at 14043.38, S&P +0.60 at 4239.78
[BRIEFING.COM] The S&P 500 is up fractionally and is on track to close at a record high should it close in positive territory.
One last look at the S&P 500 sectors shows information technology (+0.4%) and financials (+0.4%) outperforming with modest gains, while the health care (-0.9%) and real estate (-0.8%) sectors are underperforming. No sector is up or down more than 1.0%.
WTI crude futures continued to rise and settled higher by 1.0%, or $0.70, to $71.00/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34466.24 +19.10 (0.06%)
Nasdaq 14020.33 +108.58 (0.78%)
SP 500 4239.18 +19.63 (0.47%)
10-yr Note +4/32 1.449
NYSE Adv 1733 Dec 1525 Vol 887.8 mln
Nasdaq Adv 2236 Dec 1996 Vol 4.8 bln
Industry Watch
Strong: Health Care, Consumer Staples, Information Technology, Utilities, Real Estate
Weak: Financials, Materials, Industrials, Energy
Moving the Market
-- S&P 500 sets all-time highs while cyclical stocks and small-caps underperformed
-- CPI data for May was hotter than expected; weekly initial claims declined to new post-pandemic low
-- 10-yr yield pops then dips below flat line at 1.46%
S&P 500 gets over the hump and closes at record high
10-Jun-21 16:15 ET
Dow +19.10 at 34466.24, Nasdaq +108.58 at 14020.33, S&P +19.63 at 4239.18
[BRIEFING.COM] The S&P 500 gained 0.5% on Thursday, setting intraday and closing record highs in the process, as the market reacted positively to a hotter-than-expected Consumer Price Index (CPI) for May and a weekly initial claims trend that continued to improve.
The Nasdaq Composite (+0.8%) outperformed and closed near session highs, while the Dow Jones Industrial Average increased just 0.1% and the Russell 2000 decreased 0.7%. The underperformance of the Dow and Russell 2000, which are more cyclically-oriented, contradicted any growth optimism.
Briefly, total CPI rose 0.6% m/m in May (Briefing.com consensus 0.4%) and core CPI, which excludes food and energy, rose 0.7% m/m (Briefing.com consensus 0.4%). The year-over-year increases garnered the headlines, though, with total CPI up 5.0% and core CPI up 3.8%. In addition, weekly initial claims totaled 375,000 (Briefing.com consensus 365,000), which was its lowest level since March 14, 2020.
Despite the economic data feeding into reflationary/reopening themes, the market was guided by counter-cyclical sectors like health care (+1.7%), real estate (+1.0%), and consumer staples (+0.7%). The information technology sector (+0.8%) was another key leader alongside the mega-caps, excluding Apple (AAPL 126.11, -1.02, -0.8%).
Note, it didn't start that way. The financials (-1.1%), materials (-0.6%), industrials (-0.5%), and energy (-0.1%) sectors, which closed lower today, were among the leaders shortly after the open. The Dow was up as much as 0.8% and the small-cap Russell 2000 was up as much as 0.5%.
The inflation-sensitive 10-yr yield reasonably jumped to 1.53% soon after the CPI report, supporting the early move in the financials sector, but quickly turned around and settled at 1.46%. This was three basis points below yesterday's settlement.
Presumably, the Treasury market defaulted to its Fed-influenced view that a lot of inflation pressures will be transitory while potential harboring some peak growth rate concerns. A separate viewpoint suggested cyclical stocks succumbed to a sell-the-news reaction after outperforming so far this year.
The 2-yr yield increased one basis point to 0.15%. The U.S. Dollar Index decreased 0.1% to 90.06. WTI crude futures rose 0.6%, or $0.40, to $70.30/bbl.
Reviewing Thursday's economic data:
Total CPI increased 0.6% month-over-month in May (Briefing.com consensus 0.4%), with a 7.3% increase in the index for used cars and trucks accounting for about one-third of that increase. Core CPI, which excludes food and energy, jumped 0.7% (Briefing.com consensus 0.4%). On a year-over-year basis, total CPI was up 5.0% (vs. 4.2% in April), which was the largest increase since August 2008. Core CPI was up 3.8% year-over-year (vs. 3.0% in April), which was its largest increase since June 1992!
The key takeaway from the report, aside from it showing broad-based price increases, is that one can see the potential for stickier inflation looking at just the last six months when pandemic base effects weren't fully depressed. To wit, total CPI is running at an annualized rate of 5.8% over the last six months while core CPI is running at an annualized rate of 4.0%.
Initial claims for the week ending June 5 decreased by 9,000 to 375,000 (Briefing.com consensus 365,000), hitting their lowest level since March 14, 2020. Continuing claims for the week ending May 29 decreased by 258,000 to 3.499 million, which is the lowest since March 21, 2020.
The key takeaway from this report is that the trends are moving in a manner that reflects an economy that is moving with increased reopening vigor.
The Treasury Budget for May showed a $131.9 bln deficit, versus a $398.7 bln deficit in the same period a year ago. The budget data is not seasonally adjusted, so the May deficit can't be compared to the April deficit of $225.6 bln.
The fiscal year-to-date budget deficit is $2.06 trln versus -$1.88 trln for the same period a year ago. The budget deficit over the last 12 months is $3.32 trln versus -$3.58 trln in April.
Looking ahead, investors will receive the preliminary University of Michigan Index of Consumer Sentiment for June on Friday.
Russell 2000 +17.0% YTD
S&P 500 +12.9% YTD
Dow Jones Industrial Average +12.6% YTD
Nasdaq Composite +8.8% YTD
Crude futures settle back above $70 per barrel
10-Jun-21 15:30 ET
Dow +34.93 at 34482.07, Nasdaq +103.02 at 14014.77, S&P +20.00 at 4239.55
[BRIEFING.COM] The S&P 500 is up 0.4% and is still on track to close at a record high. Anything can happen in this final half-hour of action, though.
One last look at the S&P 500 sectors shows the health care (+1.7%), real estate (+0.9%), and information technology (+0.7%) sectors leading the market in gains, while the financials (-0.9%), materials (-0.4%), and industrials (-0.4%) sectors trade lower.
WTI crude futures settled higher by 0.6%, or $0.40, to $70.30/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34447.14 -152.68 (-0.44%)
Nasdaq 13911.75 -13.16 (-0.09%)
SP 500 4219.55 -7.71 (-0.18%)
10-yr Note +26/32 1.500
NYSE Adv 1538 Dec 1746 Vol 941.9 mln
Nasdaq Adv 1983 Dec 2239 Vol 5.6 bln
Industry Watch
Strong: Health Care, Utilities, Real Estate, Information Technology
Weak: Financials, Industrials, Materials, Energy, Consumer Discretionary
Moving the Market
-- S&P 500 faced strong resistance yet again at all-time levels
-- 10-yr yield settled near the bottom of three-month consolidation range, reflecting peak inflation expectations
-- Cyclical sectors underperformed
Another unsuccessful attempt at record highs
09-Jun-21 16:20 ET
Dow -152.68 at 34447.14, Nasdaq -13.16 at 13911.75, S&P -7.71 at 4219.55
[BRIEFING.COM] The S&P 500 decreased 0.2% on Wednesday and was unsuccessful yet again at setting new all-time highs. The Nasdaq Composite (-0.1%) and Dow Jones Industrial Average (-0.4%) also closed slightly lower while the Russell 2000 (-0.7%) underperformed with a 0.7% decline.
Overall price action was tight ranged for most of the session, fueling suspicions that the market was either teasing investors with record highs or market participants tacitly agreed to wait and see for tomorrow's CPI report for May.
The S&P 500 came within one point of its all-time intraday high (4238.04) in the opening minutes of action and slipped into the close after another rejection at its all-time closing high (4232.60).
Losses were concentrated in the cyclical financials (-1.1%), industrials (-1.0%), materials (-0.8%), and energy (-0.6%) sectors on no specific macro drivers, outweighing the gains in the health care (+1.0%), utilities (+0.9%), real estate (+0.2%), and information technology (+0.1%) sectors.
Notably, the 10-yr yield declined four basis points to 1.49%, settling near the bottom of its three-month consolidation range and signaling peak inflation expectations. The 2-yr yield remained unchanged at 0.14%. This curve-flattening activity acted as a headwind for the financials sector.
UPS (UPS 201.06, -8.70, -4.2%) struggled with a 4% decline, weighing on the industrials sector, after underwhelming shareholders with financial targets for 2023.
In the health care space, Merck (MRK 74.01, +1.64, +2.3%) signed a supply agreement with the U.S. government for a COVID-19 experimental pill. In addition, reports indicated that the government plans to purchase vaccine doses from Pfizer (PFE 39.81, +0.96, +2.5%) and Moderna (MRNA 217.44, +4.44, +2.1%) to donate to the world.
The U.S. Dollar Index increased 0.1% to 90.16. WTI crude futures settled lower by 0.3% (-$0.18) to $69.90/bbl.
Reviewing Wednesday's economic data:
Wholesale inventories increased 0.8% m/m in April (Briefing.com consensus 0.8%) following a downwardly revised 1.2% increase (from +1.3%) in March.
The weekly MBA Mortgage Applications Index decreased 3.1% following a 4.0% decline in the prior week.
Looking ahead, investors will receive the Consumer Price Index for May, the weekly Initial and Continuing Claims report, and the Treasury Budget for May on Thursday.
Russell 2000 +17.8% YTD
Dow Jones Industrial Average +12.6% YTD
S&P 500 +12.3% YTD
Nasdaq Composite +7.9% YTD
Crude futures settle slightly lower
09-Jun-21 15:25 ET
Dow -84.12 at 34515.70, Nasdaq +17.14 at 13942.05, S&P -0.34 at 4226.92
[BRIEFING.COM] The S&P 500 continues to trade unchanged or about six points below its all-time closing high (4232.60).
One last look at the S&P 500 sectors shows five sectors trading higher and six trading lower. The health care (+1.0%) and utilities (+0.9%) sectors are up about 1.0% while the financials (-0.9%) and industrials (-0.8%) sectors are down nearly 1.0%.
WTI crude futures retraced below $70.00 per barrel and settled lower by 0.3% (-$0.18) to $69.90/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34630.24 -126.15 (-0.36%)
Nasdaq 13881.72 +67.23 (0.49%)
SP 500 4226.52 -3.37 (-0.08%)
10-yr Note -2/32 1.569
NYSE Adv 1830 Dec 1431 Vol 887.0 mln
Nasdaq Adv 2717 Dec 1471 Vol 4.56 bln
Industry Watch
Strong: Real Estate, Health Care, Communication Services, Utilities
Weak: Financials, Industrials, Materials, Energy
Moving the Market
Market off to quiet start after subdued overnight session
China's May trade surplus smaller than expected
Infrastructure spending package still being discussed in Washington
Nasdaq Outperforms in Quiet Monday Trade
07-Jun-21 16:15 ET
Dow -126.15 at 34630.24, Nasdaq +67.23 at 13881.72, S&P -3.37 at 4226.52
[BRIEFING.COM] The stock market began the first full week of June on a quiet note. The S&P 500 (-0.1%) finished the day with a slight loss while the Dow (-0.4%) lagged and the Nasdaq (+0.5%) displayed relative strength.
The mixed finish served as a good representation of intraday action, as the Nasdaq stayed ahead throughout the day. Small caps also had a good showing, sending the Russell 2000 higher by 1.4%.
Equities started the day in flat fashion with the broader market slipping away from its opening level through the first couple hours of action. The S&P 500 reached the bottom of today's eleven-point range around noon, inching off its low into the afternoon.
Seven sectors finished the day in negative territory, but the materials sector (-1.2%) was the only group that lost more than 0.7%. Industrials (-0.7%) and financials (-0.6%) weighed on the broader market throughout the day while technology (unch) climbed off its low in the afternoon. Energy (-0.4%) pulled back after jumping nearly 7.0% last week.
The materials sector finished at the bottom of the leaderboard even though the sector was home to some M&A news. Vulcan Materials (VMC 177.96, -1.64, -0.9%) agreed to acquire US Concrete (USCR 73.87, +16.73, +29.3%) for $1.294 bln in cash, but only three smaller components of the materials sector finished the day in positive territory.
The weekend did not bring any notable developments from infrastructure negotiations in Washington. Lawmakers are expected to continue talking over the coming days while a $547 bln surface transportation bill will face a House committee markup on Wednesday.
Industrials were pressured by influential components like Union-Pacific (UNP 222.95, -3.22, -1.4%), Caterpillar (CAT 239.76, -4.26, -1.8%), and 3M (MMM 203.73, -2.32, -1.1%) while the Dow Jones Transportation Average (-0.2%) finished a bit ahead of the sector thanks in part to UPS (UPS 212.92, +2.29, +1.1%).
On the upside, real estate (+0.9%) held the lead throughout the day while communication services (+0.5%) and health care (+0.3%) also spent the day in positive territory.
Communication services received a boost from a push to new record highs in Alphabet (GOOG 2466.09, +14.33, +0.6%) and Facebook (FB 336.58, +6.23, +1.9%) even though the companies will be subjected to the new 15% global minimum tax, which received the green light from G-7 finance ministers over the weekend.
Health care was boosted by biotechnology after Biogen's (BIIB 395.85, +109.71, +38.3%) Alzheimer's treatment received FDA approval. Biogen soared nearly 40.0% while the iShares Nasdaq Biotechnology ETF (IBB 158.28, +5.26, +3.4%) jumped to a six-week high.
Treasuries finished with slim losses that lifted the 10-yr yield by a basis point to 1.57%.
Today's economic data was limited to the Consumer Credit report for April, which showed an $18.6 bln increase after increasing a downwardly revised $18.6 bln (from $25.8 bln) in March. The key takeaway from the report is that the expansion in April was driven entirely by nonrevolving credit. Revolving credit decreased, driven in part presumably by consumers' focus on using stimulus money to pay down revolving credit balances.
The NFIB Small Business Optimism Index for May (prior 99.8) will be released tomorrow at 6:00 ET, followed by the April Trade Balance (Briefing.com consensus -$68.6 bln; prior -$74.4 bln) at 8:30 ET and April job openings (prior 8.123 mln) at 10:00 ET.
Russell 2000 +17.4% YTD
Dow Jones Industrial Average +13.2% YTD
S&P 500 +12.5% YTD
Nasdaq Composite +7.7% YTD
Crude Oil Ends Lower
07-Jun-21 15:25 ET
Dow -133.91 at 34622.48, Nasdaq +71.02 at 13885.51, S&P -3.55 at 4226.34
[BRIEFING.COM] The S&P 500 remains lower by 0.1% with 30 minutes left in today's session.
Barring a final push into positive territory, the market is set to finish today just how it began. Four sectors continue hanging onto gains with only one sector--real estate (+1.1%)--up more than 1.0% while seven groups trade lower with just one group--materials (-1.3%)--down more than 1.0%. The top-weighted technology sector (-0.1%) has been rising steadily off its low to trade just below its flat line going into the home stretch.
Elsewhere, energy is down 0.5%, trimming its June gain to 6.2%. Crude oil also slipped 0.5%, or $0.33, ending today's pit session at $69.28/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34756.39 +179.35 (0.52%)
Nasdaq 13814.49 +199.98 (1.47%)
SP 500 4229.89 +37.04 (0.88%)
10-yr Note +20/32 1.560
NYSE Adv 2052 Dec 1185 Vol 801.9 mln
Nasdaq Adv 2471 Dec 1683 Vol 4.32 bln
Industry Watch
Strong: Technology, Health Care, Consumer Discretionary, Communication Services
Weak: Financials, Energy, Materials, Real Estate
Moving the Market
Nasdaq outperforms after weak showing on Thursday
May Employment Situation report misses headline expectations while unemployment rate decreases more than expected
Growth Stocks Return to Form
04-Jun-21 16:15 ET
Dow +179.35 at 34756.39, Nasdaq +199.98 at 13814.49, S&P +37.04 at 4229.89
[BRIEFING.COM] The stock market finished the week on a strong note as the Nasdaq (+1.5%) paced a daylong rally while the S&P 500 (+0.9%) and Dow (+0.5%) followed. The Dow and S&P 500 gained a respective 0.7% and 0.6% for the week while the Nasdaq advanced 0.5%.
Equities jumped out of the gate after the May jobs report showed continued growth in employment but at a pace that was not strong enough to prompt calls for an imminent tightening of monetary policy. The market followed its firmly higher start with a slow upward drift that continued into the afternoon.
Sectors that underperformed yesterday were at the forefront of today's rally with technology (+1.9%; +1.2% for the week) and communication services (+1.4%; +0.6% for the week) turning positive for the week while the consumer discretionary sector (+0.8%; -1.0% for the week) ended among today's leaders, but still finished the week behind most of the remaining groups.
The technology sector benefited from renewed strength in top components like Apple (AAPL 125.89, +2.35, +1.9%) and Microsoft (MSFT 250.79, +5.08, +2.1%) while chipmakers also pulled their weight with NVIDIA (NVDA 703.13, +24.34, +3.6%) spiking to a fresh record and the PHLX Semiconductor Index jumping 2.4%. Broadcom (AVGO 475.00, +10.20, +2.2%) revisited this week's high after beating Q2 expectations and issuing above-consensus revenue guidance for Q3.
Mega cap names also contributed to the strength in the communication services sector, showing no concern for indications that the G-7 is close to agreeing to a global minimum corporate tax rate of 15.0%. Alphabet (GOOG 2451.76, +47.15, +2.0%) hit a fresh record before trimming its gain.
The discretionary sector received significant support from Tesla (TSLA 599.05, +26.21, +4.6%) as the stock bounced off a two-week low amid a pushback to yesterday's report about a sharp slowdown in sales in China. Retailers underperformed with the SPDR S&P Retail ETF (XRT 94.01, -0.20, -0.2%) ticking lower but lululemon (LULU 329.52, +12.16, +3.8%) jumped almost 4.0% after beating Q1 expectations and issuing above-consensus guidance for the fiscal year.
Several sectors started the day in negative territory, but most were pulled higher during the daylong climb. The energy sector (+0.6%) showed some early weakness after gaining 6.0% over the past three days, but eventually turned positive, extending this week's gain to 6.7%. The growth-sensitive group received continued support from the price of oil, which rose $0.80, or 1.2%, to $69.61/bbl.
Treasuries finished the day on their highs with the 10-yr yield falling seven basis points to 1.56%. The benchmark yield slipped two basis points for the week, stopping just above last week's low.
Today's economic data was limited to the Employment Situation report and Factory Orders:
May nonfarm payrolls increased by 559,000 (Briefing.com consensus 720,000). The 3-month average for total nonfarm payrolls increased to 541,000 from 533,000 in April.
April nonfarm payrolls revised to 278,000 from 266,000. March nonfarm payrolls revised to 785,000 from 770,000
May private sector payrolls increased by 492,000 (Briefing.com consensus 650,000). April private sector payrolls revised to 219,000 from 218,000 March private sector payrolls revised to 724,000 from 708,000
May unemployment rate was 5.8% (Briefing.com consensus 5.9%), versus 6.1% in April
Persons unemployed for 27 weeks or more accounted for 40.9% of the unemployed versus 43.0% in April
The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 10.2%, versus 10.4% in April
May average hourly earnings increased 0.5% (Briefing.com consensus 0.2%) versus a 0.7% increase in April. Over the last 12 months, average hourly earnings have risen 2.0%, versus 0.4% for the 12 months ending in April
The average workweek in May was 34.9 hours (Briefing.com consensus 34.9), versus a downwardly revised 34.9 hours (from 35.0) in April. The labor force participation rate was 61.6%, versus 61.7% in April
Factory orders for manufactured goods decreased 0.6% m/m in April (Briefing.com consensus 0.5%) after increasing an upwardly revised 1.4% (from 1.1%) in March. Shipments of manufactured goods were up 0.4% after increasing 2.1% in March.
The key takeaway from the report is that, while there was a downturn in new orders for manufactured goods, that downturn followed eleven consecutive monthly increases, suggesting there was some normal slowing after a long streak of increases in orders for manufactured goods. Importantly, new orders for nondefense capital goods, excluding aircraft -- a proxy for business spending -- remained strong, rising 2.2%.
Monday's data will be limited to the 15:00 ET release of the Consumer Credit report for April (Briefing.com consensus $22.00 bln).
Russell 2000 +15.8% YTD
Dow Jones Industrial Average +13.6% YTD
S&P 500 +12.6% YTD
Nasdaq Composite +7.2% YTD
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34577.04 -23.34 (-0.07%)
Nasdaq 13614.53 -141.82 (-1.03%)
SP 500 4192.85 -15.27 (-0.36%)
10-yr Note -11/32 1.625
NYSE Adv 1403 Dec 1840 Vol 1.04 bln
Nasdaq Adv 1779 Dec 2322 Vol 5.32 bln
Industry Watch
Strong: Financials, Health Care, Energy
Weak: Technology, Consumer Discretionary, Communication Services, Materials
Moving the Market
Stocks retreat alongside weak showing from European markets
Biden administration negotiating infrastructure proposal with Republicans
Growth Stocks Weigh on Thursday
03-Jun-21 16:15 ET
Dow -23.34 at 34577.04, Nasdaq -141.82 at 13614.53, S&P -15.27 at 4192.85
[BRIEFING.COM] The stock market ended Thursday on a lower note, though the S&P 500 (-0.4%) was able to reclaim the bulk of its opening loss. The Dow (-0.1%) outperformed throughout the day while the Nasdaq (-1.0%) finished behind the broader market.
Equities started the day in negative territory after a shaky overnight session but the S&P 500 was able to find support near last week's low shortly after the open. The bounce, which took place against the backdrop of upbeat economic data, had the index back near its opening level about an hour after the open, but the market found resistance after approaching yesterday's closing level.
Reports of the Biden administration's changing tone on corporate taxation helped the S&P 500 accelerate its morning bounce. The administration is reportedly open to implementing a minimum rate of 15% instead of raising the top corporate rate to 28% from 21%, but daylong weakness in heavily-weighted sectors like technology (-0.9%), consumer discretionary (-1.2%) and communication services (-0.7%) prevented the benchmark index from turning positive.
The technology sector lagged throughout the day as some of its top components sputtered. Apple (AAPL 123.54, -1.52, -1.2%), Microsoft (MSFT 245.71, -1.59, -0.6%), MasterCard (MA 361.82, -5.03, -1.4%), and PayPal (PYPL 257.79, -4.38, -1.7%) kept the sector under pressure while chipmakers also struggled, sending the PHLX Semiconductor Index lower by 1.8%.
Technology was able to erase a portion of its loss and climb out of the basement of today's leaderboard while the discretionary sector fell to the bottom in the early afternoon. That slide was largely due to a stumble in Tesla (TSLA 572.84, -32.28, -5.3%), which fell to its lowest level in two weeks after The Information reported that the company's May orders in China were down 50% m/m.
On the upside, health care (+0.4%) and financials (+0.2%) outperformed throughout the day, as did lightly-weighted sectors like consumer staples (+0.5%), energy (+0.3%), and utilities (+0.5%). The energy sector padded this week's gain to 6.1% even though crude oil ended the day flat at $68.81/bbl. The flat finish was pretty good for the dollar-denominated commodity since the U.S. Dollar Index rose 0.6% to 90.48, reaching its best level since mid-May.
Continued speculative action in AMC (AMC 51.34, -11.21, -17.9%) had the stock revisiting its opening level from Wednesday during morning trade, followed by a charge into positive territory in the afternoon. The stock finished in the red while Bed Bath & Beyond (BBBY 31.90, -12.29, -27.8%) also reversed after yesterday's surge.
In airlines, Delta Air Lines (DAL 46.13, -1.64, -3.4%) raised the lower end of its Q2 revenue guidance, American Airlines (AAL 24.93, -0.89, -3.5%) reaffirmed its capacity and revenue guidance for Q2, while United Airlines (UAL 57.73, -2.56, -4.3%) announced a contract to purchase 15 supersonic jets that are expected to enter service by the end of the decade.
Treasuries ended the day in the red with the 10-yr yield rising three basis points to finish a tenth of a basis point below its 50-day moving average (1.626%).
Reviewing today's data:
Initial claims for the week ending May 29 decreased by 20,000 to 385,000 (Briefing.com consensus 395,000). Continuing claims for the week ending May 22 increased by 169,000 to 3.771 million.
The key takeaway from the report is the recognition that initial jobless claims fell below 400,000 for the first time since March 2020; however, the elevated level of continuing claims is apt to continue to drive the belief that enhanced unemployment benefits are acting as a disincentive to find new work.
The ADP Employment Change report pointed to the addition of 978,000 private-sector payrolls in May (Briefing.com consensus 675,000) after a downwardly revised increase of 654,000 (from 742,000) in April.
The ISM Non-Manufacturing Index for May increased to 64.0% (Briefing.com consensus 63.0%) from 62.7% in April. The dividing line between expansion and contraction is 50.0%. The May reading marks the twelfth straight month of growth for the services sector and is a record high for this series.
The key takeaway from the report is the understanding that services sector activity is still running at a fast pace -- a record pace -- on recovery activity that has also been accompanied by higher prices.
The Final IHS Markit Services PMI for May increased to 70.4 from 70.1 in the preliminary reading.
Q1 Productivity was unrevised at 5.4% (Briefing.com consensus 5.5%). Q1 unit labor costs, though, were revised to +1.7% (Briefing.com consensus -0.4%) from -0.3% given a 2.1-percentage point upward revision to hourly compensation.
The key takeaway from the report is the upward revision to unit labor costs and the worries it might stir about potential profit margin pressures in coming quarters should wage inflation accelerate further.
May Nonfarm Payrolls (Briefing.com consensus 720,000; prior 266,000), Nonfarm Private Payrolls (Briefing.com consensus 650,000; prior 218,000), Average Hourly Earnings (Briefing.com consensus 0.2%; prior 0.7%), Unemployment Rate (Briefing.com consensus 5.9%; prior 6.1%), and Average Workweek (Briefing.com consensus 34.9; prior 35.0) will be reported tomorrow at 8:30 ET, followed by April Factory Orders (Briefing.com consensus 0.5%; prior 1.1%) at 10:00 ET.
Russell 2000 +15.4% YTD
Dow Jones Industrial Average +13.0% YTD
S&P 500 +11.6% YTD
Nasdaq Composite +5.6% YTD
Crude Oil Ends Flat
03-Jun-21 15:25 ET
Dow -0.66 at 34599.72, Nasdaq -129.39 at 13626.96, S&P -13.24 at 4194.88
[BRIEFING.COM] The S&P 500 remains lower by 0.3% with 30 minutes left in today's session.
The market has spent the past hour in a narrow range after backing down from its intraday high, but the last few minutes of action always bring the potential for some closing volatility.
Six sectors continue trading lower while the utilities sector (+0.8%) remains ahead of energy (+0.4%). Crude oil, meanwhile, ended today's pit session essentially unchanged. WTI crude dipped $0.02 to $68.81/bbl after setting a fresh high for the year at $69.40/bbl. The flat finish could be seen as a sign of strength since the U.S. Dollar Index has climbed 0.7% to 90.50, reaching its best level since mid-May.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34600.38 +25.07 (0.07%)
Nasdaq 13756.35 +19.85 (0.14%)
SP 500 4208.12 +6.08 (0.14%)
10-yr Note +5/32 1.591
NYSE Adv 1797 Dec 1459 Vol 1.12 bln
Nasdaq Adv 2126 Dec 2082 Vol 5.00 bln
Industry Watch
Strong: Technology, Financials, Energy, Utilities, Real Estate
Weak: Materials, Consumer Discretionary, Communication Services, Industrials
Moving the Market
Crude oil seeks sixth gain over the past eight days
Technology sector providing early support
Growth stocks outperform
Flat Finish Masks Speculative Frenzy
02-Jun-21 16:25 ET
Dow +25.07 at 34600.38, Nasdaq +19.85 at 13756.35, S&P +6.08 at 4208.12
[BRIEFING.COM] The stock market finished a quiet midweek session on a slightly higher note with the S&P 500 (+0.1%) and Nasdaq (+0.1%) settling right above their flat lines.
The quiet finish was fitting for an equally quiet trading day that saw the major averages inch higher during the first two hours of action, followed by a slow slide into the early afternoon. The S&P 500 spent the day inside a 20-point range.
Six sectors ended the day in positive territory. The energy sector (+1.7%) continued its torrid start to the week and was followed by the lightly-weighted real estate sector (+1.4%) while top-weighted technology (+0.6%) held a modest gain throughout the day, keeping the S&P 500 in the green.
The relative strength in the technology sector was owed to big components like NVIDIA (NVDA 671.13, +20.55, +3.2%), Visa (V 229.66, +3.03, +1.3%), MasterCard (MA 366.85, +7.06, +2.0%), and PayPal (PYPL 262.17, +2.90, +1.1%) while Apple (AAPL 125.06, +0.78, +0.6%) caught up to the sector as the day went on. Chipmakers kept pace with the sector, sending the PHLX Semiconductor Index higher by 0.7%.
Energy received a boost from crude oil, which rose $1.00, or 1.5%, to $68.79/bbl after a brief rally past yesterday's high. Most components of the growth-sensitive sector climbed more than 1.0% with TechnipFMC (FTI 9.89, +0.92, +10.3%) spiking more than 10.0% with no news contributing to the jump.
Given its low share price and membership in a hot sector, TechnipFMC may have benefited from the same speculative fervor that sent AMC (AMC 62.55, +30.51, +95.2%) to a fresh record high. AMC was today's most traded stock by a long shot while Bed Bath & Beyond (BBBY 44.19, +16.93, +62.1%) also enjoyed a massive rally on heavy volume.
The materials sector (-0.9%) was today's weakest performer while the remaining laggards finished with much slimmer losses.
In earnings, Zoom Video (ZM 327.11, -0.61, -0.2%) finished little changed despite beating estimates and boosting its guidance while Advance Auto (AAP 191.33, -3.32, -1.7%) fell back below its 50-day moving average (193.52) after it too beat EPS estimates and boosted its guidance.
Treasuries climbed with the 10-yr yield slipping two basis points to 1.59%.
Economic data released today was limited to the weekly MBA Mortgage and the June Beige Book.
The weekly MBA Mortgage Index fell 4.0% as the Purchase Index decreased 3.1% while the Refinance Index fell 4.6%.
The Fed's June Beige Book noted that the economy expanded at a moderate pace between April and late May, though reports of shortages became more prevalent. Employment increased at a steady pace with most Fed Districts describing the growth as modest. Many firms continued struggling to fill low-wage positions and those for skilled tradespeople. However, the shortages resulted in only moderate wage growth. Price pressures continued building with selling prices rising moderately while the Atlanta District reported price pressures in the new home market resulting from heavy investor demand.
The May ADP Employment Change report (Briefing.com consensus 675,000; prior 742,000) will be released tomorrow at 8:15 ET, followed by revised Q1 Productivity (Briefing.com consensus 5.5%; prior 5.4%), revised Q1 Labor Costs (Briefing.com consensus -0.4%; prior -0.3%), weekly Initial Claims (Briefing.com consensus 395,000; prior 406,000), and Continuing Claims (prior 3.642 mln) at 8:30 ET; final May IHS Markit Services PMI (prior 70.1) at 9:45 ET; and May ISM Non-Manufacturing Index (Briefing.com consensus 63.0%; prior 62.7%) at 10:00 ET.
Russell 2000 +16.4% YTD
Dow Jones Industrial Average +13.1% YTD
S&P 500 +12.0% YTD
Nasdaq Composite +6.7% YTD
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34575.31 +45.86 (0.13%)
Nasdaq 13736.50 -12.26 (-0.09%)
SP 500 4202.04 -2.07 (-0.05%)
10-yr Note -3/32 1.614
NYSE Adv 2422 Dec 924 Vol 1.0 bln
Nasdaq Adv 2767 Dec 1512 Vol 4.1 bln
Industry Watch
Strong: Energy, Real Estate, Financials, Industrials, Materials
Weak: Health Care, Information Technology, Utilities, Consumer Staples
Moving the Market
-- Large-cap indices fade strong start and close little changed
-- Cyclical stocks outperformed in reopening trade, supported by better-than-expected manufacturing data
-- Oil prices rise and long-term interest rates ticked higher
Large-cap indices fade positive start and close little changed
01-Jun-21 16:15 ET
Dow +45.86 at 34575.31, Nasdaq -12.26 at 13736.50, S&P -2.07 at 4202.04
[BRIEFING.COM] The S&P 500 declined 0.1% on Tuesday after starting with a 0.7% gain and finding resistance at its all-time highs from last month. The Dow Jones Industrial Average (+0.1%) and Nasdaq Composite (-0.1%) also closed little changed and off early highs, while the Russell 2000 rose 1.1%.
The strong start was fueled by first-of-the-month inflows and a news cycle that fed into the reopening optimism: better-than-expected manufacturing PMIs for May out of the U.S. and Europe, the OECD boosting its global growth forecasts for 2021 and 2022, OPEC+ commenting on strong oil demand, and reports highlighting solid activity in airports and movie theaters over the weekend.
The S&P 500 energy sector (+3.9%) stood atop the sector leaderboard with a 4% gain, further supported by higher oil prices ($67.79/bbl, +1.47, +2.2%) and a decision from OPEC+ to gradually ease current supply cuts.
The real estate (+1.7%), materials (+1.4%), financials (+0.7%), and industrials (+0.4%) sectors also closed higher. Boeing (BA 254.73, +7.71, +3.1%) underpinned the move in the industrials sector after the stock was upgraded to Outperform from Market Perform at Cowen.
Conversely, the health care sector (-1.6%) underperformed with a 1.6% decline, yet it was the information technology sector (-0.4%) that exerted the influential weakness. The health care sector was pressured by weakness in Abbott Labs (ABT 105.79, -10.86, -9.3%), which dropped 9% after lowering its FY21 guidance due to a rapid decline in COVID-19 testing demand.
Tech stocks, and growth stocks in general, struggled amid an uptick in long-term interest rates, which corroborated the reopening theme. The 10-yr yield increased three basis points to 1.62% while the 2-yr yield increased one basis point to 0.15%. The U.S. Dollar Index decreased 0.2% to 89.89.
In other corporate news, AMC Entertainment (AMC 32.04, +5.92, +22.7%) remained a heavily-traded stock and rose 23% after the company raised $230.5 million in cash by selling shares to Mudrick Capital Management. Cloudera (CLDR 15.93, +3.07, +23.7%) agreed to be acquired by Clayton, Dubilier & Rice and KKR for $16.00 per share, or $5.3 billion, in cash.
Reviewing Tuesday's economic data:
The ISM Manufacturing Index for May moved up to 61.2% (Briefing.com consensus 61.0%) from 60.7% in April. A number above 50.0% connotes an expansion in manufacturing activity. May marked the twelfth straight month of expansion.
The key takeaway from the report is the finding that companies and suppliers continue to struggle to meet increasing levels of demand. That's a good harbinger for manufacturers, yet it also suggests inflation pressure will persist.
Total construction spending increased 0.2% m/m in April (Briefing.com consensus 0.5%) following an upwardly revised 1.0% increase (from 0.2%) in March. Total private construction rose 0.4% m/m while total public construction spending decreased 0.6%.
The key takeaway from the report is the ongoing strength in private residential construction spending, which is a byproduct of strong demand driven by a scarce supply of existing homes for sale.
The final IHS Market Manufacturing PMI for April checked in at 62.1%, up from 61.5% in the preliminary reading.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index and the Fed's Beige Book for June on Wednesday.
Russell 2000 +16.2% YTD
Dow Jones Industrial Average +13.0% YTD
S&P 500 +11.9% YTD
Nasdaq Composite +6.6% YTD
Crude futures settle close to $68 per barrel
01-Jun-21 15:30 ET
Dow +54.15 at 34583.60, Nasdaq +8.16 at 13756.92, S&P +1.25 at 4205.36
[BRIEFING.COM] The S&P 500 is relatively unchanged and trading a few points above the 4200 level, which has been a level the S&P 500 has flirted with over the past week.
One last look at the S&P 500 sectors shows energy (+3.6%), real estate (+1.6%), materials (+1.5%), and financials (+0.7%) in the lead with decent gains, while the health care sector (-1.5%) remains firmly at the bottom of the pack with a 1.5% decline.
WTI crude futures settled higher by 2.2%, or $1.47, to $67.79/bbl. On a related note, OPEC+ agreed to gradually increase the output of oil in June and July.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34529.45 +64.81 (0.19%)
Nasdaq 13748.76 +12.46 (0.09%)
SP 500 4204.11 +3.23 (0.08%)
10-yr Note +2/32 1.582
NYSE Adv 1951 Dec 1309 Vol 1.0 bln
Nasdaq Adv 2234 Dec 1964 Vol 4.4 bln
Industry Watch
Strong: Information Technology, Health Care, Utilities, Real Estate
Weak: Communication Services, Industrials, Materials, Consumer Discretionary
Moving the Market
-- Stock market pares modest gains and closes little changed ahead of Memorial Day weekend
-- Treasury market was not bothered by inflation pressures
-- Speculative trading activity cooled off
Stock market closes flat ahead of Memorial Day weekend
28-May-21 16:20 ET
Dow +64.81 at 34529.45, Nasdaq +12.46 at 13748.76, S&P +3.23 at 4204.11
[BRIEFING.COM] The S&P 500 eked out a 0.1% gain on Friday, as equity investors were comforted by the Treasury market's calm demeanor to further evidence of inflationary pressures. The market, however, did close near session lows due to a flush of selling interest without a news catalyst into the close.
The Nasdaq Composite (+0.1%), Dow Jones Industrial Average (+0.2%), and Russell 2000 (-0.2%) gave up modest gains and closed little changed like the benchmark index.
On inflation, PCE Price Index -- the Fed's preferred inflation gauge -- rose 0.6% m/m in April and was up 3.6% yr/yr. The expected year-ahead inflation rate was a record 4.6% in the final May reading for the University of Michigan Index of Consumer Sentiment. Costco's (COST 378.27, -9.28, -2.4%) CFO said "inflationary factors abound" in the earnings conference call.
Granted, the news didn't come as much surprise since the market had already seen inflation pressures building in previous economic data, business commentary, and higher commodity prices. The takeaway from the 10-yr yield settling lower by three basis points to 1.58% was that the Treasury market still thinks inflation will be transitory.
In turn, the rate-sensitive growth stocks within the S&P 500 information technology sector (+0.3%) garnered some buying interest. Salesforce.com (CRM 238.10, +12.27, +5.4%) provided additional support for the tech sector following its earnings report, helping outweigh the decline in Apple (AAPL 124.61, -0.67, -0.5%), which was downgraded to Sell from Neutral at New Street.
The real estate sector (+0.7%) was the top-performing sector in the S&P 500, though, and the last-minute selling took the communication services (-0.3%), consumer discretionary (-0.2%), materials (-0.2%), and industrials (-0.1%) sectors into the red on a closing basis.
Speculative trading activity was highlighted by the media in the early part of the day, but interest waned as these stocks quickly turned around. The iShares Micro-Cap ETF (IWC 149.58, -0.91, -0.6%) declined 0.6% after starting with a 1.0% gain on top a 4.6% rally over the prior two sessions.
Separately, the White House confirmed details of a $6 trillion FY22 budget proposal, which includes aspects of an already passed COVID-19 relief bill and yet-to-be-passed American Jobs Plan and American Families Plan.
The 2-yr yield was flat at 0.14%. The U.S. Dollar Index increased 0.1% to 90.07. WTI crude futures decreased 0.8%, or $0.54, to $66.32/bbl.
Reviewing Friday's economic data:
Personal income declined 13.1% month-over-month (Briefing.com consensus -15.0%), as the total of stimulus payments made was greatly reduced from March. Personal spending (PCE) increased 0.5% month-over-month (Briefing.com consensus +0.4%), down from an upwardly revised 4.7% (from 4.2%) in March. That's not bad on the surface, but it was a price-driven increase. Real PCE decreased 0.1% in April. The PCE Price Index jumped 0.6% and the core PCE Price Index, which excludes food and energy, rose 0.7%. That left the year-over-year increases for the Fed's preferred inflation gauge at 3.6% (versus 2.4% in March) and 3.1% (versus 1.9% in March), respectively.
The key takeaway from the report should be the high inflation prints, yet the calm manner in which the Treasury market has reacted to the report is apt to make the stock market think the key takeaway is that there is an abiding belief that the high inflation prints will be transient, as the Fed has suggested.
The final May reading for the University of Michigan Index of Consumer Sentiment edged up to 82.9 (Briefing.com consensus 82.8) from the preliminary reading of 82.8. The final reading for April was 88.3. The expected year-ahead inflation rate of 4.6% is the highest on record.
The key takeaway from the report is the acknowledgment that "record proportions of consumers reported higher prices across a wide range of discretionary purchases."
The Chicago PMI increased to 75.2 in May (Briefing.com consensus 67.0) from 72.1 in April.
The Advance report for International Trade in Goods for April showed a deficit of $85.2 billion versus $90.6 billion in March. The Advance report for Retail Inventories for April decreased 1.6%, while the Advance report for Wholesale Inventories for April increased 0.8%.
As a reminder, the market will be closed on Monday for Memorial Day. When the market reopens on Tuesday, investors will receive the ISM Manufacturing Index for May, Construction Spending for April, and the final IHS Markit Manufacturing PMI for May.
Russell 2000 +14.9% YTD
Dow Jones Industrial Average +12.8% YTD
S&P 500 +11.9% YTD
Nasdaq Composite +6.7% YTD
WTI crude futures settle in negative territory
28-May-21 15:25 ET
Dow +110.47 at 34575.11, Nasdaq +43.73 at 13780.03, S&P +10.80 at 4211.68
[BRIEFING.COM] The S&P 500 continues to trade slightly higher by 0.3%. It's traded at these levels for most of the day.
One last look at the S&P 500 sectors shows information technology (+0.6%) and real estate (+0.8%) atop the sector standings with respectable gains, while the communication services (-0.1%), consumer discretionary (unch), and industrials (unch) sectors underperform near their flat lines.
WTI crude futures settled lower by 0.8%, or $0.54, to $66.32/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34464.64 +141.59 (0.41%)
Nasdaq 13736.30 -1.72 (-0.01%)
SP 500 4200.88 +4.89 (0.12%)
10-yr Note -2/32 1.599
NYSE Adv 2054 Dec 1195 Vol 1.9 bln
Nasdaq Adv 2762 Dec 1431 Vol 5.0 bln
Industry Watch
Strong: Financials, Industrials, Materials
Weak: Information Technology, Utilities, Consumer Staples, Health Care, Real Estate
Moving the Market
-- Republicans confirm $928 billion infrastructure counteroffer, President Biden will reportedly propose a $6 trillion budget for FY22
-- Encouraging weekly jobless claims data
-- 10-yr yield moved higher
-- Consolidation activity in large-caps and rebalancing activity into smaller stocks
Another good day for cyclical and smaller stocks
27-May-21 16:15 ET
Dow +141.59 at 34464.64, Nasdaq -1.72 at 13736.30, S&P +4.89 at 4200.88
[BRIEFING.COM] The large-cap indices closed mixed and little changed on Thursday, as investors digested the latest government-spending headlines and continued to focus their buying efforts on cyclical sectors and smaller stocks. The S&P 500 increased 0.1% and closed at the 4200 level.
The Dow Jones Industrial Average (+0.4%) slightly outperformed, while the Nasdaq Composite (-0.01%) closed fractionally lower. The Russell 2000 (+1.1%) and iShares Micro-Cap ETF (IWC 150.49, +2.63, +1.8%) rose more than 1.0% for the second straight day.
Briefly, Senate Republicans confirmed a $928 billion infrastructure counteroffer to the Biden administration's $1.7 trillion American Jobs Plan while reports indicated that President Biden will propose a $6 trillion budget for FY22, which would include both the American Jobs Plan and American Families Plan.
Both sides expressed concerns about each other's plans, but the headlines served as a reminder that additional stimulus is likely coming. This acknowledgement, coupled with an encouraging report on weekly initial jobless claims, boded well for economically-sensitive sectors and negatively for longer-dated Treasuries. The 10-yr yield rose four basis points to 1.61%.
The S&P 500 industrials (+1.4%), financials (+1.2%), and materials (+0.7%) sectors posted decent gains. On the downside, the defensive-oriented information technology (-0.5%), utilities (-0.7%), consumer staples (-0.6%), real estate (-0.2%), and health care (-0.2%) sectors closed lower.
The underperformance of the technology sector presumably had more to do with the uptick in long-term interest rates (i.e., valuation-oriented weakness), while the declines in the other sectors seemed to be a byproduct of investors preferring riskier stocks in the small-cap and micro-cap domains.
AMC Entertainment (AMC 26.52, +6.96, +35.6%) surged 36% on no news, bringing its market capitalization to about $12 billion after starting the year below $1 billion. In the mega-cap domain, NVIDIA (NVDA 619.52, -8.49, -1.4%) exceeded earnings expectations and provided upbeat guidance, but shares closed lower.
The 2-yr yield was unchanged at 0.14%. The U.S. Dollar Index declined 0.1% to 89.98. WTI crude futures increased 1.0%, or $0.65, to $66.86/bbl.
Reviewing Thursday's economic data:
Initial jobless claims for the week ending May 22 decreased by 38,000 to 406,000 (Briefing.com consensus 425,000), marking the lowest claims level since March 14, 2020. Continuing claims for the week ending May 15 decreased by 96,000 to 3.642 million.
The key takeaway from the report remains the same: initial jobless claims are still too high in absolute terms, but continue to trend in a direction that supports favorable reopening-minded views.
Durable Goods Orders for April decreased 1.3% month-over-month (Briefing.com consensus +0.8%) following an upwardly revised 1.3% increase (from +0.5%) in March. Excluding transportation, orders rose 1.0% (Briefing.com consensus +0.7%) following an upwardly revised 3.2% increase (from +1.6%) in March.
The key takeaway from the report is that it revealed solid levels of business spending despite a 6.2% decline in orders for motor vehicles and parts that was related to the semiconductor supply shortage. To wit, nondefense capital goods orders, excluding aircraft, jumped 2.3% month-over-month.
The second estimate for Q1 GDP was unchanged from the advance estimate of 6.4% (Briefing.com consensus 6.4%). The GDP Price Deflator was bumped up to 4.3% (Briefing.com consensus 4.1%) from the advance estimate of 4.1%.
The key takeaway from the report is that it is an affirmation of the strong growth that has been facilitated by massive stimulus spending and Covid vaccines that have led to increased reopening activity; however, the dated aspect of the report should curtail its influence as a market mover.
Just in, pending home sales decreased 4.4% m/m in April (Briefing.com consensus +1.5%) following a 1.9% increase in March.
Looking ahead to Friday, investors will receive Personal Income and Spending for April, the final University of Michigan Index of Consumer Sentiment for May, the Chicago PMI for May, and Advance International Trade in Goods, Retail Inventories, and Wholesale Inventories for April.
Russell 2000 +15.1% YTD
Dow Jones Industrial Average +12.6% YTD
S&P 500 +11.8% YTD
Nasdaq Composite +6.6% YTD
Risker stocks outperforming again
27-May-21 15:30 ET
Dow +113.49 at 34436.54, Nasdaq +0.49 at 13738.51, S&P +4.62 at 4200.61
[BRIEFING.COM] The S&P 500 is up 0.1% while the Russell 2000 is up 1.1% and the iShares Micro-Cap ETF (IWC 149.59, +1.73, +1.2%) is up 1.2%. This is the second straight day that "riskier" stocks are outperforming. AMC Entertainment (AMC 28.46, +8.89, +45.3%) is up 45% in a short-squeeze.
One last look at the S&P 500 sectors shows industrials (+1.4%), financials (+0.8%), and materials (+0.7%) still outperforming in negative territory, while the defensive-oriented information technology (-0.4%), consumer staples (-0.4%), utilities (-0.3%), and health care (-0.2%) sectors underperform in negative territory.
WTI crude futures settled higher by 1.0%, or $0.65, to $66.86/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34323.05 +10.59 (0.03%)
Nasdaq 13738.02 +80.82 (0.59%)
SP 500 4195.99 +7.86 (0.19%)
10-yr Note -2/32 1.577
NYSE Adv 2228 Dec 1058 Vol 934.7 mln
Nasdaq Adv 3140 Dec 1107 Vol 4.2 bln
Industry Watch
Strong: Consumer Discretionary, Energy, Communication Services
Weak: Health Care, Consumer Staples, Information Technology
Moving the Market
-- Riskier stocks leave the blue-chips in the dust
-- Relative strength in the consumer discretionary and energy sectors
-- Resistance at the 4200 level for the S&P 500
Riskier stocks leave the blue-chips in the dust
26-May-21 16:15 ET
Dow +10.59 at 34323.05, Nasdaq +80.82 at 13738.02, S&P +7.86 at 4195.99
[BRIEFING.COM] The S&P 500 increased 0.2% on Wednesday in a lackluster session for the benchmark index. The Nasdaq Composite (+0.6%) fared slightly better, but it noticeably trailed the S&P Mid Cap 400 (+1.0%), the small-cap Russell 2000 (+2.0%), and the iShares Micro-Cap ETF (IWC 147.86, +3.99, +2.8%).
The blue-chip Dow Jones Industrial Average (+0.03%) closed relatively unchanged.
The divergence between blue-chips and riskier stocks wasn't catalyzed by anything specific, suggesting that the market remained in consolidation mode in which interest shifts from one group to another on any given day. In recent weeks, rotational activity has centered around growth versus value, except today.
There were, however, some factors that might have contributed to the muted interest in the S&P 500: missing leadership from its top-weighted technology sector (unch), resistance at the 4200 level, and a slight turnaround in the 10-yr yield, which settled one basis point higher at 1.57% after trading at 1.55% intraday.
The energy (+0.9%) and consumer discretionary (+0.9%) sectors were pockets of relative strength within the S&P 500. The health care (-0.6%) and consumer staples (-0.2%) sectors underperformed in negative territory.
Within the consumer discretionary sector, Amazon.com (AMZN 3265.16, +6.11, +0.2%) confirmed it will purchase Metro Goldwyn Mayer for $8.45 billion and that Andy Jassy will become CEO on July 5. There was also a report from Business Insider that suggested Amazon is discussing opening pharmacy retail locations using Whole Foods stores.
Retailers keyed off the positive earnings results and/or upbeat guidance from Dick's Sporting Goods (DKS 98.40, +14.23, +16.9%), Urban Outfitters (URBN 38.47, +3.51, +10.0%), and Abercrombie & Fitch (ANF 41.02, +2.97, +7.8%). The SPDR S&P Retail ETF (XRT 93.66, +2.63, +2.9%) rose 3%, further supported by a nice move in GameStop (GME 242.56, +33.13, +15.8%).
In other developments, Fed Vice Chair for Supervision Quarles (FOMC voter) said an uneven global recovery and the emergence of bottlenecks in some supply chains are two potential headwinds for the economy. Separately, CEOs from the leading financial institutions testified before the Senate Banking Committee regarding their pandemic-era policies.
The 2-yr yield was unchanged at 0.14%. The U.S. Dollar Index increased 0.5% to 90.04. WTI crude futures increased 0.2%, or $0.14, to $66.21/bbl.
Wednesday's economic data was limited to the weekly MBA Mortgage Applications Index, which decreased 4.2% following a 1.2% increase in the prior week. On Thursday, investors will receive Durable Goods Orders for April, the weekly Initial and Continuing Claims report, the second estimate for Q1 GDP, and Pending Home Sales for April.
Russell 2000 +13.9% YTD
Dow Jones Industrial Average +12.1% YTD
S&P 500 +11.7% YTD
Nasdaq Composite +6.6% YTD
Exxon confirms at least two new board members from proxy solicitor
26-May-21 15:30 ET
Dow +0.74 at 34313.20, Nasdaq +83.70 at 13740.90, S&P +6.74 at 4194.87
[BRIEFING.COM] The S&P 500 is up 0.2%, supported by relative strength in the consumer discretionary (+1.0%) and energy (+0.9%) sectors.
Within the energy sector, Exxon Mobil (XOM 58.89, +0.63, +1.1%) recently confirmed preliminary results from an election of Directors that the board will include two of Engine No. 1's nominees. Vote results for five nominees were too close to call and are still being counted.
WTI crude futures settled higher by 0.2%, or $0.14, to $66.21/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34393.98 +186.14 (0.54%)
Nasdaq 13661.20 +190.18 (1.41%)
SP 500 4197.05 +41.19 (0.99%)
10-yr Note +1/32 1.605
NYSE Adv 2125 Dec 1135 Vol 789.2 mln
Nasdaq Adv 2066 Dec 2038 Vol 3.5 bln
Industry Watch
Strong: Information Technology, Communication Services, Consumer Discretionary
Weak: Utilities
Moving the Market
-- Broad-based advance led by the technology/growth stocks
-- Buy-the-dip mindset in growth stocks
-- Longer-dated Treasury yields dip
Growth stocks lead market higher
24-May-21 16:20 ET
Dow +186.14 at 34393.98, Nasdaq +190.18 at 13661.20, S&P +41.19 at 4197.05
[BRIEFING.COM] The S&P 500 advanced 1.0% on Monday, thanks in large part to the heavily-weighted growth stocks. The Nasdaq Composite (+1.4%) outperformed with a 1.4% gain while the Dow Jones Industrial Average (+0.5%) and Russell 2000 (+0.6%) underperformed with modest gains.
Ten of the 11 S&P 500 sectors finished in positive territory, and none were more influential to today's performance than the information technology (+1.8%), communication services (+1.8%), and consumer discretionary (+1.0%) sectors due to their mega-cap components. The Vanguard Mega Cap Growth ETF (MGK 217.71, +3.41) gained 1.6%.
Other high-growth areas like the Philadelphia Semiconductor Index (+2.3%) and the ARK Innovation ETF (ARKK 108.73, +2.89, +2.7%) also outperformed.
Given the lack of market-moving macro news, the positive price action from the start presumably fueled a fear of missing out on further rebound gains, particularly in the growth stocks. To be fair, the 10-yr yield decreased two basis points to 1.61%, which was viewed as a supportive factor.
Value stocks also had a decent day, but not as great as the growth stocks. For example, the iShares S&P 500 Value ETF (IVE 149.56, +0.76, +0.5%) increased just 0.5%, versus the 1.5% gain in the iShares S&P 500 Growth ETF (IVW 68.77, +0.99, +1.5%).
The utilities sector (-0.2%) -- this year's worst-performing sector in the S&P 500 -- was the only sector that closed lower today. The negative performance coincided with a broader hiccup in the market, which saw the S&P 500 dip below the 4200 level on a closing basis.
In M&A news, Amazon (AMZN 3244.99, +41.91, +1.3%) is nearing a deal to purchase Hollywood studio MGM for $9 billion, according to The Wall Street Journal. Cabot Oil & Gas (COG 16.60, -1.21, -6.8%) and Cimarex Energy (XEC 66.14, -5.05, -7.1%) agreed to an all-stock merger of equals that left shareholders underwhelmed.
The 2-yr yield was flat at 0.15%. The U.S. Dollar Index decreased 0.2% to 89.83. WTI crude futures rose 3.7%, or $2.38, to $66.02/bbl. The CBOE Volatility Index (19.01, -1.14, -4.7%) slipped below the 20.00 level, indicating reduced hedging interest.
Investors did not receive any economic data on Monday. Looking ahead, New Home Sales for April, the Conference Board's Consumer Confidence Index for May, the FHFA Housing Price Index for March, and the S&P Case-Shiller Home Price Index for March will be released on Tuesday.
Russell 2000 +12.8% YTD
Dow Jones Industrial Average +12.4% YTD
S&P 500 +11.7% YTD
Nasdaq Composite +6.0% YTD
WTI crude futures settle above $66 per barrel
24-May-21 15:30 ET
Dow +241.82 at 34449.66, Nasdaq +222.96 at 13693.98, S&P +49.86 at 4205.72
[BRIEFING.COM] The S&P 500 is up 1.2% to trade near session highs. The Russell 2000 has picked up the slack and is now up 1.0%.
One last look at the S&P 500 sectors shows information technology (+2.0%), communication services (+1.9%), and consumer discretionary (+1.4%) still leading the advance with solid gains. The utilities sector (+0.1%) underperforms with a 0.1% gain.
WTI crude futures settled higher by 3.7%, or $2.38, to $66.02/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34207.84 +123.69 (0.36%)
Nasdaq 13471.02 -64.75 (-0.48%)
SP 500 4155.86 -3.26 (-0.08%)
10-yr Note +1/32 1.618
NYSE Adv 1920 Dec 1328 Vol 965.5 mln
Nasdaq Adv 2355 Dec 1700 Vol 3.7 bln
Industry Watch
Strong: Financials, Industrials, Materials, Energy, Utilities
Weak: Information Technology, Consumer Discretionary, Communication Services
Moving the Market
-- Growth stocks faded early gains amid another wave of selling in cryptocurrencies
-- Value/cyclical stocks outperformed in positive territory
-- Consolidation activity persisted
Value outpaces growth in mixed session
21-May-21 16:15 ET
Dow +123.69 at 34207.84, Nasdaq -64.75 at 13471.02, S&P -3.26 at 4155.86
[BRIEFING.COM] The S&P 500 (-0.1%) and Nasdaq Composite (-0.5%) closed slightly lower on Friday, fading a positive start as growth stocks succumbed to renewed selling interest. The Dow Jones Industrial Average (+0.4%) and Russell 2000 (+0.3%), however, closed in positive territory.
The session started in a broad-based advance led by the value/cyclical stocks, which were supported by preliminary data from the IHS that showed manufacturing and service-sector activity accelerate in May. The cyclical stocks entered the session as weekly laggards.
The growth stocks were up slightly, but they moved steadily lower in a trade that coincided with another wave of selling in cryptocurrencies, which appeared to undercut risk sentiment. Cryptocurrencies were hit by reports that China intends to crack down on bitcoin mining and trading.
From a sector perspective, the financials (+0.9%), industrials (+0.4%), materials (+0.3%), and energy (+0.2%) sectors were among the top performers, although they closed off session highs. The information technology (-0.5%), consumer discretionary (-0.6%), and communication services (-0.3%) sectors -- where the mega-cap growth stocks reside -- underperformed.
Deere (DE 359.75, +4.53, +1.3%) was further aided by a better-than-expected earnings report and upbeat guidance. Applied Materials (AMAT 128.66, -1.65, -1.3%) also exceeded quarterly expectations and issued upside guidance, but AMAT shares closed lower alongside other growth stocks. NVIDIA (NVDA 599.67, +15.07) rose 2.6% after announcing a 4:1 stock split.
Separately, the White House lowered the price tag of its infrastructure bill to $1.7 trillion from $2.2 trillion, but Senate Republicans reportedly did not see the revised bill as a major improvement. The Biden administration was able to lower the price tag by moving some spending to other bills and by reducing spending on broadband.
U.S. Treasuries finished little changed in a quiet trading session. The 2-yr yield was flat at 0.15%, and the 10-yr yield was flat at 1.63%. The U.S. Dollar Index increased 0.2% to 89.99. WTI crude futures rose 2.7%, or $1.69, to $63.64/bbl.
Total trading volume at the Nasdaq was lighter than usual at approximately 3.7 billion shares exchanged.
Reviewing Friday's economic data:
Existing home sales decreased 2.7% m/m in April to a seasonally adjusted annual rate of 5.85 million (Briefing.com consensus 6.09 million) from an unrevised 6.01 million in March. Total sales in April were up 33.9% from a year ago when they were severely depressed in the early stages of the pandemic. In the January-April period, they were up 20.0% year-over-year.
The key takeaway from the report is that the supply of existing homes for sale remains near all-time low levels. That is driving up the pace of price increases well beyond the pace of income gains, which is going to create affordability pressures for prospective buyers, particularly first-time buyers.
The preliminary IHS Markit Manufacturing for May increased to 61.5 from 60.5 in April. The preliminary IHS Markit Services PMI for May increased to 70.1 from 64.7 in April.
Looking ahead, investors will not receive any notable economic data on Monday.
Russell 2000 +12.2% YTD
Dow Jones Industrial Average +11.8% YTD
S&P 500 +10.6% YTD
Nasdaq Composite +4.5% YTD
Crude futures settle higher, supporting energy stocks
21-May-21 15:30 ET
Dow +206.55 at 34290.70, Nasdaq -21.62 at 13514.15, S&P +8.26 at 4167.38
[BRIEFING.COM] The S&P 500 is up 0.2% and is on pace to end the week with a fractional decline.
One last update on the sectors shows energy (+1.0%), and financials (+1.1%) leading the advance with a 1% gain. while the information technology (-0.2%), consumer discretionary (-0.3%), and communication services (-0.1%) sectors are the only sectors trading lower right now.
WTI crude futures settled higher by 2.7%, or $1.69, to $63.64/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 33896.04 -164.62 (-0.48%)
Nasdaq 13299.77 -3.90 (-0.03%)
SP 500 4115.68 -12.15 (-0.29%)
10-yr Note 0/32 1.652
NYSE Adv 1125 Dec 2108 Vol 987.6 mln
Nasdaq Adv 1565 Dec 2464 Vol 4.3 bln
Industry Watch
Strong: Information Technology, Communication Services
Weak: Energy, Financials, Materials, Industrials, Consumer Discretionary
Moving the Market
-- Stocks close mostly lower but the market spent a majority of the session on the comeback trail
-- Risk sentiment was improved by a turnaround in the information technology sector and S&P 500 finding technical support at its 50-day moving average (4081)
-- FOMC Minutes showed some participants thought it could be appropriate to discuss tapering if economy continues to make rapid progress towards its goals
Stocks recouped a lot of their early losses
19-May-21 16:20 ET
Dow -164.62 at 33896.04, Nasdaq -3.90 at 13299.77, S&P -12.15 at 4115.68
[BRIEFING.COM] The S&P 500 declined 0.3% on Wednesday, although it was down as much as 1.6% in early action and spent most of the session on the comeback trail. The Nasdaq Composite (-0.03%) closed relatively unchanged after being down 1.7% intraday. The Dow Jones Industrial Average (-0.5%) and Russell 2000 (-0.8%) underperformed but also closed off intraday lows.
The weak start wasn't catalyzed by any specific news, although some pointed to the huge sell-off in the cryptocurrency market as a reminder that it might be a good idea to take some profits for stocks that are still up big this year. Familiar concerns surrounding inflation, valuations, and peak growth were recounted in the early part of the session as investors de-risked.
Profit-taking efforts were mainly concentrated in the S&P 500 energy (-2.5%), materials (-1.5%), financials (-0.6%), and industrials (-0.6%) sectors. The information technology (+0.3%) and communication services (+0.1%) sectors, however, sneaked their way into positive territory on a closing basis. The Philadelphia Semiconductor Index rose 2.0%.
The turnaround in the information technology sector, which was down 1.7% intraday, helped improve risk sentiment, which was further aided by an appreciation that the S&P 500 reclaimed its 50-day moving average (4081) after slipping below it in the morning.
Later in the day, the FOMC Minutes from the April meeting revealed that some participants thought it might be appropriate to start talking about tapering asset purchases in future meetings if the economy continues to make rapid progress towards the Fed's goals on employment and inflation.
The stock market's reaction to this FOMC passage was rather calm, arguably due to a view that it might have been more surprising to see no mention of the need to start talking about tapering asset purchases. Longer-dated Treasury yields moved higher following the Minutes.
The 10-yr yield settled higher by four basis points to 1.68% while the 2-yr yield was unchanged at 0.15%. The U.S. Dollar Index rose 0.5% to 90.16. WTI crude futures fell 3.4%, or $2.20, to $63.31/bbl. The CBOE Volatility Index increased just 3.9% to 22.18 after touching 25.96 at its high.
Separately, Target (TGT 219.01, +12.58, +6.1%) rose 6% to all-time highs following its better-than-expected earnings report. Lowe's (LOW 190.72, -2.03, -1.1%) also exceeded expectations, but shares went the other way.
Wednesday's economic data was limited to the weekly MBA Mortgage Applications Index, which increased 1.2% following a 2.1% increase in the prior week. On Thursday, investors will receive the weekly Initial and Continuing Claims report, the Conference Board's Leading Economic Index for April, and the Philadelphia Fed Index for May.
Russell 2000 +11.1% YTD
Dow Jones Industrial Average +10.8% YTD
S&P 500 +9.6% YTD
Nasdaq Composite +3.2% YTD
Crude futures settle sharply lower
19-May-21 15:25 ET
Dow -259.68 at 33800.98, Nasdaq -25.28 at 13278.39, S&P -24.51 at 4103.32
[BRIEFING.COM] The S&P 500 is trading near its better levels of the day with a 0.6% decline. The Russell 2000 underperforms with a 1.1% decline.
One last look at the S&P 500 sectors shows information technology (+0.1%) sneaking into the green after starting with a 1.7% decline. The energy (-2.8%), materials (-1.9%), and consumer discretionary (-1.2%) sectors lag in negative territory.
WTI crude futures settled sharply lower by 3.4%, or $2.20, to $63.31/bbl.