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Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34060.66 -267.13 (-0.78%)
Nasdaq 13303.67 -75.41 (-0.56%)
SP 500 4127.83 -35.46 (-0.85%)
10-yr Note 0/32 1.652
NYSE Adv 1509 Dec 1744 Vol 927.9 mln
Nasdaq Adv 2062 Dec 1961 Vol 4.2 bln
Industry Watch
Strong: Health Care, Real Estate
Weak: Energy, Industrials, Materials, Financials, Communication Services, Information Technology
Moving the Market
-- Value/cyclical stocks led the decline, and technology/growth stocks turned negative late in the day
-- Housing Starts and Building Permits report for April was relatively disappointing, feeding into the peak growth narrative
-- Consolidation activity persisted
Tech stocks juke the market lower
18-May-21 16:20 ET
Dow -267.13 at 34060.66, Nasdaq -75.41 at 13303.67, S&P -35.46 at 4127.83
[BRIEFING.COM] The S&P 500 fell 0.9% on Tuesday, as sellers first reined in the value/cyclical stocks then targeted the technology stocks late in the day. The Nasdaq Composite declined 0.6%, the Dow Jones Industrial Average declined 0.8% and the Russell 2000 declined 0.7%. Both the Nasdaq and Russell 2000 coughed up 0.8% intraday gains.
The "peak growth" narrative was a main talking point in the morning after April housing starts fell 9.5% m/m to a seasonally adjusted annual rate of 1.569 million units (Briefing.com consensus 1.715 million). In addition, Home Depot (HD 316.75, -3.26, -1.0%) and Macy's (M 19.09, -0.07, -0.4%) were unable to key off their earnings reports, which featured impressive yr/yr revenue growth.
Accordingly, the cyclical energy (-2.6%), industrials (-1.5%), financials (-1.4%), and materials (-1.1%) sectors were among the biggest laggards today. Investors leaned defensively toward the health care (+0.1%) and real estate (+0.2%) sectors, which were the only sectors that closed higher.
The cyclical stocks were arguably vulnerable to profit-taking interest, so that wasn't the most disappointing aspect of the session. Instead, the real disappointment was the information technology sector (-0.8%), which gave up an early leadership position and turned negative late in the day.
Many have been keeping an eye on this recently forlorn technology sector, and other growth stocks, to pick up the slack. Unfortunately, dip-buyers were flaky today, thereby keeping a lid on risk sentiment and keeping the S&P 500 within a consolidation trend. Note, the tech sector is the market's most heavily-weighted sector.
Separately, Walmart (WMT 141.91, +3.02, +2.2%) was an individual standout following its better-than-expected earnings report and upbeat guidance.
U.S. Treasuries settled little changed in a relatively tight-ranged session. The 2-yr yield was flat 0.15%, and the 10-yr yield was flat at 1.64%. The U.S. Dollar Index decreased 0.4% to 89.78. WTI crude futures decreased 1.1%, or $0.72, to $65.51/bbl.
Reviewing Tuesday's economic data:
Total housing starts declined 9.5% month-over-month to a seasonally adjusted annual rate of 1.569 million units (Briefing.com consensus 1.715 million). Total permits rose just 0.3% month-over-month to 1.760 million, as expected.
The key takeaway from the report is in the breakdown, which showed zero growth in starts and permits for single-family homes across all regions, presumably as expansion plans were undercut by rising costs for land, labor, and materials.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index on Wednesday.
Russell 2000 +12.0% YTD
Dow Jones Industrial Average +11.3% YTD
S&P 500 +9.9% YTD
Nasdaq Composite +3.2% YTD
Energy stocks leading the decline amid lower oil prices
18-May-21 15:30 ET
Dow -90.41 at 34237.38, Nasdaq +11.14 at 13390.22, S&P -12.12 at 4151.17
[BRIEFING.COM] The S&P 500 is off session lows with a current 0.3% decline. The Russell 2000 is up 0.1%.
One last look at the sector performances shows energy (-1.9%), industrials (-1.0%), financials (-0.7%), and materials (-0.6%) still underperforming, while the defensive-oriented health care (+0.5%), real estate (+0.6%), and utilities (+0.1%) sectors outperform.
WTI crude futures settled lower by 1.1%, or $0.72, to $65.51/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34382.13 +360.68 (1.06%)
Nasdaq 13430.01 +304.99 (2.32%)
SP 500 4173.85 +61.35 (1.49%)
10-yr Note -2/32 1.661
NYSE Adv 2666 Dec 632 Vol 851.7 mln
Nasdaq Adv 3206 Dec 768 Vol 4.0 bln
Industry Watch
Strong: Energy, Information Technology, Consumer Discretionary
Weak: Health Care, Utilities, Consumer Staples
Moving the Market
-- Stocks end week on high note as investors followed through on dip-buying mentality
-- Market overlooked soft retail sales data for April, drop in consumer sentiment for May, and higher import/export prices for April
-- Treasury market appeared unconcerned by inflation expectations
Stocks end week on a high note
14-May-21 16:15 ET
Dow +360.68 at 34382.13, Nasdaq +304.99 at 13430.01, S&P +61.35 at 4173.85
[BRIEFING.COM] The S&P 500 rose 1.5% on Friday in a steady and broad-based advance, as investors followed through on yesterday's dip-buying efforts. The Nasdaq Composite (+2.3%) and Russell 2000 (+2.5%) rose more than 2.0% while the Dow Jones Industrial Average increased 1.1%.
The stock market appeared to take its cue from the Treasury market's apparent lack of concern for inflation expectations, with buying interest fueled by a fear of missing out on further gains as the S&P 500 further distanced itself from its 50-day moving average (4064). The latter has been a level that's rewarded buyers over the past 13 months.
Every sector in the S&P 500 closed higher, advancing issues outpaced declining issues by noticeable margins at the NYSE and Nasdaq, and the speculative growth stocks joined in on the action after sitting out of yesterday's advance. The energy sector (+3.2%) was the top-performing sector in the S&P 500 while the information technology sector (+2.1%) was the most influential.
Rising inflation expectations adversely impacted consumer sentiment in May, according to the University of Michigan's Index of Consumer Sentiment, which dropped to 82.8 (Briefing.com consensus 90.2) in the preliminary reading from the final reading of 88.3 for April. On a related note, import and export prices continued to increase in April.
Typically, longer-dated Treasury yields go up, and prices go down, when economic data supports inflation expectations. Instead, the 10-yr yield decreased three basis points to 1.64% in a similar trading reaction to yesterday's hot PPI data. Conveniently, the lower rates worked in favor of the growth stocks.
The 2-yr yield decreased one basis point to 0.14%. The U.S. Dollar Index decreased 0.5% to 90.32. WTI crude futures increased 2.4%, or $1.51, to $65.33/bbl. The CBOE Volatility Index (18.81, -4.32, -18.7%) fell below 20.00.
Separately, total retail sales were flat m/m in April (Briefing.com consensus +1.8%) following an upwardly revised 10.7% increase (from 9.8%) in March. The stock marked overlooked the relatively disappointing miss due to the tough sequential comparison and expectations that consumer spending should pick up with continued reopening activity.
In earnings-based reactions, shares of Walt Disney (DIS 173.73, -4.61, -2.6%) and Coinbase (COIN 258.37, -6.73, -2.5%) closed lower following their earnings reports, while Airbnb (ABNB 141.20, +5.45, +4.0%) and DoorDash (DASH 141.07, +25.58, +22.2%) closed higher in response. DASH stood out with a 22% gain.
Reviewing Friday's economic data:
Total retail sales were flat month-over-month in April (Briefing.com consensus +1.8%) following an upwardly revised 10.7% increase (from 9.8%) in March. Excluding autos, retail sales declined 0.8% (Briefing.com consensus +1.2%) following an upwardly revised 9.0% increase (from 8.4%) in March.
The key takeaway from the report is that the "weakness" was really driven by a tough sequential comparison; moreover, the market won't be too concerned by the "miss," knowing that hiring activity is going to increase, that wages will likely increase, and that there is a huge amount of personal savings at the ready to spend in coming months.
The preliminary May reading for the University of Michigan Index of Consumer Sentiment dropped to 82.8 (Briefing.com consensus 90.2) from the final reading of 88.3 for April.
The key takeaway from the report is that consumer attitudes were adversely impacted by inflation expectations, which were captured in the highest expected year-ahead inflation rate (4.6%) and the highest expected long-term inflation rate (3.1%) in the last ten years.
Total industrial production increased 0.7% m/m in April (Briefing.com consensus 0.7%) following an upwardly revised 2.4% increase (from 1.4%) in March. The capacity utilization rate increased to 74.9% (Briefing.com consensus 75.1%) from an unchanged 74.4% in March.
The key takeaway from the report is that it suggests industrial production is running at a solid clip, although it would be stronger if not for the semiconductor supply shortage that is holding back motor vehicle production.
Import prices were up 0.7% month-over-month in April and up 0.7% as well, excluding fuel. Export prices increased 0.8% month-over-month in April and were up 0.9%, excluding agricultural exports
Business inventories increased 0.3% m/m in March (Briefing.com consensus 0.3%) following an upwardly revised 0.6% increase (from +0.5%) in February.
Looking ahead, investors will receive the Empire State Manufacturing Survey for May, the NAHB Housing Market Index for May, and Net Long-Term TIC Flows for March on Monday.
Russell 2000 +12.7% YTD
Dow Jones Industrial Average +12.3% YTD
S&P 500 +11.1% YTD
Nasdaq Composite +4.2% YTD
WTI crude futures rise and boost energy stocks
14-May-21 15:25 ET
Dow +402.36 at 34423.81, Nasdaq +315.35 at 13440.37, S&P +66.41 at 4178.91
[BRIEFING.COM] The S&P 500 is still up 1.6% on the back of gains across all of its 11 sectors. The Russell 2000 is up 2.4%.
One last look at the S&P 500 sectors shows energy (+3.1%) up 3%, followed by 2% gains in the information technology (+2.3%) and consumer discretionary (+1.9%) sectors. The health care sector (+0.5%) is lagging with a 0.5% gain.
WTI crude futures settled higher by 2.4%, or $1.51, to $65.33/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34021.45 +433.79 (1.29%)
Nasdaq 13125.02 +93.31 (0.72%)
SP 500 4112.50 +49.46 (1.22%)
10-yr Note -2/32 1.661
NYSE Adv 2172 Dec 1069 Vol 1.0 bln
Nasdaq Adv 2043 Dec 2003 Vol 4.6 bln
Industry Watch
Strong: Financials, Industrials, Utilities
Weak: Energy
Moving the Market
-- CDC says fully vaccinated people can partake in most activities without masks
-- Treasury yields edge lower despite hotter-than-expected Producer Price Index report for April and weekly initial claims declining to new post-pandemic low
-- Buy-the-dip efforts
-- Apple (AAPL) reclaimed 200-day moving average
Investors cautiously buy the dip
13-May-21 16:20 ET
Dow +433.79 at 34021.45, Nasdaq +93.31 at 13125.02, S&P +49.46 at 4112.50
[BRIEFING.COM] The S&P 500 gained 1.2% on Thursday, as investors bought the dip in most areas of the market following a rough three-day stretch. The Dow Jones Industrial Average (+1.3%) and Russell 2000 (+1.7%) outperformed the benchmark index, while the Nasdaq Composite trailed with a 0.7% gain.
Buying efforts were attributed to several factors: 1) a view that conditions were ripe for a bounce after the S&P 500 fell 4.0% over the past three sessions, 2) a retracement in long-term interest rates despite hot inflation data and encouraging weekly claims data, 3) Apple (AAPL 124.97, +2.20, +1.8%) reclaiming its 200-day moving average (123.12), and 4) the CDC saying fully vaccinated people can partake in most activities without masks.
The CDC recommendation provided renewed steam for a rebound rally that was losing its luster. The Nasdaq, for instance, had squandered an early 1.7% gain and dipped into negative territory prior to the news. It never got back to those levels, but the Dow and S&P 500 set session highs later in the day.
Within the S&P 500, the gains were spread to ten of its 11 sectors. The industrials (+1.9%), financials (+1.9%), and utilities (+1.8%) sectors rounded out the top spots. The information technology sector rose 1.4%.
Buying interest, however, evaded the S&P 500 energy sector (-1.4%) and the more speculative growth stocks, particularly those within the ARK Innovation ETF (ARKK 99.48, -2.68, -2.6%). Energy stocks were clipped by weaker oil prices ($63.82/bbl, -2.13, -3.2%) and weaker RBOB gasoline prices ($2.09/gal, -0.07, -3.3%).
The disappointing performance of the ARK Innovation ETF, which was up as much as 2.5% in early action, highlighted the preference toward the higher quality growth stocks like Apple in this uncertain trading environment.
Separately, the demand for longer-dated Treasuries was somewhat peculiar since the Producer Price Index (PPI) rose 0.6% m/m (Briefing.com consensus +0.3%) and weekly initial claims declined to a new post-pandemic low at 473,000 (Briefing.com consensus 510,000). Core PPI, which excludes food and energy, rose 0.7% m/m (Briefing.com consensus +0.4%).
Yesterday's hot CPI report presumably had the market expecting headline surprises, and Fed Governor Waller (FOMC voter) reiterated the Fed's view that inflation pressures should be transitory. The 10-yr yield decreased three basis points to 1.67% while the 2-yr yield was unchanged at 0.16%. The U.S. Dollar Index was little changed at 90.70.
Reviewing Thursday's economic data:
The PPI for final demand increased 0.6% month-over-month (Briefing.com consensus +0.3%) while the index for final demand, less foods and energy ("core PPI"), increased 0.7% month-over-month (Briefing.com consensus +0.4%). That left the year-over-year increases at 6.2% and 4.1%, respectively, with base effects very much in the picture there. Still, the month-over-month increases are not a function of low base effects.
The key takeaway from the report is that there is evident, and more current, price pressures for producers that threaten profit margin expansion if they are not passed along to customers. Over the last six months, when low base effects were not the same convenient excuse, the PPI for final demand has increased at an annualized rate of 7.4%.
For the week ending May 8, initial jobless claims decreased by 34,000 to 473,000 (Briefing.com consensus 510,000), marking their lowest level since March 14, 2020. Continuing claims for the week ending May 1 decreased by 45,000 to 3.655 million.
The key takeaway from the report is that jobless claims remain high in absolute terms, yet continue to trend in the right direction that is consistent with recovery-minded views.
Looking ahead, key reports will include Retail Sales for April, Industrial Production and Capacity Utilization for April, and the preliminary University of Michigan Index of Consumer Sentiment for May on Friday.
Dow Jones Industrial Average +11.2% YTD
Russell 2000 +9.9% YTD
S&P 500 +9.5% YTD
Nasdaq Composite +1.8% YTD
Energy prices settle sharply lower
13-May-21 15:30 ET
Dow +548.37 at 34136.03, Nasdaq +120.16 at 13151.87, S&P +62.18 at 4125.22
[BRIEFING.COM] The S&P 500 continues to trade higher by 1.4%, running slightly behind the Dow (+1.6%) and Russell 2000 (+1.6%).
One last look at the S&P 500 sectors shows financials (+2.1%), industrials (+2.1%), and utilities (+2.2%) setting the leadership pace with gains over 2.0%. The energy sector (-1.3%) remains the lone holdout with a 1.3% decline.
WTI crude futures settled lower by 3.2%, or $2.13, to $63.82/bbl. RBOB Gasoline futures settled lower by 3.3%, or $0.07, to $2.09/gallon.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 33587.66 -681.50 (-1.99%)
Nasdaq 13031.71 -357.75 (-2.67%)
SP 500 4063.04 -89.06 (-2.14%)
10-yr Note -4/32 1.670
NYSE Adv 450 Dec 2814 Vol 1.1 bln
Nasdaq Adv 914 Dec 2832 Vol 4.7 bln
Industry Watch
Strong: Energy
Weak: Information Technology, Consumer Discretionary, Materials, Industrials
Moving the Market
-- The Consumer Price Index report for April was much hotter than expected
-- The 10-yr yield rose eight basis points to 1.70%
-- Apple (AAPL) fell below its 200-day moving average (122.96)
-- De-risking efforts
Hot CPI report fuels market sell-off
12-May-21 16:15 ET
Dow -681.50 at 33587.66, Nasdaq -357.75 at 13031.71, S&P -89.06 at 4063.04
[BRIEFING.COM] The S&P 500 fell 2.1% on Wednesday in an orderly retreat, as inflation concerns were fueled by the noticeably hot Consumer Price Index (CPI) report for April. The Nasdaq Composite (-2.7%) and Russell 2000 (-3.3%) underperformed with steeper losses, while the Dow Jones Industrial Average declined 2.0%.
Specifically, total CPI rose 0.8% m/m in April (Briefing.com consensus +0.2%) while core CPI, which excludes food and energy, rose 0.9% m/m in April (Briefing.com consensus +0.3%). On a year-over-year basis, total CPI was up 4.2%, and when looking at the last six months to exclude base effect comparisons for April, it's running at an annualized pace of 5.0%.
The inflation-sensitive 10-yr yield settled higher by eight basis points to 1.70% after trading flat prior to the report. Accordingly, this spike in rates functioned as an additional headwind for the growth stocks, which have struggled mightily this month under negative momentum and rotational factors.
Apple (AAPL 122.77, -3.14, -2.5%) fell below its 200-day moving average (122.96) for the first time since April 2020, further curbing risk sentiment in technology stocks and the broader market. Ten of the 11 S&P 500 sectors closed lower, led by the consumer discretionary (-3.3%) and information technology (-2.9%) sectors. The Philadelphia Semiconductor Index dropped 4.2%.
The energy sector (+0.1%) was up as much as 3.0% today, largely due to the continued rise in oil futures ($65.95/bbl, +0.70, +1.1%) and RBOB futures ($2.16/gal, +0.02, +0.9%), but barely closed higher. Gasoline futures were driven by reports highlighting the long lines at gas stations in some Southeastern states due to the Colonial Pipeline shutdown.
While Fed officials, including Fed Vice Chair Clarida today, have consistently maintained the view that inflation pressures should be transitory, the thought that the central bank might have to act sooner than it would like possibly contributed to the buyers' strike.
Investors sought safety in cash, as equities and longer-dated Treasuries declined together. The U.S. Dollar Index rose 0.7% to 90.74. The CBOE Volatility Index (27.59, +5.75, +26.3%) spiked 26%, representing a rush for downside protection. The 2-yr yield was unchanged at 0.15%.
As an aside, the S&P 500 extended its three-day decline to 4.0% and closed 13 points above its 50-day moving average (4050).
Reviewing Wednesday's economic data, which featured the Consumer Price Index for April:
Total CPI increased 0.8% month-over-month in April (Briefing.com consensus +0.2%) while core CPI, which excludes food and energy, surged 0.9% month-over-month (Briefing.com consensus +0.3%), driven by a 10.0% increase in used car prices. That was the largest monthly increase in core CPI since April 1982. On a year-over-year basis, total CPI was up 4.2% -- the largest 12-month increase since September 2008 -- and core CPI was up 3.0% versus 1.6% for the 12 months ending in March.
The key takeaway from the report isn't so much the year-over-year numbers, which were fueled by base effects, as it is the monthly numbers. They are running hot indeed. Looking at the last six months only, which neutralizes some of the easy base effect comparisons, total CPI is running at an annualized pace of 5.0% while core CPI is running at 3.0%.
The Treasury Budget for April showed a $225.6 bln deficit, versus a $738.0 bln deficit in the same period a year ago.
The budget data is not seasonally adjusted, so the April deficit can't be compared to the March deficit of $659.6 bln.
The weekly MBA Mortgage Applications increased 2.1% following a 0.9% decline in the prior week.
Looking ahead, investors will receive the Producer Price Index for April and the weekly Initial and Continuing Claims report on Thursday.
Dow Jones Industrial Average +9.7% YTD
S&P 500 +8.2% YTD
Russell 2000 +8.1% YTD
Nasdaq Composite +1.1% YTD
Energy sector turns negative as losses accelerate in broad market
12-May-21 15:30 ET
Dow -653.26 at 33615.90, Nasdaq -248.63 at 13140.83, S&P -87.02 at 4065.08
[BRIEFING.COM] The S&P 500 is trading at session lows with a 2.1% decline as the buyers' strike continues. The energy sector (-0.1%) has given up its intraday gain and has turned negative.
The consumer discretionary (-3.3%) and information technology (-3.0%) sectors are down at least 3.0% amid pronounced weakness in the mega-cap/growth stocks. The Philadelphia Semiconductor Index is down 4.4%.
WTI crude futures settled higher by 1.1%, or $0.70, to $65.95/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34269.16 -473.66 (-1.36%)
Nasdaq 13389.46 -12.43 (-0.09%)
SP 500 4152.10 -36.33 (-0.87%)
10-yr Note -1/32 1.615
NYSE Adv 875 Dec 2389 Vol 994.5 mln
Nasdaq Adv 1565 Dec 2405 Vol 4.7 bln
Industry Watch
Strong: Materials
Weak: Energy, Financials, Industrials
Moving the Market
-- Cyclical/non-technology stocks succumbed to profit-taking interest
-- Growth stocks pared early losses as investors finally started to buy the dip
-- Pestering inflation expectations manifested in Treasury market and commodities
Non-technology stocks get hit, while growth stocks pare losses
11-May-21 16:20 ET
Dow -473.66 at 34269.16, Nasdaq -12.43 at 13389.46, S&P -36.33 at 4152.10
[BRIEFING.COM] The S&P 500 lost 0.9% on Tuesday in a relatively broad-based decline, although growth stocks benefited from a buy-the-dip mindset following a weak open. The Nasdaq Composite decreased 0.1% after starting with a 2.2% decline, and the Russell 2000 decreased 0.3% after starting with a 2.5% decline.
The Dow Jones Industrial Average underperformed and closed lower by 1.4% following yesterday's record-setting session.
For a change of pace this month, selling interest was concentrated in the cyclical/non-technology stocks, including those within the energy (-2.6%), financials (-1.7%), and industrials (-1.4%) sectors. The materials sector (+0.4%) was an exception and was the only sector in the S&P 500 that closed higher today.
Arguably, cyclical stocks were due for some profit taking after a strong start to the month, even though longer-dated Treasury yields and commodities continued to reflect inflation expectations. Inflation expectations were partially due to China's April PPI (+6.8% yr/yr) hitting its highest level since 2017 ahead of the U.S. April CPI report tomorrow.
The 10-yr yield increased two basis points to 1.62%, and the 2-yr yield increased one basis point to 0.16%. WTI crude futures increased 0.7%, or $0.45, to $65.25/bbl. Copper futures rose 1.5%, or $0.07, to $4.79/lb. The U.S. Dollar Index was little changed at 90.18.
Growth stocks, meanwhile, had a pitiful start that was attributed to negative momentum and the uptick in long-term interest rates. Fortunately, the weak open was viewed as an opportunistic entry point considering many of these stocks were down substantially from their record highs.
The ARK Innovation ETF (ARKK 106.12, +2.14, +2.1%) rose 2% after being down 5% intraday (and 38% off its record high), and the Philadelphia Semiconductor Index gained 0.3% after being down 3.2% intraday. The Vanguard Mega Cap Growth ETF (MGK 214.14, -0.50) declined just 0.2% after being down 1.9% intraday.
Roblox (RBLX 77.33, +13.33, +20.8%), which never traded lower today, rose 21% following its earnings report and the bargain-hunting mindset in growth stocks. Palantir (PLTR 20.21, +1.74, +9.4%) was initially down about 8% following its earnings report but closed higher by 9%.
Reviewing Tuesday's economic data:
Job openings increased to 8.123 million in March from a revised 7.526 million in February (from 7.367 million).
The NFIB Small Business Optimism Index for April increased to 99.8 from 98.2 in March.
Looking ahead, investors will receive the Consumer Price Index for April, the Treasury Budget for April, and the weekly MBA Mortgage Applications Index on Wednesday.
Dow Jones Industrial Average +12.0% YTD
Russell 2000 +11.8% YTD
S&P 500 +10.5% YTD
Nasdaq Composite +3.9% YTD
Crude futures settle above $65 per barrel
11-May-21 15:30 ET
Dow -411.71 at 34331.11, Nasdaq +15.46 at 13417.35, S&P -29.48 at 4158.95
[BRIEFING.COM] The S&P 500 is down 0.7%, and the Russell 2000 is down 0.4%.
One last look at the S&P 500 sectors shows energy (-2.3%), industrials (-1.4%), financials (-1.4%), and utilities (-1.4%) leading the decline, while the materials sector (+0.4%) bucks the negative trend with a 0.4% gain. For a change this month, non-technology stocks are underperforming.
WTI crude futures settled higher by 0.7%, or $0.45, to $65.25/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34742.82 -34.94 (-0.10%)
Nasdaq 13401.89 -350.38 (-2.55%)
SP 500 4188.43 -44.17 (-1.04%)
10-yr Note -2/32 1.600
NYSE Adv 1071 Dec 2233 Vol 998.2 mln
Nasdaq Adv 1004 Dec 2991 Vol 4.7 bln
Industry Watch
Strong: Energy, Materials, Financials, Industrials, Consumer Staples, Utilities, Real Estate
Weak: Information Technology, Consumer Discretionary, Communication Services
Moving the Market
-- Negative momentum builds in the growth-stock space, takes steam off the cyclical trade
-- Dow trades at all-time highs, while Nasdaq retreats amid mega-cap weakness
Growth stocks bleed into the close
10-May-21 16:20 ET
Dow -34.94 at 34742.82, Nasdaq -350.38 at 13401.89, S&P -44.17 at 4188.43
[BRIEFING.COM] The S&P 500 fell 1.0% on Monday, as negative momentum accelerated in the heavily-weighted growth stocks with selling interest leaking into the broader market late in the day. The Nasdaq Composite (-2.6%) and Russell 2000 (-2.6%) both dropped 2.6%.
The Dow Jones Industrial Average was up as much as 0.9% intraday at all-time highs above the 35,000 level, but it retraced from that level and closed lower by 0.1%.
Growth stocks simply looked awful today on no specific macro catalyst, but some investors blamed the horrendous reaction to The Trade Desk's (TTD 489.60, -171.83, -26.0%) earnings report, Citigroup downgrading Alphabet (GOOG 2340.66, -57.03, -2.4%) and Facebook (FB 305.97, -13.11, -4.1%) to Neutral from Buy, and the early preference towards cyclical stocks as potential catalysts.
In addition, indiscernible efforts to buy the dip in growth stocks appeared to stoke concerns about further downside, and an intraday uptick in long-term interest rates added fuel to the fire. The Nasdaq Composite closed below its 50-day moving average (13,534) for the first time since the end of March. The 10-yr yield increased two basis points to 1.60%.
From a sector perspective, the S&P 500 information technology (-2.5%), communication services (-1.9%), and consumer discretionary (-2.0%) sectors took the brunt of the damage amid weakness in the mega-caps and semiconductor stocks. The Philadelphia Semiconductor Index dropped 4.7%.
Losses piled on in the afternoon, and the pronounced weakness in growth stocks took some steam out of the cyclical sectors. The materials (-0.4%) and energy (-0.1%) sectors, for example, closed lower after they were the top performers at the open, as copper and energy prices keyed off reopening optimism and the shutdown of the Colonial Pipeline over the weekend.
The defensive-oriented utilities (+1.0%), consumer staples (+0.8%), real estate (+0.4%), and health care (+0.1%) sectors finished as leaders in positive territory alongside the industrials sector (+0.1%).
Investors faded the commodity-related theme, as copper prices eventually settled down 0.3% to $4.72/lb after being up as much as 2.8% and RBOB gasoline futures settled fractionally lower (-0.02%) at $2.13/gallon after being up as much as 4.2%. WTI crude futures increased 0.1%, or $0.05, to $64.80/bbl.
The 2-yr yield increased one basis point to 0.15%. The U.S. Dollar Index was little changed at 90.22%.
Investors did not receive any economic data of note on Monday. The NFIB Small Business Optimism Index for April and the JOLTS - Job Openings report for March will be released on Tuesday.
Dow Jones Industrial Average +13.5% YTD
Russell 2000 +12.3% YTD
S&P 500 +11.5% YTD
Nasdaq Composite +4.0% YTD
WTI crude futures settle with marginal gain
10-May-21 15:30 ET
Dow +108.50 at 34886.26, Nasdaq -304.30 at 13447.97, S&P -27.94 at 4204.66
[BRIEFING.COM] The S&P 500 continues to trade lower by 0.7%, while the Russell 2000 is down 2.0%.
One last look at the sector performances shows information technology (-2.2%), consumer discretionary (-1.6%), and communication services (-1.8%) continuing to lead the retreat, while the consumer staples (+1.0%) and utilities (+1.4%) sectors are atop the standings in part due to their defensive-oriented characteristics.
WTI crude futures settled higher by 0.1%, or $0.05, to $64.80/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34777.76 +229.23 (0.66%)
Nasdaq 13752.27 +119.39 (0.88%)
SP 500 4232.60 +30.98 (0.74%)
10-yr Note 0/32 1.566
NYSE Adv 2435 Dec 829 Vol 871.7 mln
Nasdaq Adv 2706 Dec 1360 Vol 4.3 bln
Industry Watch
Strong: Energy, Materials, Industrials, Information Technology, Real Estate
Weak: Consumer Staples
Moving the Market
-- April employment report was relatively disappointing, but investors found reasons to stay constructive on the market
-- S&P 500 and Dow closed at record highs, cyclical stocks led the advance, growth stocks benefited from dip-buying efforts
-- Nonfarm payrolls increased by just 266,000 in April (Briefing.com consensus 1,000,000)
-- 10-yr yield recovered from post-employment report drop
Market looks past relatively disappointing employment report
07-May-21 16:15 ET
Dow +229.23 at 34777.76, Nasdaq +119.39 at 13752.27, S&P +30.98 at 4232.60
[BRIEFING.COM] The S&P 500 (+0.7%) and Dow Jones Industrial Average (+0.7%) set intraday and closing record highs on Friday, as investors found reasons to look past the huge payrolls miss in the April employment report. The Nasdaq Composite (+0.9%) and Russell 2000 (+1.4%) outperformed.
Nonfarm payrolls increased by just 266,000 in April, which was well below the Briefing.com consensus of 1,000,000 and the downward revision for March. In addition, the unemployment rate was 6.1% (Briefing.com consensus 5.8%), versus 6.0% in March, and average hourly earnings increased 0.7% (Briefing.com consensus -0.1%).
After an initial shock, market participants interpreted the report to suggest at least two things: 1) the Fed will feel assured that it's still not time to start talking about tapering asset purchases, and 2) it was a temporary blip in the economic recovery as the extended unemployment benefits may have provided a disincentive for people to return to work.
Another narrative put forth by the Biden administration and some Democratic lawmakers was that the report painted the case for passing the proposed government spending plans. The reaction in the market made it clear that both growth and value investors had an interpretation they liked.
Every sector in the S&P 500 closed higher, paced by the energy (+1.9%), real estate (+1.2%), industrials (+1.1%), materials (+0.9%), and information technology (+0.8%) sectors. The consumer staples sector (+0.01%) underperformed and closed a hair above its flat line.
Besides the leadership from the cyclical stocks, growth concerns were dismissed by higher copper prices ($4.75/lb, +0.14, +3.2%) and a turnaround in the 10-yr yield, which went from 1.48% in the wake of the employment report to 1.58%, or two basis points above Thursday's settlement.
Growth-stock investors may have also used the headline jobs miss as a better reason (compared to yesterday's Merkel vaccine news) to buy the dip in the information technology sector and other beaten-down spaces. The ARK Innovation ETF (ARK 109.72, +1.38, +1.3%) increased 1.3% but ended the week down 9%.
The 2-yr yield decreased one basis point to 0.14%. The U.S. Dollar Index decreased 0.8% to 90.22. WTI crude futures increased 0.4%, or $0.25, to $64.94/bbl.
Reviewing Friday's economic data:
The April employment report was surprisingly weak, with just 266,000 jobs added to nonfarm payrolls (Briefing.com consensus 1,000,000) and downward revisions to March. April unemployment rate was 6.1% (Briefing.com consensus 5.8%), versus 6.0% in March. April average hourly earnings increased 0.7% (Briefing.com consensus -0.1%) versus a 0.1% decrease in March.
The key takeaway from the report is that net job gains were negative, excluding the leisure and hospitality industry, which added 331,000 jobs. It is a stunning slowdown from March and has ignited the argument that extended unemployment benefits have created a disincentive to look for work. In turn, it has also ignited the idea that the market has gotten ahead of itself with its recovery/reopening enthusiasm.
Consumer credit increased by $25.8 bln in March after increasing a downwardly revised $26.2 bln (from $27.6 bln) in February.
The key takeaway from the report is that it was the second straight month that the expansion in consumer credit exceeded $25 billion, underscoring the improved lending demand in a recovering economy.
Wholesale inventories increased 1.3% m/m in March (Briefing.com consensus 1.4%) following an upwardly revised 1.0% increase (from +0.6%) in February.
Investors will not receive any notable economic data on Monday.
Russell 2000 +15.0% YTD
Dow Jones Industrial Average +13.6% YTD
S&P 500 +12.7% YTD
Nasdaq Composite +6.7% YTD
Crude futures edge higher, energy stocks in the lead
07-May-21 15:25 ET
Dow +253.82 at 34802.35, Nasdaq +142.95 at 13775.83, S&P +35.80 at 4237.42
[BRIEFING.COM] The S&P 500 is trading at session highs with a 0.8% gain and is on track to close at a record high.
One last look at the S&P 500 sectors shows energy (+1.7%), industrials (+1.1%), and information technology (+0.9%) leading the advance, while the consumer staples sector (+0.1%) trails the action with a 0.1% gain.
WTI crude futures settled higher by 0.4%, or $0.25, to $64.94/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34548.53 +318.19 (0.93%)
Nasdaq 13632.88 +50.42 (0.37%)
SP 500 4201.62 +34.03 (0.82%)
10-yr Note +1/32 1.569
NYSE Adv 1799 Dec 1444 Vol 1.0 bln
Nasdaq Adv 1687 Dec 2335 Vol 4.9 bln
Industry Watch
Strong: Financials, Consumer Staples, Information Technology
Weak: Health Care
Moving the Market
-- Blue-chips set the tone, investors bought the dip in technology
-- German Chancellor Merkel is reportedly against patent waivers for COVID-19 vaccines
-- Weakness in the high-growth story stocks
-- Weekly initial claims fell to new post-pandemic low at 498,000 (Briefing.com consensus 530,000)
Investors lean on the blue-chips and buy the dip in technology
06-May-21 16:25 ET
Dow +318.19 at 34548.53, Nasdaq +50.42 at 13632.88, S&P +34.03 at 4201.62
[BRIEFING.COM] The S&P 500 advanced 0.8% on Thursday in a comeback session, as investors gravitated toward the blue-chip stocks and bought the dip in technology. The Dow Jones Industrial Average (+0.9%) set intraday and closing record high, while the Nasdaq Composite (+0.4%) snapped a four-session losing streak with a more modest gain. The Russell 2000 finished flat.
Each of the major indices opened little changed, not reacting to the spate of earnings reports or the fact that weekly initial claims declined to a new post-pandemic low at 498,000 (Briefing.com consensus 530,000). Selling momentum, however, quickly gripped the Nasdaq and many of the high-growth story stocks that peaked in February. The Nasdaq was down 1.1% intraday.
Investors consequently assumed a defensive-oriented mindset that was manifested in the early leadership from the S&P 500 consumer staples sector (+1.3%), the blue-chips within the Dow, and a firmer Treasury market. The 10-yr yield declined two basis points to 1.56%.
Fortunately, the defensive mindset softened up following reports that German Chancellor Merkel was against patent waivers for COVID-19 vaccines, contrary to support from the USTR and interest from the European Commission President.
The information technology sector (+1.0%) benefited from a buy-the-dip mindset after being down 0.8% intraday, and 3.0% for the week, but the gains were relatively broad-based. The financials sector (+1.4%) finished atop the standings, while the health care sector (+0.1%) was interestingly the laggard with a slim gain.
Many of the high-growth story stocks remained in the gutters, though, best exemplified by the ARK Innovation ETF (ARKK 108.34, -3.21, -2.9%) closing lower by 3% and slipping further below its 200-day moving average.
In addition, Uber (UBER 46.65, -4.53, -8.9%), Twilio (TWLO 301.12, -31.60, -9.4%), Etsy (ETSY 157.68, -26.89, -14.6%), and Fastly (FSLY 42.31, +15.75, -27.1%) fell sharply following their earnings reports. PayPal (PYPL 252.02, +4.62, +1.9%), while not a Dow component, fit the blue-chip narrative with a 2% earnings-driven gain.
The 2-yr yield was unchanged at 0.15%. The U.S. Dollar Index decreased 0.4% to 90.90. WTI crude futures decreased 1.4%, or $0.94, to $64.69/bbl.
Reviewing Thursday's economic data:
Initial jobless claims for the week ending May 1 declined by 92,000 to 498,000 (Briefing.com consensus 530,000), which is the lowest level since March 14, 2020. Continuing claims for the week ending April 24 increased by 37,000 to 3.690 million.
The key takeaway from the report is the downtrend in initial claims, which is consistent with an economy that is reopening and necessitating more hiring activity.
Nonfarm business sector labor productivity increased at a 5.4% annual rate in the first quarter (Briefing.com consensus 5.0%) while unit labor costs decreased at an annual rate of 0.3% (Briefing.com consensus -1.6%).
The key takeaway from the report is the pickup in productivity and the corresponding effect of helping to hold down labor costs, which is something that will continue to feed the Fed's patience for holding its easy policy line despite clear signs of commodity cost inflation.
Looking ahead, investors will receive the Employment Situation Report for April, Consumer Credit for March, and Wholesale Inventories for March on Friday.
Russell 2000 +13.5% YTD
Dow Jones Industrial Average +12.9% YTD
S&P 500 +11.9% YTD
Nasdaq Composite +5.8% YTD
WTI crude futures settle lower, weigh on energy stocks
06-May-21 15:25 ET
Dow +163.13 at 34393.47, Nasdaq -45.58 at 13536.88, S&P +10.05 at 4177.64
[BRIEFING.COM] The S&P 500 is up 0.3% amid gains in eight of its 11 sectors.
One last look at the sector performances shows consumer staples (+1.0%) and financials (+0.9%) atop the leaderboard, while the health care (-0.5%), consumer discretionary (-0.3%), and energy (-0.1%) sectors trade lower.
WTI crude futures settled lower by 1.4%, or $0.94, to $64.69/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34230.34 +97.31 (0.29%)
Nasdaq 13582.46 -51.08 (-0.37%)
SP 500 4167.59 +2.93 (0.07%)
10-yr Note +2/32 1.577
NYSE Adv 1726 Dec 1537 Vol 928.8 mln
Nasdaq Adv 1863 Dec 2278 Vol 4.5 bln
Industry Watch
Strong: Energy, Materials, Financials
Weak: Utilities, Real Estate, Consumer Discretionary, Communication Services, Information Technology
Moving the Market
-- Dow closes at record high in mixed session that favored value and cyclical stocks
-- Technology/growth stocks were unable to sustain early efforts to buy the dip
-- Decent economic data on services sector activity and private-sector hiring activity
-- Treasury Secretary Yellen and other Fed speakers downplayed sustained inflation pressures, with Ms. Yellen walking back on prior interest rate comments
Dow closes at record high in another rotation day
05-May-21 16:20 ET
Dow +97.31 at 34230.34, Nasdaq -51.08 at 13582.46, S&P +2.93 at 4167.59
[BRIEFING.COM] The S&P 500 increased 0.1% on Wednesday in a mixed session that favored the value and cyclical stocks. The Dow Jones Industrial Average (+0.3%) outperformed for the third straight day and set fresh record highs, while the Nasdaq Composite decreased 0.4% after starting with a 0.9% gain. The Russell 2000 lost 0.3%.
The energy (+3.3%), materials (+1.3%), and financials (+0.9%) sectors represented the cyclical leadership, partially due to rotational factors since oil prices ($65.63/bbl, -0.07, -0.1%) and Treasury yields were muted today. Decent economic data on services sector activity and the labor market likely fueled the reopening narrative, though.
Conversely, the information technology (-0.2%), consumer discretionary (-0.4%), and communication services (-0.3%) sectors exerted the influential weakness after a half-hearted rebound bid to start the day. The lightly-weighted utilities (-1.7%) and real estate (-1.5%) sectors were the weakest performers.
Like the Nasdaq, the information technology sector was up as much as 1.0% intraday after falling about 2% yesterday. The inability to sustain a buy-the-dip effort, however, was viewed as an indicator of tiredness and wasn't conducive for risk sentiment.
Despite the disappointing price action in the growth-stock oriented sectors, overall price action remained consistent with consolidation activity. In other words, the index moves were benign with a lot of churn happening at the sector and individual stock levels.
Specifying today's economic data, the ISM Non-Manufacturing Index decreased to 62.7% in April (Briefing.com consensus 65.0%) from 63.7% in March. The ADP Employment Change report for April showed 742,000 jobs were added to private-sector payrolls (Briefing.com consensus 810,000). While they missed expectations, the reports still depicted healthy activity in the services sector and on the hiring front.
Separately, Treasury Secretary Yellen, Chicago Fed President Evans (FOMC voter), and Fed Vice Chair Clarida (FOMC voter) all downplayed sustained inflation pressures. Ms. Yellen also clarified prior comments on interest rates, saying she wasn't predicting, nor recommending, the Fed to hike rates in response to government stimulus proposals.
In the Treasury market, the 2-yr yield decreased one basis point to 0.15%, and the 10-yr yield decreased one basis point to 1.58%. The U.S. Dollar Index was little changed at 91.27.
Reviewing Wednesday's economic data:
The ISM Non-Manufacturing Index decreased to 62.7% in April (Briefing.com consensus 65.0%) from 63.7% in March. The dividing line between expansion and contraction is 50.0%. The April reading marks the eleventh straight month of growth for the services sector and follows a record high reading for March.
The key takeaway from the report is the understanding that services sector activity is still running at a fast pace, as business activity slowed only modestly from the record pace logged in March.
The ADP Employment Change report estimated that 742,000 jobs were added to private-sector payrolls in April (Briefing.com consensus 810,000) following an upwardly revised 565,000 increase (from 517,000) in March. This was the largest increase since September 2020.
The IHS Markit Services PMI for April was revised higher to 64.7% from 63.7% in the preliminary reading.
The weekly MBA Mortgage Applications Index decreased 0.9% following a 2.5% decline in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report and preliminary Productivity and Unit Labor Costs for the first quarter on Thursday.
Russell 2000 +13.5% YTD
Dow Jones Industrial Average +11.8% YTD
S&P 500 +11.0% YTD
Nasdaq Composite +5.4% YTD
Biden administration to support waiver for COVID-19 patent protections
05-May-21 15:30 ET
Dow +95.57 at 34228.60, Nasdaq -65.16 at 13568.38, S&P +1.65 at 4166.31
[BRIEFING.COM] The S&P 500 is up just 0.1%, while the Nasdaq dips lower by 0.4%.
Shares of Moderna (MRNA 162.50, -10.82, -6.4%), Pfizer (PFE 39.60, -0.35, -0.9%), and other COVID-19 vaccine makers are trading lower amid news that the Biden administration will support a waiver of patent protections for COVID-19 vaccines, according to CNBC. It was previously reported that the USTR would have talks with the WTO about this waiver.
WTI crude futures settled lower by 0.1%, or $0.07, to $65.63/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34133.03 +19.80 (0.06%)
Nasdaq 13633.54 -261.61 (-1.88%)
SP 500 4164.66 -28.00 (-0.67%)
10-yr Note +1/32 1.592
NYSE Adv 1402 Dec 1837 Vol 951.9 mln
Nasdaq Adv 1186 Dec 2207 Vol 5.8 bln
Industry Watch
Strong: Information Technology, Consumer Discretionary, Communication Services
Weak: Financials, Materials, Industrials, Energy, Health Care
Moving the Market
-- Mega-cap/growth/technology stocks closed sharply lower
-- Rotation into cyclical stocks, which helped lift the Dow
-- Treasury Secretary Yellen said interest rates may need to rise to prevent the economy from overheating
Down day for growth stocks, while Dow ekes out gain
04-May-21 16:15 ET
Dow +19.80 at 34133.03, Nasdaq -261.61 at 13633.54, S&P -28.00 at 4164.66
[BRIEFING.COM] The S&P 500 declined 0.7% on Tuesday, pressured by weakness in the mega-cap/growth/technology stocks, which disproportionately affected the Nasdaq Composite (-1.9%). The Russell 20000 declined 1.3%, while the Dow Jones Industrial closed higher by 0.1% amid a relatively upbeat finish.
From the get-go, the heavily-weighted growth stocks within the S&P 500 information technology (-1.9%), consumer discretionary (-1.2%), and communication services (-0.9%) sectors struggled, extending their underperformance from the prior day. Shares of Apple (AAPL 127.85, -4.69, -3.5%) fell 3.5%.
Money appeared to rotate into the large-cap cyclical stocks within the materials (+1.0%), financials (+0.7%), industrials (+0.4%), and energy (+0.02%) sectors. At one point, they were each trading in negative territory but seemed to draw support from an observation from Treasury Secretary Yellen.
Briefly, Ms. Yellen acknowledged in an interview with The Atlantic that interest rates may need to rise somewhat to prevent the economy from overheating, partially as a result from increased government spending. This view on the economy presumably supported the case to have exposure to cyclical stocks as reopening activity accelerates.
This view wasn't without its controversy, though, since some were confused if she meant market rates or the fed funds rate. If she meant the former, it wasn't particularly novel since many have been calling for long-term interest rates to rise with inflation expectations and economic growth. Higher rates help keep the economy in check through tighter financial conditions.
It would be remiss to not mention that growth stocks were underperforming well before the Treasury Secretary's comments on higher rates (viewed as a negative for their valuations), and that the Treasury market was behaving as a signpost for the peak growth narrative. There was no specific news that catalyzed the growth-stock selling.
The 10-yr yield, which is the benchmark for inflation/growth expectations, decreased two basis points to 1.59%. The 2-yr yield increased one basis point to 0.16%. The U.S. Dollar Index increased 0.4% to 91.27. WTI crude futures rose 1.9%, or $1.21, to $65.70/bbl.
In other developments, CVS Health (CVS 81.12, +3.43, +4.4%) reported better-than-expected earnings results and issued upside FY21 EPS guidance. President Biden said his new goal is to vaccinate 70% of U.S. adults with at least one shot by July 4. The FDA could soon approve Pfizer's (PFE 39.95, +0.12, +0.3%) COVID-19 vaccine for emergency use in children ages 12-15, according to The New York Times.
Reviewing Tuesday's economic data:
The U.S. trade deficit widened to $74.4 billion in March (Briefing.com consensus -$74.7 billion) from an upwardly revised $70.5 billion (from -$71.1 billion) in February, with exports increasing by $12.4 billion to $200.0 billion and imports increasing by $16.4 billion to $274.5 billion.
The key takeaway from the report is that both exports and imports increased sharply, which is a telltale sign of increased demand. Importantly, it was exports and imports of both industrial supplies and materials and consumer goods that paced the pickup in trade activity, speaking to the uptick in demand seen for businesses and consumers alike.
Factory orders for manufactured goods increased 1.1% m/m in March (Briefing.com consensus 0.7%) after decreasing an upwardly revised 0.5% (from -0.7%) in February. Shipments of manufactured goods were up 2.1% after declining 1.9% in February.
The key takeaway from the report is that it suggests the recovery blip in February was largely a function of extreme winter weather and some natural slowing after a long streak of gains in factory orders. The report also demonstrates that demand for manufactured goods was quick to rebound.
Looking ahead, investors will receive the ISM Non-Manufacturing Index for April, the ADP Employment Change report for April, the final IHS Markit Services PMI for April, and the weekly MBA Mortgage Applications Index on Wednesday.
Russell 2000 +13.8% YTD
Dow Jones Industrial Average +11.5% YTD
S&P 500 +10.9% YTD
Nasdaq Composite +5.8% YTD
WTI crude futures settle higher, support energy stocks
04-May-21 15:30 ET
Dow -103.33 at 34009.90, Nasdaq -332.85 at 13562.30, S&P -46.05 at 4146.61
[BRIEFING.COM] The S&P 500 is down 1.1%, while the Russell 2000 is down 1.5%.
One last look at the S&P 500 sectors shows information technology (-2.3%), consumer discretionary (-1.9%), and communication services (-1.4%) still leading the decline; conversely, the financials (+0.3%), materials (+0.6%), industrials (+0.2%), and energy (+0.2%) sectors still trade higher.
WTI crude futures settled higher by 1.9%, or $1.21, to $65.70/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34113.23 +238.38 (0.70%)
Nasdaq 13895.15 -67.56 (-0.48%)
SP 500 4192.66 +11.49 (0.27%)
10-yr Note +2/32 1.606
NYSE Adv 2244 Dec 1036 Vol 888.5 mln
Nasdaq Adv 2215 Dec 1853 Vol 4.6 bln
Industry Watch
Strong: Energy, Materials, Health Care, Industrials
Weak: Consumer Discretionary, Communication Services, Information Technology, Real Estate
Moving the Market
-- Market closes mostly higher, but Nasdaq closes lower amid relative weakness in growth stocks
-- April ISM Manufacturing PMI misses expectations, but prices component rises to highest level since 2008
-- Various/conflicting narratives and consolidation activity
Mixed and conflicting session
03-May-21 16:15 ET
Dow +238.38 at 34113.23, Nasdaq -67.56 at 13895.15, S&P +11.49 at 4192.66
[BRIEFING.COM] The S&P 500 increased 0.3% on Monday in a session marked by various narratives and consolidation activity. The Dow Jones Industrial Average (+0.7%) and Russell 2000 (+0.5%) outpaced the benchmark index, while the Nasdaq Composite declined 0.5% despite a positive open.
To start, the ISM Manufacturing Index for April decelerated to 60.7% (Briefing.com consensus 65.3%) from 64.7% in March, supporting the "peak growth" narrative that partially explained last Friday's decline. The Prices component within the index, meanwhile, reached its highest level since 2008 at 89.6%, corroborating inflation expectations and an observation from Warren Buffett.
Neither of these narratives, however, were completely supported by the market today. For example, the cyclical energy (+2.9%), materials (+1.5%), and industrials (+1.0%) sectors were among the top performers today, reflecting growth/reopening optimism. Inflation concerns, and conversely growth optimism, were dismissed by the gains in longer-dated Treasuries.
Growth stocks underperformed, particularly those within the S&P 500 information technology (-0.2%), consumer discretionary (-0.7%), and communication services (-0.4%) sectors. The Philadelphia Semiconductor Index declined 1.2%.
Specifying Warren Buffett's observation, he said in Berkshire Hathaway's (BRK.B 279.18, +4.23, +1.5%) annual shareholder meeting over the weekend that his businesses are seeing "substantial inflation" and that they're raising prices in response to the higher costs they are incurring. On a related note, Fed Chair Powell said in a speech today that inflation remained under control.
Evidently, it was easy to cherry pick data to support certain claims while using other data to refute such claims. One could even have pointed to the negative performance in the Nasdaq as early evidence for the "sell in May, go away" mantra.
From a broader viewpoint, Monday's price action remained consistent with consolidation activity. The S&P 500 has essentially made no progress since the close on April 16.
In the Treasury market, the 10-yr yield decreased two basis points to 1.61%, and the 2-yr yield decreased one basis point to 0.15%. The U.S. Dollar Index decreased 0.4% to 90.96. WTI crude futures rose 1.5%, or $0.98, to $64.49/bbl.
Reviewing Monday's economic data:
The ISM Manufacturing Index for April decelerated to 60.7% (Briefing.com consensus 65.3%) from 64.7% in March. A number above 50.0% connotes an expansion in manufacturing activity. April marked the eleventh straight month of expansion.
The key takeaway from the report for many will be the understanding that the Prices component jumped to 89.6% from 85.9% and sits at its highest level since 2008. All 18 industries reported paying higher prices for raw materials for the fourth straight month.
Total construction spending increased by 0.2% m/m in March (Briefing.com consensus 1.6%) after declining an upwardly revised 0.6% (from 0.8%) in February. Total private construction rose 0.7% m/m while total public construction spending decreased 1.5%.
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 60.5%, fractionally lower from the 60.6% preliminary reading.
Looking ahead, investors will receive the Trade Balance Report for March and Factory Orders for March on Tuesday.
Russell 2000 +15.3% YTD
S&P 500 +11.6% YTD
Dow Jones Industrial Average +11.5% YTD
Nasdaq Composite +7.8% YTD
WTI crude futures settle higher, fuel energy stocks
03-May-21 15:25 ET
Dow +267.55 at 34142.40, Nasdaq -56.06 at 13906.65, S&P +15.10 at 4196.27
[BRIEFING.COM] The S&P 500 continues to trade modestly higher by 0.4% amid gains in most sectors.
One last look at the S&P 500 sectors shows energy (+2.9%), materials (+1.8%), industrials (+1.1%), health care (+1.1%), and consumer staples (+1.0%) outperforming with gains of at least 1.0%. Conversely, the consumer discretionary (-0.6%), real estate (-0.5%), communication services (-0.3%), and information technology (-0.2%) sectors lag.
WTI crude futures settled lower higher by 1.5%, or $0.98, to $64.49/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 33874.85 -185.51 (-0.54%)
Nasdaq 13962.71 -119.86 (-0.85%)
SP 500 4181.17 -30.30 (-0.72%)
10-yr Note +1/32 1.629
NYSE Adv 1078 Dec 2195 Vol 1.2 bln
Nasdaq Adv 1380 Dec 2761 Vol 4.7 bln
Industry Watch
Strong: Consumer Discretionary, Utilities, Real Estate, Consumer Staples
Weak: Information Technology, Energy, Materials, Financials
Moving the Market
-- Stock market closes lower, unable to key off great earnings/economic news
-- Disappointing price action fed into the "peak growth" narrative
-- Amazon (AMZN) reported strong earnings results and provided upbeat Q2 revenue guidance
Negative session despite good earnings and economic data
30-Apr-21 16:15 ET
Dow -185.51 at 33874.85, Nasdaq -119.86 at 13962.71, S&P -30.30 at 4181.17
[BRIEFING.COM] The S&P 500 declined 0.7% on Friday, finishing the week little changed, as the market was unable to key off another round of great economic and earnings news. The Nasdaq Composite lost 0.9%, and the Dow Jones Industrial Average lost 0.5%. The Russell 2000 lagged with a 1.3% decline.
Briefly, Amazon (AMZN 3467.42, -3.89, -0.1%) posted strong Q1 results and issued upbeat Q2 revenue guidance, and personal income surged 21.1% m/m in March (Briefing.com consensus 20.5%) due to the government stimulus checks. The PCE Price Index, which is the Fed's preferred inflation gauge, was up 2.3% yr/yr in March while the core reading was only up 1.8% yr/yr.
The market wasn't impressed, but if it was, it didn't show it: AMZN shares closed lower, and seven of the 11 S&P 500 sectors closed lower. The information technology (-1.4%) and energy (-2.7%) sectors struggled at the bottom of the sector standings, with the latter pressured by weakness in Chevron (CVX 103.03, -3.87, -3.6%) despite beating EPS estimates.
Twitter (TWTR 55.22, -9.87, -15.2%) was another disappointment, as shares dropped 15% following its underwhelming earnings report.
Conversely, the consumer discretionary sector (+0.3%), where Amazon and Tesla (TSLA 709.44, +32.44, +4.8%) reside, joined the defensive-oriented utilities (+0.8%), real estate (+0.6%), and consumer staples (+0.04%) sectors in positive territory.
The relatively disappointing price action fed into the "peak growth" narrative, which says the market will find it harder to keep rallying when growth rates for the economy and earnings might not be as fast as they did coming out of the pandemic. Many expect economic growth rates to moderate in the second half of this year.
From a broader viewpoint, today was part of a two-week consolidation trend following a five-week stretch in which the S&P 500 gained roughly 8% leading into earnings season. Thus, with the peak growth narrative and sideways activity in mind, investors presumably felt uneasy about buying in front of a potential pullback.
U.S. Treasuries finished little changed, albeit with some defensive undertones in the longer-end of the curve. The 2-yr yield was unchanged at 0.16%, and the 10-yr yield decreased one basis point to 1.63%. The U.S. Dollar Index advanced 0.7% to 91.27. WTI crude futures fell 2.4%, or $1.52, to $63.51/bbl.
Reviewing Friday's economic data:
Personal income surged 21.1% month-over-month in March (Briefing.com consensus 20.5%) and personal spending rose 4.2% (Briefing.com consensus 4.0%). The PCE Price Index jumped 0.5%, as expected, leaving it up 2.3% year-over-year, while the core PCE Price Index, which excludes food and energy, increased 0.4% (Briefing.com consensus 0.3%), leaving it up 1.8% year-over-year.
The key takeaway from the report is the influence of the personal current transfer receipts. They were massive, but they will be lessening big time in coming months, which allows for some consternation pertaining to the peak growth narrative.
The final April reading for the University of Michigan Index of Consumer Sentiment increased to 88.3 (Briefing.com consensus 87.0) from the preliminary reading of 84.9. The final reading for March was 84.9.
The key takeaway from the report is the finding that an all-time record number of consumers expect the unemployment rate to decline in the year ahead, which is an important view as it relates to spending potential.
The Q1 Employment Cost Index increased 0.9% (Briefing.com consensus 0.7%), seasonally adjusted, for the three-month period ending in March 2021 after increasing 0.7% for the three-month period ending December 2020. Wages and salaries, which account for about 70% of compensation costs, rose 1.0%, while benefit costs, which make up the remainder of compensation costs, increased 0.6%.
The key takeaway from the report is that wages and salaries for civilian workers, private industry workers, and state and local government workers were down from the same period a year ago, which is a basis for why the Fed intends to remain patient with its policy stance.
The Chicago PMI increased to 72.1 in April (Briefing.com consensus 62.0) from 66.3 in March.
Looking ahead, investors will receive the ISM Manufacturing Index for April, Construction Spending for March, and the final IHS Markit Manufacturing PMI for April on Monday.
Russell 2000 +14.8% YTD
S&P 500 +11.3% YTD
Dow Jones Industrial Average +10.7% YTD
Nasdaq Composite +8.3% YTD
Crude futures retrace 2%
30-Apr-21 15:30 ET
Dow -166.52 at 33893.84, Nasdaq +108.10 at 14190.67, S&P -26.35 at 4185.12
[BRIEFING.COM] The S&P 500 is down 0.6% in a session controlled by sellers. Any recovery attempt today has been feeble.
One last look at the S&P 500 sectors shows information technology (-1.3%) and energy (-2.5%) leading the retreat, while the real estate (+0.6%), utilities (+0.4%), and consumer discretionary (+0.3%) sectors trade modestly higher.
WTI crude futures settled lower by 2.4%, or $1.52, to $63.51/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 33820.38 -164.55 (-0.48%)
Nasdaq 14051.05 -39.19 (-0.28%)
SP 500 4183.18 -3.54 (-0.08%)
10-yr Note +1/32 1.613
NYSE Adv 1898 Dec 1317 Vol 820.0 mln
Nasdaq Adv 2276 Dec 1794 Vol 4.5 bln
Industry Watch
Strong: Energy, Communication Services
Weak: Information Technology, Health Care
Moving the Market
-- Fed Chair Powell said it's not time to start talking about tapering asset purchases
-- Fed keeps rates and pace of asset purchases unchanged, as expected
-- Dow underperformed amid disappointing earnings reactions in Microsoft (MSFT), Boeing (BA), and Amgen (AMGN)
-- Alphabet (GOOG) crushed EPS estimates
Large-cap indices close slightly lower on Fed day
28-Apr-21 16:20 ET
Dow -164.55 at 33820.38, Nasdaq -39.19 at 14051.05, S&P -3.54 at 4183.18
[BRIEFING.COM] The S&P 500 decreased 0.1% on Wednesday in another tight-ranged session, as the broader market showed little reaction to the Fed's policy decision or earnings news. The Nasdaq Composite (-0.3%) and Dow Jones Industrial Average (-0.5%) also closed lower, while the Russell 2000 (+0.1%) closed slightly higher.
The FOMC did as everyone expected by keeping rates near zero and leaving the pace of asset purchases unchanged by at least $120 billion per month. In his press conference, Fed Chair Powell said it wasn't time to start talking about tapering asset purchases and reiterated it'll take substantial further progress until the Fed's employment and inflation goals are reached, meaning those discussions will have to wait a while longer.
There was some uncertainty if the Fed was going to hint at these tapering discussions, but Mr. Powell made it clear throughout this Q&A session that the Fed was assured with its current policy stance. Mr. Powell also downplayed inflation risks and acknowledged some things in capital markets are frothy.
The initial reaction to the tapering comment was modest: a 15-point gain in the S&P 500 to the 4200 level (record high), which was consequently met with selling pressure. Overall, the index moves were tame, respecting the recent consolidation trend in the market.
The communication services (+1.2%) and energy (+3.4%) sectors saw notable strength today, keying off their own catalysts in Alphabet's (GOOG 2379.91, +72.79, +3.2%) blowout earnings report and a bullish call on oil ($63.86, +0.91, +1.5%) out of Goldman Sachs. The firm said it expects crude prices to reach $80 per barrel over the next six months due to strong demand.
Conversely, the information technology sector (-1.0%) was the weakest link with a 1% decline, predominately due to a disappointing earnings reaction in Microsoft (MSFT 254.56, -7.41, -2.8%). Semiconductor stocks also lagged, particularly Texas Instruments (TXN 181.82, -8.39, -4.4%) despite reporting positive earnings results.
Amgen (AMGN 236.71, -18.42, -7.2%) and Boeing (BA 235.46, -7.01, -2.9%) joined Microsoft as earnings laggards in the Dow. Visa (V 233.45, +3.54, +1.5%), however, provided offsetting support in the tech sector and Dow following its earnings report.
U.S. Treasury yields declined from session highs, settling little changed, following the release of the FOMC statement and Fed Chair Powell's affirmation of the Fed's view that inflation will be transitory. The 10-yr yield was unchanged at 1.62%, and the 2-yr yield was unchanged at 0.17%. The U.S. Dollar Index decreased 0.4% to 90.58.
Reviewing Wednesday's economic data:
The Advance report for International Trade in Goods for March showed a deficit of $90.6 billion versus $86.7 billion in February. The Advance report for Retail Inventories for March decreased 1.4%, while the Advance report for Wholesale Inventories for March increased 1.4%.
The MBA Mortgage Applications Index decreased 2.5% following an 8.6% increase in the prior week.
Looking ahead, investors will receive the advance estimate for Q1 GDP, the weekly Initial and Continuing Claims report, and Pending Home Sales for March on Thursday.
Russell 2000 +16.7% YTD
S&P 500 +11.4% YTD
Dow Jones Industrial Average +10.5% YTD
Nasdaq Composite +9.0% YTD
Resistance at the 4200 level
28-Apr-21 15:25 ET
Dow -114.47 at 33870.46, Nasdaq -9.51 at 14080.73, S&P +3.16 at 4189.88
[BRIEFING.COM] The S&P 500 is up 0.1% after finding resistance at the 4200 level, which it touched for the first time ever. Fed Chair Powell has just concluded his press conference.
One last look at the S&P 500 sectors shows energy (+3.4%) and communication services (+1.7%) still firmly in the lead, while the information technology sector (-0.7%) lags with a 0.7% decline.
WTI crude futures settled higher by 1.5%, or $0.91, to $63.86/bbl. On a related note, Goldman Sachs said it expects crude prices to reach $80 per barrel over the next six months due to strong demand.
Stock Market Update
https://www.briefing.com/stock-market-update
Market Snapshot
Dow 33984.93 +3.36 (0.01%)
Nasdaq 14090.24 -48.56 (-0.34%)
SP 500 4186.72 -0.90 (-0.02%)
10-yr Note -1/32 1.588
NYSE Adv 1603 Dec 1605 Vol 778.3 mln
Nasdaq Adv 1896 Dec 2250 Vol 4.6 bln
Industry Watch
Strong: Energy, Industrials, Financials
Weak: Information Technology, Communication Services, Health Care, Utilities
Moving the Market
-- Stock market closes little changed in front of Fed decision tomorrow afternoon
-- Cyclical tilt to the session, UPS (UPS) drove the outperformance of the industrials sector with a 10% earnings-driven gain
Flat session ahead of Fed decision tomorrow
27-Apr-21 16:15 ET
Dow +3.36 at 33984.93, Nasdaq -48.56 at 14090.24, S&P -0.90 at 4186.72
[BRIEFING.COM] The stock market closed little changed on Tuesday, as investors assumed a wait-and-see mindset for the Fed's policy announcement tomorrow. The S&P 500 (-0.02%), Dow Jones Industrial Average (+0.01%), Nasdaq Composite (-0.3%), and Russell 2000 (+0.1%) finished within 0.3% of their flat lines.
There was a cyclical tilt to the session, evident by the outperformances of the S&P 500 industrials (+0.9%), financials (+0.9%), and energy (+1.3%) sectors. These respective sectors drew support from a 10% earnings-driven gain in UPS (UPS 194.13, +18.32, +10.4%), curve-steepening activity in the Treasury market, and higher oil prices ($62.95, +0.99, +1.6%).
Conversely, the information technology (-0.3%), communication services (-0.5%), health care (-0.5%), and utilities (-0.8%) sectors were among the laggards in negative territory. No sector declined more than 1.0%, though.
Outside of UPS, the earnings picture wasn't as exciting. Tesla (TSLA 704.74, -33.46, -4.5%), General Electric (GE 13.49, -0.08, -0.6%), 3M (MMM 194.38, -5.25, -2.6%), and Eli Lilly (LLY 182.10, -5.12, -2.7%) were some of the larger companies that reported earnings, and shares closed lower in response.
The broader market was unmoved once again by the slate of earnings news, with institutional investors purportedly waiting for Microsoft (MSFT 261.97, +0.42, +0.2%) and Alphabet (GOOG 2307.12, -19.62, -0.8%) to report earnings after today's close. In addition, there was the typical reservation in front of the Fed's rate decision and Fed Chair Powell's press conference tomorrow.
Likewise, there was little reaction to the Conference Board's Consumer Confidence Index jumping to 121.7 in April (Briefing.com consensus 113.5) -- its highest reading since February 2020, or right before the pandemic shut down the economy. The better-than-expected reading was underpinned by a significant improvement in attitudes about current conditions.
Elsewhere, longer-dated Treasuries saw increased selling interest shortly after the reopening results of the $62 billion 7-yr Treasury note auction, which saw okay demand. The 10-yr yield increased five basis points to 1.62%, while the 2-yr yield was unchanged at 0.17%. The U.S. Dollar Index increased 0.1% to 90.89.
Reviewing Tuesday's economic data:
The Conference Board's Consumer Confidence Index jumped to 121.7 in April (Briefing.com consensus 113.5) from a downwardly revised 109.0 (from 109.7) in March. The April reading is the highest since February 2020.
The key takeaway from the report is that it reflects a clear improvement in attitudes about current conditions, which have been fueled by increased vaccination rates, the receipt of stimulus checks, and reopening activity that is leading to increased hiring activity.
The S&P Case-Shiller Home Price Index increased 11.9% yr/yr in February (Briefing.com consensus 11.8%) following an upwardly revised 12.1% increase in January (from 11.1%).
The FHFA Housing Price Index increased 0.9% m/m in February.
Looking ahead, investors will receive the FOMC Rate Decision, the weekly MBA Mortgage Applications Index, and Advance Wholesale Inventories, International Trade in Goods, and Retail Inventories for March on Wednesday.
Russell 2000 +16.5% YTD
S&P 500 +11.5% YTD
Dow Jones Industrial Average +11.0% YTD
Nasdaq Composite +9.3% YTD
WTI crude futures settle higher, boost energy stocks
27-Apr-21 15:25 ET
Dow +36.97 at 34018.54, Nasdaq -41.88 at 14096.92, S&P +2.51 at 4190.13
[BRIEFING.COM] The S&P 500 is up 0.1% and could close at another record high.
One last look at the S&P 500 sectors shows energy (+1.3%), industrials (+1.0%), and financials (+0.8%) firmly in the lead amid higher oil prices, curve-steepening activity, and an 11% gain in UPS (UPS 195.37, +19.56, +11.1%) following its earnings report.
The utilities (-0.6%), communication services (-0.4%), and information technology (-0.3%) sectors underperform with modest losses.
WTI crude futures settled higher by 1.6%, or $0.99, to $62.95/bbl.
Stock Market Update
https://www.briefing.com/stock-market-update
Market Snapshot
Dow 33981.57 -61.92 (-0.18%)
Nasdaq 14138.80 +121.97 (0.87%)
SP 500 4187.62 +7.45 (0.18%)
10-yr Note -22/32 1.570
NYSE Adv 2044 Dec 1230 Vol 813.4 mln
Nasdaq Adv 2823 Dec 1368 Vol 4.4 bln
Industry Watch
Strong: Financials, Industrials, Energy, Materials, Consumer Discretionary
Weak: Health Care, Utilities, Consumer Staples
Moving the Market
-- Tight-ranged session ahead of busy week of events
-- Cautiously optimistic
-- Mixed sector performances
S&P 500 and Nasdaq set new highs in front of busy news week
26-Apr-21 16:15 ET
Dow -61.92 at 33981.57, Nasdaq +121.97 at 14138.80, S&P +7.45 at 4187.62
[BRIEFING.COM] The S&P 500 (+0.2%) eked out an intraday record high on Monday, as investors appeared cautiously optimistic for this week's big slate of events. The Nasdaq Composite (+0.9%) and Russell 2000 (+1.2%) outperformed, with the Nasdaq closing at a record high, while the Dow Jones Industrial Average decreased 0.2%.
Advancing issues had a clear advantage over declining issues at the NYSE and Nasdaq, but the gains were relatively modest at the large-cap level as no sector in the S&P 500 advanced more than 1.0%. The biggest gains were scored in the small-cap, micro-cap, and cryptocurrency spheres, signaling enhanced retail sentiment.
Within the S&P 500, the consumer discretionary (+0.6%), information technology (+0.6%), and energy (+0.6%) sectors were the top performers. The consumer staples (-1.2%), utilities (-0.6%), health care (-0.4%), and industrials (-0.3%) sectors lagged in negative territory.
Amazon (AMZN 3409.00, +69.12, +2.0%) was an influential gainer in the Nasdaq, and consumer discretionary sector, amid speculation that the company could announce a stock split when it reports earnings on Thursday. Shares of Tesla (TSLA 738.20, +8.80, +1.2%) rose modestly ahead of its earnings report after today's close.
Aside from the biggest week in earnings this season, the market has GDP/inflation data, the Fed's policy meeting, and President Biden's congressional speech on its calendar. The president is expected to outline his "American Families Plan" on Wednesday.
In the Treasury market, the 10-yr yield settled unchanged at 1.57% after touching 1.60% in the morning. Buying interest increased after the release of the durable goods orders report, which showed a smaller-than-expected 0.5% m/m increase in total orders for March (Briefing.com consensus +2.0%).
The 2-yr yield increased two basis points to 0.17%. The U.S. Dollar Index was little changed at 90.82. WTI crude futures increased 0.3%, or $0.19, to $61.96/bbl.
Reviewing Monday's economic data:
Total durable goods orders rose 0.5% month-over-month in March (Briefing.com consensus 2.0%) following an upwardly revised 0.9% decline (from -1.1%) in February. Orders, excluding transportation, jumped 1.6%, in-line with the Briefing.com consensus estimate, after declining an upwardly revised 0.3% (from -0.9%) in February.
The key takeaway from the report is that business spending bounced back after the February downturn. That was seen in the 0.9% increase in nondefense capital goods orders, excluding aircraft.
Looking ahead, investors will receive the Conference Board's Consumer Confidence Index for April, the FHFA Housing Price Index for February, and the S&P Case-Shiller Home Price Index for February on Tuesday.
Russell 2000 +16.4% YTD
S&P 500 +11.5% YTD
Dow Jones Industrial Average +11.0% YTD
Nasdaq Composite +9.7% YTD
Energy stocks outperforming despite lower oil prices
26-Apr-21 15:25 ET
Dow -10.20 at 34033.29, Nasdaq +133.29 at 14150.12, S&P +12.78 at 4192.95
[BRIEFING.COM] The S&P 500 continues to trade higher by 0.3% and is vying for intraday and closing record highs.
One last look at the sector performances shows consumer staples (-1.1%) as the only sector up or down more than 1.0%. The energy (+0.9%), consumer discretionary (+0.7%), and information technology (+0.6%) sectors outperform with modest gains.
WTI crude futures settled lower by 0.3%, or $0.19, to $61.96/bbl.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 34043.49 +227.59 (0.67%)
Nasdaq 14016.83 +198.40 (1.44%)
SP 500 4180.17 +45.19 (1.09%)
10-yr Note -2/32 1.567
NYSE Adv 2532 Dec 714 Vol 778.4 mln
Nasdaq Adv 3077 Dec 1079 Vol 4.3 bln
Industry Watch
Strong: Information Technology, Materials, Financials
Weak: Consumer Staples, Utilities
Moving the Market
-- Investors play down tax concerns and buy the dip
-- New home sales surge in March
-- Disappointing earnings reactions in Intel (INTC), Honeywell (HON), and American Express (AXP) contributed to relative underperformance of Dow
Investors play down tax concerns and buy the dip
23-Apr-21 16:20 ET
Dow +227.59 at 34043.49, Nasdaq +198.40 at 14016.83, S&P +45.19 at 4180.17
[BRIEFING.COM] The S&P 500 advanced 1.1% on Friday, recouping all of yesterday's tax-related decline, as investors bought the dip in most sectors of the market. The Nasdaq Composite (+1.4%) and Russell 2000 (+1.8%) outpaced the benchmark index while the Dow Jones Industrial Average trailed with a 0.7% gain.
The session started on a cautious note, as investors continued to contemplate reports that President Biden will propose increasing the capital gains tax rate for the wealthy. Talking points were more optimistic today, comprising of speculation that negotiations could reduce the rate, strategies to work around the taxes, and observations about the market's historical ability to weather tax increases.
The calmer demeanor lent itself to a familiar buy-the-dip mindset, further supported by data showing new home sales surge 20.7% month-over-month in March to a seasonally adjusted annual rate of 1.021 million (Briefing.com consensus 912,000). This was the highest annual rate of sales since August 2006.
Gains were spread across nine of the 11 S&P 500 sectors in a steady advance led by the financials (+1.9%), materials (+1.7%), and information technology (+1.4%) sectors. The resilient nature of the market presumably rekindled a fear of missing out on further gains and possibly short-covering activity.
There was a slight hiccup in the last 25 minutes of action, though, that pushed the consumer staples (-0.2%) and utilities (-0.2%) in the red on a closing basis.
Shares of Intel (INTC 59.24, -3.33, -5.3%), Honeywell (HON 224.51, -4.75, -2.1%), and American Express (AXP 144.30, -2.86, -1.9%) struggled in negative territory following their earnings reports, contributing to the relative underperformance of the Dow. Each of these companies topped EPS estimates, but INTC issued downside Q2 guidance and AXP missed revenue estimates.
U.S. Treasuries traded little changed for the third straight day despite the strong new home sales report. The 2-yr yield increased one basis point to 0.15%, and the 10-yr yield increased one basis point to 1.57%. The U.S. Dollar Index declined 0.6% to 90.82.
WTI crude futures settled higher by 1.1%, or $0.70, to $62.15/bbl. On a related note, California Governor Newsome announced that the state will stop issuing new fracking permits by 2024.
Reviewing Friday's economic data:
New home sales surged 20.7% month-over-month in March to a seasonally adjusted annual rate of 1.021 million (Briefing.com consensus 912,000) from an upwardly revised 846,000 (from 775,000) in February. March marked the highest annual rate for new home sales since August 2006. On a yr/yr basis, new home sales were up a whopping 66.8%, having lapped a very depressed comparison period due to the pandemic.
The key takeaway from the report is that new home sales, which are counted when contracts are signed, rebounded sharply from the deep freeze experienced in the Midwest and South during February; however, the sizable drop in new home sales month-over-month in the West (-30.0%), and the higher proportion of new homes sold for $399,999 or less, also speaks to the increased affordability pressures being applied by high prices and rising mortgage rates.
The preliminary IHS Markit Manufacturing PMI for April increased to 60.6 from 59.1 in March. The preliminary IHS Markit Services PMI for April increased to 63.1 from 60.4 in March.
Looking ahead, investors will receive Durable Goods Orders for March on Monday.
Russell 2000 +15.0% YTD
S&P 500 +11.3% YTD
Dow Jones Industrial Average +11.2% YTD
Nasdaq Composite +8.8% YTD
WTI crude futures settle higher
23-Apr-21 15:30 ET
Dow +300.92 at 34116.82, Nasdaq +232.99 at 14051.42, S&P +54.62 at 4189.60
[BRIEFING.COM] The S&P 500 is up 0.3% and is now positive for the week, putting it on track for five straight weekly gains.
One last look at the sector standings shows financials (+2.1%) and materials (+1.9%) leading the advance with 2% gains, while the utilities sector (-0.1%) is the only sector trading in negative territory right now.
WTI crude futures settled higher by 1.1%, or $0.70, to $62.15/bbl. On a related note, California Governor Newsom announced plans to ban fracking by 2024.
Market Snapshot
https://www.briefing.com/stock-market-update
Dow 33815.90 -321.41 (-0.94%)
Nasdaq 13818.43 -131.81 (-0.94%)
SP 500 4134.98 -38.44 (-0.92%)
10-yr Note +1/32 1.556
NYSE Adv 1276 Dec 1971 Vol 866.1 mln
Nasdaq Adv 2010 Dec 2052 Vol 4.4 bln
Industry Watch
Strong: Real Estate
Weak: Information Technology, Consumer Discretionary, Materials, Energy, Financials
Moving the Market
-- Reports indicated that President Biden will propose increasing the capital gains tax rate to as high as 43.4% on Americans earning more than $1 million
-- Convenient excuse to do some selling
-- Q1 earnings generally exceeded expectations, weekly jobless claims declined to post-pandemic low
Market runs into tax trouble
22-Apr-21 16:20 ET
Dow -321.41 at 33815.90, Nasdaq -131.81 at 13818.43, S&P -38.44 at 4134.98
[BRIEFING.COM] The S&P 500 declined 0.9% on Thursday, ostensibly due to reports that President Biden will propose increasing the capital gains tax rate for wealthy Americans. The Nasdaq Composite (-0.9%) and Dow Jones Industrial Average (-0.9%) declined in-line with the benchmark index. The Russell 2000 declined just 0.3%.
Specifically, the S&P 500 went from a 0.2% gain to a 1.2% decline in about an hour after Bloomberg reported that the tax plan would boost the capital gains rate to 39.6% from 20.0% for those earning $1 million or more. The rate would be bumped to 43.4% when including the 3.8% tax on investment income that funds the Affordable Care Act. It would be even higher when including state taxes.
It was interesting to see a visceral reaction in the market considering The New York Times published a similar report earlier in the day and that the president campaigned on raising taxes on the wealthy. The one caveat, to be fair, was that the Bloomberg report indicated the ACA-tax would remain in place while the NYT report did not make that clear.
Nevertheless, the tax news was viewed as a convenient excuse to take profits from a market that had been resilient to selling pressure. Every sector in the S&P 500 closed in negative territory, led lower by the materials (-1.8%), energy (-1.4%), information technology (-1.2%), and consumer discretionary (-1.2%) sectors with losses over 1.0%.
Earnings reports continued to come in mostly better than expected, but many stocks had disappointing reactions, including Lam Research (LRCX 614.54, -26.71, -4.2%) and Dow Inc. (DOW 60.93, -3.89, -6.0%). Union Pacific (UNP 217.98, -5.45, -2.4%) had an appropriate reaction after missing top and bottom-line estimates.
AT&T (T 31.36, +1.25, +4.2%) and Equifax (EFX 221.41, +28.78, +14.9%), on the other hand, were some of the more notable earnings winners, with EFX rising 15%.
In other developments, weekly initial claims fell to a new post-pandemic low at 547,000 (Briefing.com consensus 600,000), existing home sales decreased 3.7% m/m in March to a seasonally adjusted annual rate of 6.01 million (Briefing.com consensus 6.15 million) amid historically low supply, and the ECB kept interest rates/asset purchases unchanged.
U.S. Treasuries finished little changed in a relatively muted session. The 2-yr yield was unchanged at 0.14%, and the 10-yr yield decreased one basis point to 1.55%. The U.S. Dollar Index increased 0.1% to 91.26. WTI crude futures increased 0.2%, or $0.10, to $61.45/bbl.
Reviewing Thursday's economic data:
Initial jobless claims for the week ending April 17 decreased by 39,000 to 547,000 (Briefing.com consensus 600,000). That is the lowest initial claims have been since the week of March 14, 2020. Continuing claims for the week ending April 10 decreased by 34,000 to 3.674 million. That is the lowest continuing claims have been since the week of March 21, 2020.
The key takeaway from the report is that the absolute level of claims is still high, yet there are clear signs of relative improvement that continue to support favorable recovery-minded views for the labor market and the economy.
Existing home sales decreased 3.7% m/m in March to a seasonally adjusted annual rate of 6.01 million (Briefing.com consensus 6.15 million) from an upwardly revised 6.24 million (from 6.22 million) in February. Total sales in March were up 12.3% from a year ago.
The key takeaway from the report is the same as last month: 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 along with rising mortgage rates.
The Conference Board's Leading Economic Index (LEI) increased 1.3% m/m in March (Briefing.com consensus 0.6%) following a downwardly revised 0.1% decline (from +0.2%) in February. That revision marked the end of a string of nine consecutive months of increases for the LEI.
The key takeaway from the report is the recognition that all ten components made positive contributions, which is a testament to the recovery/reopening momentum that is being aided by increasing vaccine adoption rates.
Looking ahead, investors will receive New Home Sales for March and the preliminary IHS Markit Manufacturing and Services PMIs for April on Friday.
Russell 2000 +13.1% YTD
Dow Jones Industrial Average +10.5% YTD
S&P 500 +10.1% YTD
Nasdaq Composite +7.2% YTD
Crude futures settle higher despite market weakness
22-Apr-21 15:25 ET
Dow -359.60 at 33777.71, Nasdaq -150.14 at 13800.10, S&P -42.78 at 4130.64
[BRIEFING.COM] The S&P 500 is down 1.0%, while the Russell 2000 trades higher by 0.1%.
One last look at the sector standings shows red across the board. The heavily-weighted information technology (-1.3%) and consumer discretionary (-1.3%) sectors are among the weakest performers with 1.3% declines. The Philadelphia Semiconductor Index is down 2.4%. The real estate sector is down just 0.3%.
WTI crude futures settled higher by 0.2%, or $0.10, to $61.45/bbl.
Stock Market Update
https://www.briefing.com/stock-market-update
Market Snapshot
Dow 34137.31 +316.01 (0.93%)
Nasdaq 13950.24 +163.95 (1.19%)
SP 500 4173.42 +38.48 (0.93%)
10-yr Note 0/32 1.560
NYSE Adv 2569 Dec 717 Vol 826.3 bln
Nasdaq Adv 3246 Dec 927 Vol 3.9 bln
Industry Watch
Strong: Materials, Energy, Industrials, Financials, Consumer Discretionary
Weak: Communication Services, Utilities
Moving the Market
-- Market bounces back as buying interest spreads to most sectors on no specific catalyst
-- Netflix (NFLX) fell 7% after missing subscriber estimates and issuing disappointing Q2 guidance
Market bounces back
21-Apr-21 16:20 ET
Dow +316.01 at 34137.31, Nasdaq +163.95 at 13950.24, S&P +38.48 at 4173.42
[BRIEFING.COM] The S&P 500 increased 0.9% on Wednesday, bouncing back from back-to-back declines amid renewed buying interest. The Nasdaq Composite (+1.2%) and Dow Jones Industrial Average (+0.9%) posted similar gains. The small-cap Russell 2000 outperformed the large-cap indices with a 2.4% gain.
The advance was relatively broad-based with nine of the 11 S&P 500 sectors closing higher and advancing issues outpacing declining issues by more than a 3:1 margin at the NYSE and Nasdaq. Seven sectors rose more than 1.0%, including materials (+1.9%) and energy (+1.5%) atop the standings.
The communication services (-0.3%) and utilities (-0.9%) sectors were the only sectors that closed lower, largely due to losses in Netflix (NFLX 508.90, -40.67, -7.4%), Verizon (VZ 58.14, -0.24, -0.4%), and NextEra (NEE 77.97, -2.56, -3.2%) following their earnings reports. NFLX fell 7.4% after missing subscriber estimates and issuing disappointing Q2 guidance.
CSX (CSX 102.69, +4.24, +4.3%) was the earnings standout, driving the advance in the Dow Jones Transportation Average (+1.0%).
Earnings news was a big talking point today given the lack of new macro developments, but it'd be self-serving to attribute the generally positive reports to the broader advance. That's based off an observation that the market declined for two straight days this week when most reports exceeded expectations.
Instead, the price action in the market was consistent with consolidation activity: two down days followed by an up day. In other words, no progress. Granted, there was a noticeable uptick in the market within the last hour of the session, possibly due to investors not wanting to get left behind if the consolidation phase is over.
U.S. Treasuries finished little changed in a tight-ranged session that included a decent $24 billion 20-yr bond auction. The 2-yr yield decreased one basis point to 0.14%, and the 10-yr yield was unchanged at 1.56%. The U.S. Dollar Index decreased 0.1% to 91.13. WTI crude futures declined 2.0%, or $1.26, to $61.35/bbl.
Wednesday's economic data was sparse. The weekly MBA Mortgage Applications Index increased 8.6% following a 3.7% decline in the prior week. Looking ahead, investors will receive the weekly Initial and Continuing Claims report, Existing Home Sales for March, and the Conference Board's Leading Economic Index for March on Thursday.
Russell 2000 +13.4% YTD
Dow Jones Industrial Average +11.5% YTD
S&P 500 +11.1% YTD
Nasdaq Composite +8.2% YTD
Energy stocks among today's leaders despite weaker oil prices
21-Apr-21 15:30 ET
Dow +266.06 at 34087.36, Nasdaq +115.46 at 13901.75, S&P +29.48 at 4164.42
[BRIEFING.COM] The S&P 500 is up 0.7% and is trading at session highs.
One last look at the sector performances shows materials (+1.8%), industrials (+1.3%), financials (+1.2%), energy (+1.3%), and health care (+1.1%) up more than 1.0%. The communication services (-0.7%) and utilities (-0.8%) sectors remain the only sectors in the S&P 500 trading lower.
WTI crude futures settled lower by 2.0%, or $1.26, to $61.35/bbl, although this hasn't stopped the energy sector from participating in today's advance.
Stock Market Update
https://www.briefing.com/stock-market-update
Market Snapshot
Dow 33821.30 -256.33 (-0.75%)
Nasdaq 13786.29 -128.50 (-0.92%)
SP 500 4134.94 -28.32 (-0.68%)
10-yr Note +1/32 1.588
NYSE Adv 863 Dec 2394 Vol 878.8 mln
Nasdaq Adv 990 Dec 3044 Vol 4.2 bln
Industry Watch
Strong: Health Care, Real Estate, Utilities, Consumer Staples
Weak: Financials, Energy, Consumer Discretionary, Industrials
Moving the Market
-- Market registers back-to-back losses, representing consolidation activity
-- Weakness in cyclical sectors; strength in defensive-oriented sectors
-- Better-than-expected earnings reports
Back-to-back losses
20-Apr-21 16:20 ET
Dow -256.33 at 33821.30, Nasdaq -128.50 at 13786.29, S&P -28.32 at 4134.94
[BRIEFING.COM] The S&P 500 declined 0.7% on Tuesday for its second straight decline, as it continued to consolidate its record-setting run. The Dow Jones Industrial Average (-0.8%) and Nasdaq Composite (-0.9%) performed similarly to the benchmark index, while the Russell 2000 struggled with a 2.0% decline.
Like yesterday, there was no specific selling catalyst, but the breadth and scope of the losses were greater today. Declining issues outpaced advancing issues by a 3:1 margin at the NYSE and Nasdaq. The cyclical energy (-2.7%), financials (-1.8%), and consumer discretionary (-1.2%) sectors underperformed with sharp losses.
Analyst commentary rehashed on how overstretched the S&P 500 had gotten, with roughly 95% of its components trading above their 200-day moving average, and how bullish investor sentiment had gotten over the past month. Despite the potential for further weakness, the market closed off session lows amid a late effort to buy the dip.
Throughout the day, some investors preferred to lean more defensively instead of de-risking. The defensive-oriented utilities (+1.3%), real estate (+1.1%), consumer staples (+0.6%), and health care (+0.4%) sectors finished in positive territory.
The consumer staples and health care sectors received earnings-driven support from Johnson & Johnson (JNJ 166.48, +3.79, +2.3%), Procter & Gamble (PG 137.75, +1.14, +0.8%), and Philip Morris International (PM 94.00, +2.33, +2.5%). JNJ also said it will resume its vaccine roll-out in Europe after the EMA supported its benefit-risk profile.
IBM (IBM 138.16, +5.04, +3.8%) and Travelers (TRV 155.73, +1.35, +0.9%) were other earnings-related gainers, even though TRV missed EPS estimates. United Airlines (UAL 50.30, -4.69, -8.5%) fell 8.5% after missing top and bottom-line estimates and possibly due to news that the U.S. State Department will increase its "Do Not Travel" advisory to roughly 80% of countries outside the U.S.
In other corporate news, Apple (AAPL 133.11, -1.73, -1.3%) introduced new iMacs, a new podcast subscription service, a Bluetooth tracking product, and a new Apple TV 4K. Microsoft (MSFT 258.26, -0.48, -0.2%) reportedly ended deal talks with Discord. Kansas City Southern (KSU 295.50, +39.10, +15.3%) received an 18% premium counteroffer from Canadian National Railway (CNI 110.15, -7.98, -6.8%).
U.S. Treasuries edged higher amid the negative bias in the broader equity market, pushing yields lower. The 2-yr yield decreased one basis point to 0.15%. The 10-yr yield decreased four basis points to 1.56%. The U.S. Dollar Index increased 0.2% to 91.24. WTI crude futures declined 1.2%, or $0.74, to $62.61/bbl.
Investors did not receive any economic data on Tuesday, and Wednesday's economic data will be limited to the weekly MBA Mortgage Applications Index and the weekly EIA crude inventory report.
Russell 2000 +10.8% YTD
Dow Jones Industrial Average +10.5% YTD
S&P 500 +10.1% YTD
Nasdaq Composite +7.0% YTD
Crude futures settle lower amid equity weakness
20-Apr-21 15:25 ET
Dow -292.36 at 33785.27, Nasdaq -152.11 at 13762.68, S&P -32.54 at 4130.72
[BRIEFING.COM] The S&P 500 is down 0.8% after retesting its session low about 25 minutes ago. The ability to hold the low has been seen as an encouraging short-term sign.
One last look at the S&P 500 sectors shows six of the 11 sectors trading lower by at least 1.0%, including a 2.7% decline in the energy sector. Four sectors trade higher, including the utilities (+1.3%) and real estate (+1.0%) sectors with gains of at least 1.0%.
WTI crude futures settled lower by 1.2%, or $0.74, to $62.61/bbl.
Stock Market Update
https://www.briefing.com/stock-market-update
Market Snapshot
Dow 34077.63 -123.04 (-0.36%)
Nasdaq 13914.79 -137.58 (-0.98%)
SP 500 4163.26 -22.21 (-0.53%)
10-yr Note -2/32 1.608
NYSE Adv 1086 Dec 2145 Vol 856.2 mln
Nasdaq Adv 1202 Dec 2886 Vol 4.3 bln
Industry Watch
Strong: Real Estate
Weak: Consumer Discretionary, Information Technology
Moving the Market
-- Stocks take a breather after recent record-setting run
-- Losses were relatively broad-based with growth stocks underperforming
Red day, but it wasn't so bad
19-Apr-21 16:20 ET
Dow -123.04 at 34077.63, Nasdaq -137.58 at 13914.79, S&P -22.21 at 4163.26
[BRIEFING.COM] The S&P 500 declined 0.5% on Monday, putting a pause on the market's record-setting run. The Dow Jones Industrial Average (-0.4%) joined the benchmark index with a modest decline, while the Nasdaq Composite (-1.0%) and Russell 2000 (-1.4%) fell by at least 1.0%.
Losses were spread across ten of the 11 S&P 500 sectors, declining issues easily outpaced advancing issues at the NYSE and Nasdaq, and growth stocks underperformed value stocks. The latter was evident in the sharp declines in the Philadelphia Semiconductor Index (-2.5%) and ARK Innovation ETF (ARKK 120.44, -3.94, -3.2%).
The consumer discretionary sector (-1.1%) was the only S&P 500 sector that fell more than 1.0%, though. On the upside, Apple (AAPL 134.84, +0.68, +0.5%) provided support ahead of its product event on Tuesday, as did the real estate sector (+0.3%) with a small gain.
There was no specific catalyst for the negative bias, but there was an acknowledgement that the market was overheated and primed for some selling given the S&P 500 was up 7.0% over the prior four weeks. This view, in retrospect, might have been augmented by the weekend slide in bitcoin, which had similarly been on a tear.
Tesla (TSLA 714.63, -25.15, -3.4%) and Peloton (PTON 107.75, -8.46, -7.3%) were a pair of notable laggards following some negative press.
Specifically, a Tesla vehicle crashed, killing its two passengers, after the car was allegedly on auto-pilot mode with no driver. In Peloton's case, the Consumer Product Safety Commission issued a warning about the company's Tread+ product due to several incidents involving children, including one death.
In more positive corporate news, Q1 earnings reports continued to beat elevated expectations. Dow component Coca-Cola (KO 54.00, +0.32, +0.6%) warrants a mention, but it was Harley-Davidson (HOG 44.29, +3.91, +9.7%) that really pleased investors based off its 9.7% gain.
Elsewhere, the 10-yr yield increased three basis points to 1.60%, which some blamed for the relative weakness in the Nasdaq and growth stocks. The 2-yr yield was unchanged at 0.16%. The U.S. Dollar Index fell 0.5% to 91.10. WTI crude futures increased 0.3%, or $0.19, to $63.35/bbl.
Investors did not receive any economic data and will not receive any on Tuesday, either.
Russell 2000 +13.0% YTD
Dow Jones Industrial Average +11.3% YTD
S&P 500 +10.8% YTD
Nasdaq Composite +8.0% YTD
WTI crude futures settle in the green
19-Apr-21 15:30 ET
Dow -166.86 at 34033.81, Nasdaq -165.65 at 13886.72, S&P -29.37 at 4156.10
[BRIEFING.COM] The S&P 500 continues to struggle with a 0.7% decline amid a lack of a buy-the-dip mindset.
One last look at the S&P 500 sectors shows information technology (-1.1%) and consumer discretionary (-1.2%) leading the decline with losses over 1.0%, while the real estate sector (+0.03%) is the only sector clinging onto a gain.
WTI crude futures settled higher by 0.3%, or $0.19, to $63.35/bbl. On a related note, a report from CNBC indicated that Fundstrat's Tom Lee said he thinks the Energy Select Sector SPDR Fund (XLE 48.17, -0.23, -0.5%) could have another 45% upside if oil hits $80.00 per barrel.
Stock Market Update
https://www.briefing.com/stock-market-update
Market Snapshot
Dow 34200.67 +164.68 (0.48%)
Nasdaq 14052.37 +13.58 (0.10%)
SP 500 4185.47 +15.05 (0.36%)
10-yr Note 0/32 1.582
NYSE Adv 1824 Dec 1422 Vol 1.2 bln
Nasdaq Adv 1883 Dec 2220 Vol 4.4 bln
Industry Watch
Strong: Materials, Utilities, Health Care
Weak: Information Technology, Energy
Moving the Market
-- S&P 500 and Dow close at record highs in mechanical grind higher to end the week
-- Better-than-expected housing starts and building permits data for March
-- Market respects bullish trend
Market respects the bullish trend
16-Apr-21 16:15 ET
Dow +164.68 at 34200.67, Nasdaq +13.58 at 14052.37, S&P +15.05 at 4185.47
[BRIEFING.COM] The S&P 500 (+0.4%) and Dow Jones Industrial Average (+0.5%) set intraday and closing record highs on Friday in a mechanical grind higher to end the week. The Nasdaq Composite (+0.1%) and Russell 2000 (+0.3%) posted smaller gains.
There's a saying on Wall Street that loosely goes, "the trend is your friend until the end." Well, the trend in the S&P 500 has been extremely bullish over the past three weeks, and despite an absence of strong buying conviction today, the market found a way to respect the trend.
Nine of the 11 S&P 500 sectors contributed the advance, including the lightly-weighted materials sector (+1.2%) as the only sector to gain more than 1.0%. Value stocks outpaced growth stocks, evidenced by the 0.6% gain in the iShares S&P 500 Value ETF (IVE 145.60, +0.82), versus the 0.2% gain in the iShares S&P 500 Growth ETF (IVW 69.98, +0.16).
The SPDR S&P Homebuilders ETF (XHB 75.11, +1.59, +2.2%) was a pocket of strength, rising 2% to all-time highs, following the better-than-expected housing starts and building permits report for March, which showcased a 30.8% m/m surge in multi-unit starts.
On the downside, the information technology sector (-0.03%), which is the most heavily-weighed sector in the S&P 500, limited the index performance with a fractional decline amid a rebound in long-term interest rates. The energy sector (-0.9%) was the weakest performer amid lower oil prices ($63.16, -0.28, -0.4%).
The 10-yr yield increased four basis points to 1.57% after dropping 11 basis points on Thursday. The rebound appeared to be technically-oriented since the Treasury market barely reacted to the encouraging housing data. The 2-yr yield increased two basis points to 0.16%. The U.S. Dollar Index decreased 0.2% to 91.54.
This curve-steepening activity provided support for the financials sector (+0.7%), which included disappointing reactions to better-than-expected earnings reports from Morgan Stanley (MS 78.59, -2.23, -2.8%), BNY Mellon (BK 46.07, -1.94, -4.0%), and State Street (STT 80.47, -6.04, -7.0%).
In other corporate news, Cisco (CSCO 52.80, +1.16, +2.3%) was upgraded to Outperform from Peer Perform at Wolfe Research. Boeing (BA 148.18, -2.93, -1.2%) struggled after Reuters reported that aircraft inspectors found wider electrical issues with the 737 MAX than originally suspected.
Reviewing Friday's economic data:
Housing starts surged 19.4% month-over-month in March to a seasonally adjusted annual rate of 1.739 million units (Briefing.com consensus 1.621 million), bolstered by a 15.3% increase in single-family starts. Building permits increased 2.7% month-over-month to 1.766 million (Briefing.com consensus 1.750 million), helped by a 4.6% increase in single-family permits.
The key takeaway from the report is that it reflects a quick snapback from the weather-induced downturn in February, which is indicative of otherwise strong industry conditions that are being driven by strong demand for new homes.
The preliminary reading for the University of Michigan Consumer Sentiment Index for April checked in at 86.5 (Briefing.com consensus 88.0), up from the final reading of 84.9 for March. This is the highest reading in a year and was paced by improved attitudes on current conditions that were helped by job gains, rising vaccination rates, low interest rates, and fiscal stimulus.
The key takeaway from the report is the disclosure that year-ahead inflation expectations of 3.7% are the highest they have been in nearly a decade; however, inflation expectations over the next five years were lower at 2.7%.
Looking ahead, there is no economic data of note on the calendar until Wednesday.
Russell 2000 +14.6% YTD
Dow Jones Industrial Average +11.7% YTD
S&P 500 +11.4% YTD
Nasdaq Composite +9.0% YTD
WTI crude futures settle slightly lower
16-Apr-21 15:30 ET
Dow +172.28 at 34208.27, Nasdaq +11.67 at 14050.46, S&P +15.93 at 4186.35
[BRIEFING.COM] The S&P 500 is up 0.4% and on track to close at another record high. The same goes for the Dow (+0.5%) and Nasdaq 100 (+0.1%).
One last look at the S&P 500 sectors shows nine sectors trading higher and two trading lower. The materials (+1.3%) and utilities (+1.0%) sectors are up by at least 1.0%, while the information technology (-0.1%) and energy (-0.7%) sectors trade lower.
WTI crude futures settled lower by 0.4%, or $0.28, to $63.16/bbl.
Stock Market Update
https://www.briefing.com/stock-market-update
Market Snapshot
Dow 34035.85 +304.96 (0.90%)
Nasdaq 14038.79 +180.92 (1.31%)
SP 500 4170.45 +45.79 (1.11%)
10-yr Note +30/32 1.546
NYSE Adv 2051 Dec 1164 Vol 849.0 mln
Nasdaq Adv 2037 Dec 2036 Vol 4.3 bln
Industry Watch
Strong: Information Technology, Health Care, Communication Services
Weak: Energy, Financials
Moving the Market
-- S&P 500 and Dow set all-time highs in continuation of bullish trend
-- Strong retail sales data for March, weekly initial claims drop below 600,000 for its lowest level since the pandemic began
-- Long-term interest rates drop noticeably despite the economic data
Bull market keys off economic data, lower rates
15-Apr-21 16:15 ET
Dow +304.96 at 34035.85, Nasdaq +180.92 at 14038.79, S&P +45.79 at 4170.45
[BRIEFING.COM] The S&P 500 (+1.1%), Dow Jones Industrial Average (+0.9%), and Nasdaq 100 (+1.6%) set intraday and closing record highs on Thursday, as the 10-yr yield dropped 11 basis points to 1.53% despite a batch of better-than-expected economic data. The Nasdaq Composite rose 1.3%. The Russell 2000 increased just 0.4%.
Prior to the open, retail sales soared 9.8% m/m in March (Briefing.com consensus +5.3%), weekly initial claims dropped by 193,000 to 576,000 (Briefing.com consensus 695,000), the Philadelphia Fed Index for April checked in at 50.2 (Briefing.com consensus 35.0), and the Empire State Manufacturing Survey for April checked in at 26.3 (Briefing.com consensus 23.0).
Granted, the futures market had already established a positive bias even before the data was released, partially due to a prevailing bullish sentiment and better-than-expected earnings reports. The data strengthened the cause, but more notably, buying interest accelerated in the Treasury market, driving longer-dated yields sharply lower.
Longer-dated yields typically move higher when investors feel better about the economic outlook, or expect an increase in inflation, but today they continued their monthly downtrend despite the data supporting the growth outlook. The nosedive in long-term rates suggested short-covering activity was a contributing factor.
As expected, the mega-cap/growth/technology stocks benefited from the lower rates, but the gains were relatively broad with nine of the 11 S&P 500 sectors closing in positive territory. The information technology (+1.8%), health care (+1.7%), and real estate (+2.0%) sectors rose more than 1.5%. The energy (-0.9%) and financials (-0.1%) sectors closed lower.
UnitedHealth (UNH 390.01, +14.38, +3.8%) was a major contributor in the health care sector after beating top and bottom-line estimates and raising its FY21 EPS guidance. The financials sector featured better-than-expected earnings reports from Bank of America (BAC 38.74, -1.14, -2.9%) and Citigroup (C 72.53, -0.38, -0.5%).
The inability of the financials sector to rally around earnings news was largely due to the curve-flattening activity in the Treasury market. BlackRock (BLK 817.84, +16.77, +2.1%) provided offsetting support, though, after reporting that assets under management rose 39% yr/yr to $9 trillion. BLK also beat revenue estimates.
The 2-yr yield decreased one basis point to 0.14%. The U.S. Dollar Index decreased 0.1% to 91.62. WTI crude futures increased 0.4%, or $0.28, to $63.44/bbl.
Reviewing Thursday's huge batch of economic data:
March retail sales soared 9.8% m/m (Briefing.com consensus 5.3%) following an upwardly revised 2.7% decline (from -3.0%) in February. Excluding autos, they were up 8.4% m/m (Briefing.com consensus 4.9%) following an upwardly revised 2.5% decline (from -2.7%) in February.
The key takeaway from the report is that there was a clear rebound from some of the "frozen" activity in February, the arrival of stimulus checks, and pent-up demand that was plain to see in double-digit percentage gains across various discretionary spending categories like food services and drinking places (+13.4%).
Initial jobless claims for the week ending April 10 declined by 193,000 to 576,000 (Briefing.com consensus 695,000). Continuing claims for the week ending April 3 increased 4,000 to 3.731 million.
The key takeaway from the report is that initial claims were the lowest they have been since the pandemic started; moreover, they finally dropped in a material manner that is consistent with the reopening (and rehiring) narrative feeding expectations of strong economic growth.
Total industrial production increased 1.4% m/m in March (Briefing.com consensus 2.9%) following a downwardly revised 2.6% decline (from -2.2%) in February. The capacity utilization rate increased to 74.4% (Briefing.com consensus 75.9%) from a downwardly revised 73.4% (from 73.8%) in February.
The key takeaway from the report is that it suggests the downturn in February was primarily a weather-driven downturn, although March could have been a bit stronger for industrial production if not for the ongoing shortage of semiconductors that continued to hold down vehicle production.
The Philadelphia Fed Index increased to 50.2 in April (Briefing.com consensus 35.0) from a downwardly revised 44.5 (from 51.8) in March.
The Empire State Manufacturing Survey increased to 26.3 in April (Briefing.com consensus 23.0) from 17.4 in March.
The NAHB Housing Market Index increased to 83.0 in April (Briefing.com consensus 84.0) from 82.0 in March.
Business inventories increased 0.5% m/m in February, as expected, following an upwardly revised 0.4% increase (from 0.3%) in January.
Looking ahead, investors will receive Housing Starts and Building Permits for March and the preliminary University of Michigan Index of Consumer Sentiment for April on Friday.
Russell 2000 +14.3% YTD
Dow Jones Industrial Average +11.2% YTD
S&P 500 +11.0% YTD
Nasdaq Composite +8.9% YTD
WTI crude futures settle slightly higher
15-Apr-21 15:30 ET
Dow +256.57 at 33987.46, Nasdaq +145.30 at 14003.17, S&P +37.34 at 4162.00
[BRIEFING.COM] The S&P 500 is up 0.9% and well on track to close at another record high. The same goes for the Dow (+0.8%).
One last look at the S&P 500 sector performances shows nine trading higher and two trading lower. The health care (+1.7%), information technology (+1.5%), real estate (+1.5%), and communication services (+1.1%) sectors are in the lead with gains over 1.0%; conversely, the energy (-1.1%) and financials (-0.4%) sectors trade lower.
WTI crude futures settled higher by 0.4%, or $0.28, to $63.44/bbl.
NVIDIA rallying to all-time highs amid analyst upgrade
Market cools down after Coinbase direct listing
14-Apr-21 16:20 ET
Dow +53.62 at 33730.89, Nasdaq -138.26 at 13857.87, S&P -16.93 at 4124.66
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 0.4% on Wednesday, as investors appeared to take profits in the heavily-weighted growth stocks amid the highly-anticipated public debut of Coinbase (COIN 328.28, -52.72, -13.8%). The benchmark index, however, started the day slightly higher in record territory following Q1 earnings reports from several of the big banks.
The Nasdaq Composite underperformed with a 1.0% decline. The Dow Jones Industrial Average (+0.2%) and Russell 2000 (+0.8%), which are more exposed to reopening stocks, outperformed in positive territory but closed off session highs. Like the S&P 500, the Dow set an intraday all-time high.
To start, JPMorgan Chase (JPM 151.21, -2.88, -1.9%), Goldman Sachs (GS 335.35, +7.67, +2.3%), and Wells Fargo (WFC 42.03, +2.24, +5.6%) each beat top and bottom-line estimates and provided encouraging commentary about business/economic conditions. GS and WFC rallied on the news, but JPM went the other way, as some questioned the quality of its EPS beat due to its large release for loan loss reserves.
The overall tone of their reports was well-received by other banks and reopening stocks within the S&P 500 financials (+0.7%), energy (+2.9%), materials (+0.7%), and industrials (+0.1%) sectors. Energy stocks got an added boost from a 5% gain in crude prices ($63.18, +3.00, +5.0%) amid bullish inventory data from the EIA.
While the reopening trade was back on to begin the day, the mega-cap/growth/technology stocks never got going. The information technology (-1.2%), consumer discretionary (-1.2%), and communication services (-0.9%) sectors, where the recently-hot mega-caps reside, were the weakest performers.
Buying interest in growth stocks was lacking prior to the Coinbase open, which was preceded by a lot of excitement from analysts and the media; sellers followed through in response to the disappointing intraday price action in COIN. Coinbase opened at $381/share after earning a reference price of $250, but shares ended the session 14% off the opening price.
The Fed's Beige Book for April, which was released at 2:00 p.m. ET or about 35 minutes after the Coinbase open, was another reported catalyst during the afternoon. Many Districts reported moderate price increases, and some said prices rose more robustly, although any inflation concerns weren't manifested in the Treasury market, which strengthened a bit in response.
The 10-yr yield settled the session two basis points higher at 1.64% after trading slightly higher prior to the Beige Book's release. The 2-yr yield decreased one basis to 0.15%. The U.S. Dollar Index decreased 0.2% to 91.64.
Separately, Fed Chair Powell told the Economic Club of Washington that the Fed is likely to first taper asset purchases after substantial progress on its goals has been reached, then hold its balance sheet constant for a while, and then finally start to gradually raise interest rates -- a similar approach as it did coming out of the financial crisis.
Reviewing Wednesday's economic data:
Import prices increased 1.2% in March while import prices excluding oil increased 0.8%. Export prices increased 2.1% in March while export prices excluding agriculture increased 2.0%.
The MBA Mortgage Applications Index decreased 3.7% following a 5.1% decline in the prior week.
Looking ahead to Thursday, investors will receive the Retail Sales report for March, Industrial Production and Capacity Utilization for March, the weekly Initial and Continuing Claims report, the Philadelphia Fed Index for April, the Empire State Manufacturing Survey for April, the NAHB Housing Market Index for April, Business Inventories for February, and Net Long-Term TIC Flows for February.
Russell 2000 +13.8% YTD
Dow Jones Industrial Average +10.2% YTD
S&P 500 +9.8% YTD
Nasdaq Composite +7.5% YTD
Crude futures rally 5%
14-Apr-21 15:30 ET
Dow +97.74 at 33775.01, Nasdaq -104.37 at 13891.76, S&P -10.87 at 4130.72
[BRIEFING.COM] The S&P 500 is down 0.3%, while the Russell 2000 continues to outperform with a 0.7% gain amid a modest return of the reopening trade.
One last look at the S&P 500 sectors shows energy (+2.6%), financials (+0.7%), materials (+0.7%), and industrials (+0.3%) trading higher, with energy way out in the lead due to the increase in oil prices. The information technology (-0.9%), communication services (-0.8%), and consumer discretionary (-0.9%) sectors, however, are largely responsible for the decline in the S&P 500 right now.
WTI crude futures settled higher by a sharp 5.0%, or $3.00, to $63.18/bbl amid bullish inventory data out of the EIA.
Major indices close slightly lower to begin the week
12-Apr-21 16:20 ET
Dow -55.20 at 33745.40, Nasdaq -50.19 at 13850.03, S&P -0.81 at 4127.99
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 (-0.02%) eked out an intraday record high on Monday, but it closed fractionally lower in a tight-ranged session as investors waited for Q1 earnings and economic data later in the week. The Nasdaq Composite (-0.4%), Dow Jones Industrial Average (-0.2%), and Russell 2000 (-0.4%) joined the benchmark index with modest losses.
Eight of the 11 S&P 500 sectors closed higher, although daily gains were capped at 0.6% (consumer discretionary). The information technology (-0.5%) and communication services (-0.6%) sectors dragged on index performance amid a breather in their heavily-weighted components while the energy sector (-0.9%) was the weakest link.
Generally speaking, investors appeared content in withholding conviction for a batch of key economic reports throughout the week, starting with the Consumer Price Index for March tomorrow, and for earnings reports from some of the leading financial institutions on Wednesday.
Tesla (TSLA 701.98, +24.96, +3.7%) and NVIDIA (NVDA 608.36, +32.36, +5.6%) were some of the more influential gainers today, helping make up for the lackluster price action in the broader market. TSLA was upgraded to Buy from Hold at Canaccord Genuity. NVIDIA raised Q1 revenue guidance above consensus and announced several new product offerings.
Shares of Intel (INTC 65.41, -2.86, -4.2%) and Advanced Micro Devices (AMD 78.58, -4.18, -5.1%) fell noticeably on the increased competition with NVIDIA. The Philadelphia Semiconductor Index declined 1.1%.
In other corporate news, Microsoft (MSFT 255.91, +0.06, unch) agreed to acquire Nuance Communications (NUAN 52.85, +7.27, +16.0%) in a $19.7 billion cash deal. Uber (UBER 59.44, +1.76, +3.1%) reported its highest monthly total company gross bookings in March.
In Fedspeak, Fed Chair Powell said in a 60 Minutes interview that forecasts for U.S. economic growth and jobs growth are looking strong. St. Louis Fed President Bullard told Bloomberg that the central bank will not consider tightening policy until about 75% to 80% of the U.S. population is vaccinated. According to the CDC COVID Data Tracker, about 22% of the U.S. population is fully vaccinated.
Elsewhere, $207 billion in new debt was issued in the Treasury market today, which the market absorbed without too much trouble. The 2-yr yield increased one basis point to 0.16%, and the 10-yr yield increased one basis point to 1.68%. The U.S. Dollar Index was little changed at 92.12. WTI crude futures increased 0.7%, or $0.40, to $59.69/bbl.
Reviewing Monday's economic data:
The Treasury Budget for March showed a $659.6 bln deficit, versus a $119.0 bln deficit in the same period a year ago. The budget data is not seasonally adjusted, so the March deficit can't be compared to the February deficit of $310.9 bln.
The fiscal year-to-date budget deficit is $1.71 trln versus -$743.5 bln for the same period a year ago. The budget deficit over the last 12 months is $4.09 trln versus -$3.55 trln in February.
Looking ahead, investors will receive the Consumer Price Index for March and the NFIB Small Business Optimism Index for March on Tuesday.
Russell 2000 +13.1% YTD
Dow Jones Industrial Average +10.3% YTD
S&P 500 +9.9% YTD
Nasdaq Composite +7.5% YTD
WTI crude futures settle in the green
12-Apr-21 15:25 ET
Dow -88.38 at 33712.22, Nasdaq -61.52 at 13838.70, S&P -5.43 at 4123.37
[BRIEFING.COM] The S&P 500 is down 0.1%, and the Russell 2000 is down 0.6%.
One last look at the S&P 500 sectors shows information technology (-0.5%) and communication services (-0.9%) largely responsible for the negative bias in the benchmark index, while the consumer discretionary (+0.4%) and financials (+0.3%) sectors provide some offsetting support.
WTI crude futures settled higher by 0.7%, or $0.40, to $59.69/bbl.
NVIDIA raises Q1 revenue guidance above consensus
12-Apr-21 15:00 ET
Dow -105.31 at 33695.29, Nasdaq -75.01 at 13825.21, S&P -8.15 at 4120.65
[BRIEFING.COM] The S&P 500 is trading lower by 0.2% and has traded slightly lower for most of the day.
In addition to its new product announcements, NVIDIA (NVDA 610.07, +33.91, +5.9%) raised its Q1 revenue guidance above consensus due to overall demand being very strong. The company said it expects demand to continue to exceed supply for much of this year and will have sufficient supply to support sequential growth beyond Q1.
Looking ahead, Fastenal (FAST 50.44, +0.37, +0.8%) will report earnings prior to the open tomorrow.
S&P 500 and Dow close in record territory
09-Apr-21 16:15 ET
Dow +297.03 at 33800.60, Nasdaq +70.88 at 13900.22, S&P +31.63 at 4128.80
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 (+0.8%) and Dow Jones Industrial Average (+0.9%) set intraday and closing record highs on Friday, with the benchmark index topping the 4100 level for the first time. The Nasdaq Composite (+0.5%) overcame an early decline to close positive. The Russell 2000 (+0.04%) sneaked into the green amid a strong finish in the broader market.
The session started with the market brushing off a hotter-than-expected Producer Price Index report for March, which showed producer prices for final demand increase 1.0% m/m (Briefing.com consensus +0.5%) and 4.2% yr/yr. Despite the potential for a spillover into consumer prices, the market trusted the Fed's thinking it'll be transitory.
The difference makers today came out of the heavily-weighted S&P 500 information technology (+1.0%) and consumer discretionary (+1.2%) sectors, which boasted strong performances from Apple (AAPL 133.00, +2.64, +2.0%) and Amazon (AMZN 3372.20, +72.90, +2.2%) in a continuation of their monthly outperformances.
Buying activity increased noticeably into the close on no confirmed catalyst, with the health care (+1.2%), industrials (+1.0%), and financials (+0.9%) sectors rounding out the top spots. Conversely, the energy (-0.5%), consumer staples (-0.1%), and utilities (-0.1%) sectors closed slightly lower.
The health care sector advanced without the leadership of Johnson & Johnson (JNJ 161.25, -1.72, -1.0%), which lost ground amid concerns surrounding the rollout and safety of its COVID-19 vaccine. Within the industrials sector, Boeing (BA 252.36, -2.59, -1.0%) advised customers to address a potential electrical issue in a specific group of 737 MAX planes prior to further operations.
Separately, the latest Flow Show report from BofA Securities indicated that total global equity inflows over the past five months ($576 billion) has exceeded total inflows for the past 12 years ($425 billion). Some attributed this eye-popping statistic to the muted price action during most of the day, but there still appeared to be an underlying hunger for risk assets.
In the Treasury market, the 10-yr yield settled three basis points higher at 1.67%, or slightly lower than where it was trading immediately before, and after, the PPI data. The 2-yr yield increased one basis point to 0.15%. The U.S. Dollar Index increased 0.1% to 92.17. WTI crude futures decreased 0.5%, or $0.32, to $59.29/bbl.
Reviewing Friday's economic data:
The Producer Price Index for final demand increased 1.0% month-over-month in March (Briefing.com consensus +0.5%). The index for final demand, excluding food and energy, jumped 0.7% m/m (Briefing.com consensus +0.2%. On a year-over-year basis, the index for final demand was up 4.2% (highest since 12 months ending September 2011), versus 2.8% in February. The index for final demand, excluding food and energy, was up 3.1% yr/yr, versus 2.5% in February.
The key takeaway from the report isn't in the headline numbers. They are important, but the key takeaway is the pipeline pressures evident in the index for processed goods for intermediate demand, which increased 4.0% m/m in March (largest jump since August 1974), and in the index for unprocessed goods for intermediate demand, which surged 9.3% m/m (highest since November 2006). Those large increases point to inflation issues that are apt to linger for producers and which could potentially spill over into consumer prices.
Wholesale inventories increased 0.6% m/m in February (Briefing.com consensus 0.5%) following an upwardly revised 1.4% increase (from +1.3%) in January.
Looking ahead, investors will receive the March Treasury Budget on Monday.
Russell 2000 +13.6% YTD
Dow Jones Industrial Average +10.4% YTD
S&P 500 +9.9% YTD
Nasdaq Composite +7.9% YTD
Crude futures settle in negative territory
09-Apr-21 15:30 ET
Dow +200.34 at 33703.91, Nasdaq +24.07 at 13853.41, S&P +18.93 at 4116.10
[BRIEFING.COM] The S&P 500 is seeing an uptick to session highs with a 0.5% gain. Any positive finish would be good for a record close.
One last look at the S&P 500 sectors shows information technology (+0.6%), consumer discretionary (+0.8%), and health care (+0.8%) providing the leadership, while the energy (-0.5%), communication services (-0.2%), consumer staples (-0.2%), and utilities (-0.1%) sectors trade lower.
WTI crude futures settled lower by 0.5%, or $0.32, to $59.29/bbl.
Mega-caps provide heavy lifting in record session for S&P 500
08-Apr-21 16:15 ET
Dow +57.31 at 33503.57, Nasdaq +140.47 at 13829.34, S&P +17.22 at 4097.17
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 increased 0.4% on Thursday, setting intraday and closing record highs in the process amid continued appreciation in the mega-caps and growth stocks. The Nasdaq Composite (+1.0%) and Russell 2000 (+0.9%) outperformed the benchmark index, while the Dow Jones Industrial Average (+0.2%) underperformed.
Apple (AAPL 130.36, +2.46, +1.9%) and Microsoft (MSFT 253.25, +3.35, +1.3%) were some of the more influential gainers today on no specific catalysts, with Apple brushing off a report from the Nikkei that it's delaying MacBook and iPad production due to the global semiconductor shortage.
The S&P 500 information technology sector, where AAPL and MSFT reside, easily topped the sector standings with a 1.4% gain. The consumer discretionary sector (+0.5%) was a distant second, while the lightly-weighted energy (-1.4%) and real estate (-0.6%) sectors underperformed in negative territory.
The lack of market-moving news behind the steady advance in the mega-caps suggested there were several underlying factors: a recognition that long-term interest rates have cooled off this month, money continuing to reshuffle into these Q1 laggards, and investors possibly front running Q1 earnings reports that are expected to be strong.
Elsewhere, Fed Chair Powell spoke about the global economy in an event hosted by the IMF today and rehashed the Fed's dovish policy stance since the economic recovery is still uneven and incomplete. On a related note, weekly initial claims increased by 16,000 to 744,000 (Briefing.com consensus 678,000).
In other corporate news, Visa (V 220.70, +1.43, +0.7%) pared intraday gains after Bloomberg reported that the Department of Justice will investigate the company's incentives that it provides banks as part of its antitrust probe. Constellation Brands (STZ 224.21, -10.73, -4.6%) fell 4.6% after guiding FY22 EPS below consensus.
U.S. Treasuries settled slightly lower in a quiet session. The 2-yr yield decreased two basis points to 0.14%, and the 10-yr yield decreased two basis points to 1.63%. The U.S. Dollar Index decreased 0.4% to 92.08. WTI crude futures decreased 0.2%, or $0.10, to $59.61/bbl.
Reviewing Thursday's economic data:
Initial claims for the week ending April 3 increased 16,000 to 744,000 (Briefing.com consensus 678,000). Continuing claims for the week ending March 27 decreased 16,000 to 3.734 million.
The key takeaway from the report is that it is disappointing labor market data that will convince the Fed that it needs to be patient before removing policy accommodation.
Looking ahead, investors will receive the Producer Price Index for March and Wholesale Inventories for February on Friday.
Russell 2000 +13.6% YTD
Dow Jones Industrial Average +9.5% YTD
S&P 500 +9.1% YTD
Nasdaq Composite +7.3% YTD
WTI crude futures settle slightly lower
08-Apr-21 15:25 ET
Dow +48.62 at 33494.88, Nasdaq +124.51 at 13813.38, S&P +16.62 at 4096.57
[BRIEFING.COM] The S&P 500 continues to trade higher by 0.4% and is on track to close at a record high.
One last look at the S&P 500 sectors shows information technology (+1.3%) firmly in the lead, followed by consumer discretionary (+0.5%) and materials (+0.3%) with modest gains. The energy sector (-1.4%) underperforms with a 1.4% decline. No other sector is down more than 0.3%.
WTI crude futures settled lower by 0.2%, or $0.10, to $59.61/bbl.
S&P 500 ekes out another closing record high
07-Apr-21 16:15 ET
Dow +16.02 at 33446.26, Nasdaq -9.54 at 13688.87, S&P +6.02 at 4079.96
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 (+0.2%) eked out a closing record high on Wednesday in another narrow trading session that reflected consolidation activity. The Nasdaq Composite (-0.1%) and Dow Jones Industrial Average (+0.1%) finished within 0.1% of their flat lines, while the Russell 2000 underperformed with a 1.6% decline.
One of the bigger headlines today came out of JPMorgan Chase (JPM 154.93, +2.39, +1.6%) CEO Jamie Dimon's annual shareholder letter. Mr. Dimon said that an economic boom could easily run into 2023 but also cautioned about the "the not-unreasonable possibility that an increase in inflation will not be just temporary."
Jamie Dimon is one of the more influential voices in the market, but his words didn't appear to strike much trading conviction today. The cyclical materials (-1.8%) and industrials (-0.4%) sectors finished as laggards, and the 10-yr Treasury note yield was unchanged at 1.65%.
Declining issues also outnumbered advancing issues at the NYSE and Nasdaq, but JPM, Amazon (AMZN 3279.39, +55.57, +1.7%), and the mega-caps within the information technology (+0.5%) and communication services (+0.7%) sectors provided influential support.
The market saw a brief uptick after the FOMC Minutes from the March 16-17 meeting highlighted the known view that it would likely take some more time until substantial further progress toward the Fed's maximum-employment and price-stability goals are realized. This view suggested that the current accommodative monetary policy will remain appropriate until the Fed signals otherwise.
Prior to the minutes, Dallas Fed President Kaplan said the Fed can start withdrawing emergency measures once the country has moved on from the pandemic. Note, Mr. Kaplan won't be a voting FOMC participant until 2023.
In other developments, President Biden said he is open to compromising on the $2.3 trillion infrastructure package, consumer credit increased by $27.6 billion in February -- its largest increase since November 2017, and the CDC will reportedly allow U.S. cruises to resume operations by mid-summer with restrictions.
The 2-yr yield was unchanged at 0.16%. The U.S. Dollar Index increased 0.1% to 92.41. WTI crude futures increased 0.6%, or $0.37, to $59.71/bbl.
Reviewing Wednesday's economic data:
The February Trade Balance report showed a widening in the deficit to $71.1 billion (Briefing.com consensus -$70.5 billion) from an upwardly revised -$67.8 billion (from -$68.2 billion) in January. The widening was the result of exports being $5.0 billion less than January exports, and imports being $1.7 billion less than January imports.
The key takeaway from the report is that the impact of the semiconductor shortage was apparent in the $3.4 billion decrease in imports of automotive vehicles, parts, and engines.
Consumer credit increased by $27.6 bln in February after increasing by an upwardly revised $0.1 bln (from -$1.3 bln) in January. This was the largest monthly increase in consumer credit since November 2017.
The key takeaway from the report is that revolving credit expanded for only the second time in the last 12 months and was the largest increase in revolving credit since July 2019.
The weekly MBA Mortgage Applications Index fell 5.1% following a 2.2% decline in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report on Thursday.
Russell 2000 +12.6% YTD
Dow Jones Industrial Average +9.3% YTD
S&P 500 +8.6% YTD
Nasdaq Composite +6.2% YTD
WTI crude futures settle in the green
07-Apr-21 15:30 ET
Dow -40.46 at 33389.78, Nasdaq -22.51 at 13675.90, S&P -0.01 at 4073.93
[BRIEFING.COM] The S&P 500 is trading at its flat line and is a few points short of a record closing high.
One last look at the sector performances shows materials (-1.8%), industrials (-0.6%), and health care (-0.5%) underperforming the benchmark index, while the communication services (+0.6%), information technology (+0.4%), and energy (+0.4%) sectors outperform in positive territory.
WTI crude futures settled higher by 0.6%, or $0.37, to $59.71/bbl.
S&P 500 sets new all-time high but closes slightly lower
06-Apr-21 16:20 ET
Dow -96.95 at 33430.24, Nasdaq -7.21 at 13698.41, S&P -3.97 at 4073.94
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 eked out an intraday record high on Tuesday, but it closed lower by 0.1% in a lackluster session. The Nasdaq Composite (-0.1%), Dow Jones Industrial Average (-0.3%), and Russell 2000 (-0.3%) accompanied the benchmark index in negative territory with small declines.
Most sectors in the S&P 500 traded within their flat lines throughout the session amid no new macro catalysts, suggesting a bit of consolidation activity. The utilities (+0.5%), consumer discretionary (+0.3%), and consumer staples (+0.3%) sectors outperformed in positive territory. The information technology (-0.4%) and health care (-0.4%) sectors were influential laggards.
Despite little buying conviction, bullish investors cited the lack of meaningful profit-taking interest as a constructive development. The Philadelphia Semiconductor Index (-1.2%), however, did see late-day weakness following an FY24 guidance view shared by Applied Materials (AMAT 139.54, -3.51, -2.5%) at its Investor Day.
One supportive factor for risk sentiment was the decline in long-term interest rates. Demand for Treasuries might have been partially rooted in a view that economic growth rates could peak in the next few quarters. On a related note, the IMF raised its 2021 global economic growth forecast to 6% from 5.5%.
The 10-yr yield decreased six basis points to 1.66%. The 2-yr yield decreased one basis point to 0.16%. The U.S. Dollar Index decreased 0.3% to 92.30. WTI crude futures rebounded 1.1%, or $0.65, to $59.34/bbl after sliding 4% yesterday.
Shares of Illumina (ILMN 414.84, +30.30, +7.9%) rose 8% after the biotechnology company issued upside Q1 and FY21 revenue guidance due to an observation that its core business is exceptionally strong and growing ahead of expectations.
Separately, President Biden reportedly moved up the deadline for all adults to be eligible for a COVID-19 vaccine to April 19 from May 1. This was non-market moving news, unlike the first announcement of the May 1 deadline, presumably because most states already have plans in place to make all adults eligible by April 19.
Tuesday's economic data was limited to the JOLTs - Job Openings report, which showed job openings increase to 7.367 million in February from a revised 7.099 million in January (from 6.917 million). On Wednesday, investors will receive the Trade Balance for February, Consumer Credit for February, the FOMC Minutes from the March 16-17 meeting, and the weekly MBA Mortgage Applications Index.
Russell 2000 +14.4% YTD
Dow Jones Industrial Average +9.2% YTD
S&P 500 +8.5% YTD
Nasdaq Composite +6.3% YTD
Crude futures rebound modestly
06-Apr-21 15:30 ET
Dow -105.54 at 33421.65, Nasdaq +19.87 at 13725.49, S&P -2.17 at 4075.74
[BRIEFING.COM] The S&P 500 is trading relatively unchanged, but any positive finish would be good for a record closing high.
One last look at the sector performances shows consumer discretionary (+0.6%) and consumer staples (+0.4%) outperforming in positive territory; conversely, the health care (-0.3%), financials (-0.3%), and industrials (-0.3%) sectors lag with modest declines.
WTI crude futures settled higher by 1.1%, or $0.65, to $59.34/bbl after declining 4.4% yesterday.
S&P 500 and Dow rally to fresh record highs
05-Apr-21 16:15 ET
Dow +373.98 at 33527.19, Nasdaq +225.49 at 13705.62, S&P +58.03 at 4077.90
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 (+1.4%) and Dow Jones Industrial Average (+1.1%) rallied to fresh record highs on Monday, as the market keyed off strong employment and non-manufacturing data for March and positive momentum. The Nasdaq Composite performed slightly better with a 1.7% gain, while the Russell 2000 increased just 0.5%.
Last week when the stock market was closed for Good Friday, the March employment report showcased 916,000 additions to nonfarm payrolls (Briefing.com consensus 627,000) and a 6.0% unemployment rate (Briefing.com consensus 6.0%), versus 6.2% in February. Today, the ISM Non-Manufacturing Index increased to a record 63.7% in March (Briefing.com consensus 58.5%) from 55.3% in February.
Both growth and value stocks reacted positively today, but interestingly, it was the growth stocks that set the pace and the mega-caps that provided influential leadership. The S&P 500 information technology (+2.0%), communication services (+2.3%), and consumer discretionary (+2.3%) sectors, which contain the mega-caps, rose about 2%.
The energy sector (-2.4%), on the other hand, was a noticeable pocket of weakness and was the only sector that closed lower. Energy stocks ran into profit-taking interest amid a sharp decline in oil prices ($58.69/bbl, -2.72, -4.4%).
In the mega-cap domain, Tesla (TSLA 691.05, +29.30, +4.4%) reported a record quarter for Q1 deliveries while the Supreme Court ruled in favor of Alphabet (GOOG 2225.55, +87.80, +4.1%) in a copyright dispute with Oracle (ORCL 74.16, +2.35, +3.3%). The Vanguard Mega Cap Growth ETF (MGK 214.70, +4.53) advanced 2.2%.
Aside from the big economic reports, there were other indicators that suggested the economic reopening is gathering momentum.
For example, the White House COVID-19 Data Director said there was an average of more than 3 million doses per day over the past week, Norwegian (NCLH 29.71, +1.99, +7.2%) outlined plans to resume cruise operations from U.S. ports in July, and Morgan Stanley upgraded MGM Resorts (MGM 41.70, +2.00, +5.0%) to Overweight due to Las Vegas data suggesting the recovery is occurring faster and stronger than expected.
In the Treasury market, activity was more reserved following an abbreviated session on Friday. The 10-yr yield increased one basis point to 1.72% (up four bps from Thursday's settlement), and the 2-yr yield was unchanged at 0.18% (up three bps from Thursday's settlement). The U.S. Dollar Index decreased 0.5% to 92.60.
Reviewing Monday's (and Friday's) economic data:
March nonfarm payrolls increased by 916,000 (Briefing.com consensus 627,000). March private sector payrolls increased by 780,000 (Briefing.com consensus 470,000). March unemployment rate was 6.0% (Briefing.com consensus 6.0%), versus 6.2% in February.
The key takeaway from the employment report is that it was indicative of an economy that is gaining momentum from reopening activity.
The ISM Non-Manufacturing Index increased to 63.7% in March (Briefing.com consensus 58.5%) from 55.3% in February. The dividing line between expansion and contraction is 50.0%. The March reading marks the tenth straight month of growth for the services sector, and is the highest reading on record.
The key takeaway from the report is that it reflects some natural slowing after a long streak of monthly increases for factory orders. In turn, more current economic releases, like the ISM Manufacturing Index for March, will feed a belief that factory orders are destined to rebound in coming months.
Factory orders for manufactured goods decreased 0.8% m/m in February (Briefing.com consensus -0.5%) after increasing an upwardly revised 2.7% (from 2.6%) in January. This is the first time in ten months that factory orders have not increased.
The IHS Markit Services PMI for March was revised higher to 60.4 from 59.8 in the preliminary reading.
Investors will not receive any notable economic data on Tuesday.
Russell 2000 +14.7% YTD
Dow Jones Industrial Average +9.5% YTD
S&P 500 +8.6% YTD
Nasdaq Composite +6.3% YTD
Crude futures settle lower by 4%
05-Apr-21 15:30 ET
Dow +547.09 at 33700.30, Nasdaq +210.26 at 13690.39, S&P +52.79 at 4072.66
[BRIEFING.COM] The S&P 500 is up 1.3% and is on pace to close at a fresh record high.
One last look at the S&P 500 sectors shows information technology (+2.0%), consumer discretionary (+2.5%), and communication services (+2.2%) still leading the advance with gains of at least 2.0% due to the influence of their mega-cap components, while the energy (-2.1%) and real estate (-0.1%) sectors trade lower.
WTI crude futures settled lower by 4.4%, or $2.72, to $58.69/bbl.
S&P 500 tops 4000 for the first time
01-Apr-21 16:15 ET
Dow +171.66 at 33153.21, Nasdaq +233.23 at 13480.13, S&P +46.98 at 4019.87
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 (+1.2%) set intraday and closing record highs on Thursday, topping the 4000 level for the first time, in a relatively broad-based advance. The Nasdaq Composite (+1.8%) and Russell 2000 (+1.5%) outperformed the benchmark index with solid gains, while the Dow Jones Industrial Average (+0.5%) rose modestly.
There was a confluence of positive developments today. To name a few, the ISM Manufacturing Index for March jumped to 64.7% (Briefing.com consensus 61.2%) from 60.8% in February for its tenth straight expansionary reading, first-of-the-month inflows helped drive equities higher and Treasury yields lower, and the mega-caps provided influential leadership.
The mega-cap leadership was represented in the outperformances of the S&P 500 information technology (+2.1%) and communication services (+2.1%) sectors, although the energy sector (+2.7%) advance the most. The defensive-oriented health care (-0.2%), consumer staples (-0.2%), and utilities (-0.02%) sectors closed lower.
The Philadelphia Semiconductor Index (+3.7%) was another pocket of strength after Micron (MU 92.41, +4.20, +4.8%) beat EPS estimates and issued upbeat Q3 guidance and Taiwan Semi (TSM 124.80, +6.52, +5.5%) announced plans to invest $100 billion over three years to expand production capacity.
Energy stocks drew additional support from higher oil prices following an OPEC+ policy meeting. The group agreed to cautiously increase output from May through July with Saudi Arabia easing on its extra 1 million barrel/day cut. WTI crude futures settled higher by 3.8%, or $2.22, to $61.41/bbl.
It was interesting to see buyers return to the Treasury market, and the industrials sector (+0.4%) lag, despite the better-than-expected manufacturing data and President Biden unveiling a $2.3 trillion infrastructure spending plan yesterday.
As noted, first-of-the-month inflows presumably had an influence on Treasury prices, but there might have also been a cautious mindset in front of a three-day weekend that will include the March employment report tomorrow.
The 10-yr yield decreased seven basis points to 1.68%. The 2-yr yield decreased one basis point to 0.15%. The U.S. Dollar Index decreased 0.4% to 92.90. The CBOE Volatility Index (17.33, -2.07, -10.7%) dropped below 18.00.
Reviewing Thursday's economic data:
Initial jobless claims for the week ending March 27 increased by 61,000 to 719,000 (Briefing.com consensus 679,000) from last week's revised count of 658,000 (from 684,000). Continuing claims for the week ending March 20 decreased by 46,000 to 3.794 mln from last week's revised level of 3.840 mln (from 3.870 mln).
The key takeaway from the report is that while claims have been trending in the right direction for months, the overall downtrend continues hitting speed bumps like the unexpected increase that was captured in today's report.
The ISM Manufacturing Index for March jumped to 64.7% (Briefing.com consensus 61.2%) from 60.8% in February, reaching a level not seen since late 1983. The dividing line between expansion and contraction is 50.0%. March marked the tenth consecutive month the ISM Manufacturing Index has been above 50.0%.
The key takeaway from the report is that the Index reached its highest level in more than 37 years in the March reading, thanks to a growing backlog, rising prices, and low customer inventories.
Total construction spending decreased by 0.8% m/m in February (Briefing.com consensus -0.9%) after increasing a downwardly revised 1.2% (from 1.7%) in January. Total private construction spending fell 0.5% m/m and total public construction spending decreased 1.7%.
The key takeaway from the report is that construction spending showed a smaller than expected decrease in February despite severe winter weather in many regions of the country.
The IHS Markit Manufacturing PMI increased to 59.1 in March from 59.0 in February.
Looking ahead, the Employment Situation Report will be released on Friday (market will be closed for Good Friday), followed by the ISM Non-Manufacturing Index for March and Factory Orders for February on Monday.
Russell 2000 +14.1% YTD
Dow Jones Industrial Average +8.3% YTD
S&P 500 +7.0% YTD
Nasdaq Composite +4.6% YTD
WTI crude futures settle higher after OPEC+ meeting
01-Apr-21 15:30 ET
Dow +116.32 at 33097.87, Nasdaq +196.04 at 13442.94, S&P +36.41 at 4009.30
[BRIEFING.COM] The S&P 500 is up 0.9%, and the Russell 2000 is up 1.2%.
One last look at the S&P 500 sectors shows energy (+2.4%), information technology (+1.8%), and communication services (+1.7%) leading the advance with gains over 1.5%, while the utilities (-0.5%), health care (-0.3%), and consumer staples (-0.01%) sectors are trading lower.
WTI crude futures settled higher by 3.8%, or $2.22, to $61.41/bbl. OPEC+ agreed to cautiously increase output from May through July with Saudi Arabia easing on its extra 1 million barrel/day cut.
S&P 500 sets all-time high in growth-stock day
31-Mar-21 16:15 ET
Dow -85.41 at 32981.55, Nasdaq +201.48 at 13246.90, S&P +14.34 at 3972.89
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 (+0.4%) set an intraday record high on Wednesday on the back of renewed strength in the mega-cap/growth/technology stocks, but the market pared gains into the close. The Nasdaq Composite (+1.5%) and Russell 2000 (+1.1%) outperformed the benchmark index, while the Dow Jones Industrial Average (-0.3%) closed slightly lower.
Today's price action appeared heavily influenced by rebalancing activity on the last day of the quarter, suggesting money managers re-allocated funds into quarterly laggards given the sheer outperformance from many of the value/cyclical stocks this quarter. In other words, today was a growth-stock day.
The S&P 500 information technology (+1.5%) and consumer discretionary (+0.8%) sectors finished atop the sector standings, the Vanguard Mega Cap Growth ETF (MGK 207.07, +2.90, +1.4%) rose 1.4%, the ARK Innovation ETF (ARKK 119.95, +5.53, +4.8%) rose 4.8%, and the Philadelphia Semiconductor Index rose 2.6%.
Conversely, the energy (-0.9%) and financials (-0.9%) sectors -- the Q1 winners -- underperformed alongside the materials (-0.5%), industrials (-0.3%), real estate (-0.5%), and consumer staples (-0.5%) sectors.
Besides rebalancing activity, Apple (AAPL 122.15, +2.25, +1.9%) and Microsoft (MSFT 235.77, +3.92, +1.7%) benefited from an analyst upgrade and encouraging corporate news. Specifically, Apple was upgraded to Buy from Neutral at UBS. Microsoft was awarded an augmented-reality contract with the U.S. Army, reportedly worth close to $22 billion over ten years.
In other developments, Pfizer (PFE 36.23, +0.12, +0.3%) and BioNTech (BNTX 109.19, +4.75, +4.6%) said their COVID-19 vaccine trial for adolescents ages 12-15 demonstrated 100% efficacy and robust antibody responses. Walgreens Boots Alliance (WBA 54.90, +1.92, +3.6%) beat EPS estimates and raised its FY21 guidance.
Separately, many investors were waiting for President Biden to unveil a $2 trillion infrastructure plan in a speech after the close. Reports indicated the bill would call for increases in corporate taxes to help finance the spending.
In the Treasury market, yields settled the session slightly higher amid some selling interest. The 2-yr yield increased two basis points to 0.16%, and the 10-yr yield increased two basis points to 1.75%. The U.S. Dollar Index decreased 0.1% to 93.22. WTI crude futures decreased 2.3%, or $1.38, to $59.19/bbl.
Reviewing Wednesday's economic data:
The ADP Employment report pointed to the addition of 517,000 private payrolls in March (Briefing.com consensus 525,000) while the February increase was revised up to 176,000 from 117,000.
The Chicago PMI for March increased to 66.3 (Briefing.com consensus 60.0) from 59.5 in February.
Pending home sales dropped 10.6% in February (Briefing.com consensus -2.6%) following a 2.4% decline in January (from -2.8%)
The weekly MBA Mortgage Applications Index decreased 2.2% following a 2.5% decline in the prior week.
Looking ahead, investors will receive the ISM Manufacturing Index for March, the weekly Initial and Continuing Claims report, and Construction Spending for February on Thursday.
Russell 2000 +12.4% YTD
Dow Jones Industrial Average +7.8% YTD
S&P 500 +5.7% YTD
Nasdaq Composite +2.8% YTD
WTI crude futures settle below $60 per barrel
31-Mar-21 15:25 ET
Dow +15.10 at 33082.06, Nasdaq +264.67 at 13310.09, S&P +29.13 at 3987.68
[BRIEFING.COM] The S&P 500 is up 0.8%, while the Russell 2000 is up 1.7%.
One last look at the S&P sectors shows information technology (+2.1%) outperforming by a comfortable margin over second-place consumer discretionary (+1.3%). Conversely, the financials (-0.4%), energy (-0.5%), and consumer staples (-0.3%) sectors lag in negative territory.
WTI crude futures settled lower by 2.3%, or $1.38, to $59.19/bbl.
Dow ekes out closing record high
29-Mar-21 16:15 ET
Dow +98.89 at 33171.77, Nasdaq -79.08 at 13059.67, S&P -3.36 at 3971.18
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The Dow Jones Industrial Average (+0.3%) closed at fresh record highs on Monday after starting the session modestly lower, while the S&P 500 (-0.1%) and Nasdaq Composite (-0.6%) finished with modest declines. The Russell 2000 closed at session lows with a sharp 2.8% decline, as small-caps remained subject to profit-taking interest.
There was a cautious demeanor in the morning as investors digested some liquidation news. Specifically, Credit Suisse (CS 11.39, -1.48, -11.5%) and Nomura (NMR 5.68, -0.93, -14.1%) warned of potential substantial losses after one of their clients, reportedly Archegos Capital Management, defaulted on margin calls and was forced to sell more than $20 billion in stock last week.
The news highlighted the leveraged, speculative trading in the market right now and stirred some concerns about a contagion effect, although many strategists talked down contagion risks. The S&P 500 financials sector (-0.9%) was one of the weakest performers today, with quarter-end rebalancing as another possible influence.
The energy (-1.3%), information technology (-0.5%), and consumer discretionary (-0.4%) sectors also closed lower, as did high-beta stocks within the ARK Innovation ETF (ARKK 111.17, -2.80, -2.5%) and the Philadelphia Semiconductor Index (-1.7%). They closed off session lows, though.
On the upside, the utilities (+1.1%), communication services (+1.0%), and consumer staples (+1.0%) sectors rose at least 1.0% to provide offsetting support for the benchmark index. Within the industrials sector (unch), Boeing (BA 250.52, +5.65, +2.3%) rose 2% after Southwest Air (LUV 60.96, -0.33, -0.5%) agreed to 100 firm orders of the 737 MAX 7.
The Nasdaq almost turned positive intraday after being down 1.3%, but a turnaround in long-term interest rates may have impeded the rebound bid. The 10-yr yield, which was trading at 1.64% overnight, finished six basis points higher at 1.72%.
The 2-yr yield was unchanged at 0.14%. The U.S. Dollar Index increased 0.2% to 92.93. WTI crude futures increased 0.9%, or $0.56, to $61.55/bbl. On a related note, the Ever Given was refloated on the Suez Canal.
Separately, President Biden is expected to announce an infrastructure spending plan on Wednesday. In addition, the White House press secretary said that the administration will seek another stimulus bill after passing the infrastructure plan.
Investors did not receive any notable economic data on Monday. Looking ahead to Tuesday, investors will receive the Conference Board's Consumer Confidence Index for March, the FHA Housing Price Index for January, and the S&P Case-Shiller Home Price Index for January.
Russell 2000 +9.3% YTD
Dow Jones Industrial Average +8.4% YTD
S&P 500 +5.7% YTD
Nasdaq Composite +1.3% YTD
WTI crude futures settle higher but oil stocks lag
29-Mar-21 15:25 ET
Dow +153.70 at 33226.58, Nasdaq -65.65 at 13073.10, S&P +3.46 at 3978.00
[BRIEFING.COM] The S&P 500 is trading back in the green with a 0.1% gain, while the Russell 2000 remains deep in the red with a 2.3% decline. The small-cap index is getting hit by profit-taking interest and is now up 9.9% this quarter, versus a 5.9% quarterly gain in the S&P 500.
One last look at the S&P sectors shows utilities (+1.2%), communication services (+1.2%), consumer staples (+0.9%), and health care (+0.5%) leading the advance, while the information technology (-0.6%), financials (-0.5%), and energy (-0.6%) sectors are restraining the broader advance.
WTI crude futures settled higher by 0.9%, or $0.56, to $61.55/bbl.
Stocks rally into the close
26-Mar-21 16:15 ET
Dow +453.40 at 33072.88, Nasdaq +161.05 at 13138.75, S&P +65.02 at 3974.54
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 advanced 1.7% on Friday, thanks to a strong finish in the last hour of action. The Nasdaq Composite gained 1.2% after briefly slipping lower in the afternoon. The Dow Jones Industrial Average (+1.4%) and Russell 2000 (+1.8%) also gained more than 1.0%.
The gains were relatively broad, with ten of the 11 S&P sectors closing higher and eight rising more than 1.5%. The energy (+2.6%), information technology (+2.5%), materials (+2.5%), and real estate (+2.5%) sectors gained more than 2.0%, while the communication services sector (-0.3%) was the lone holdout.
Several of the influential mega-caps like Tesla (TSLA 618.71, -21.68, -3.4%) struggled to get going all day, with some blaming a rebound in long-term interest rates for their underperformance. The 10-yr yield increased five basis points to 1.66% amid renewed selling interest. These stocks, however, did pare losses as the market rallied into the close.
Semiconductor stocks were a pocket of absolute strength today, evident by the 5.0% gain in the Philadelphia Semiconductor Index (+5.0%). They helped provide the boost in the technology sector, which started the day unchanged.
In the financials space, the Fed announced that the temporary and additional restrictions on bank dividends and share repurchases will end for most firms after June 30 following the completion of the current round of stress tests. The SPDR S&P Bank ETF (KBE 52.57, +0.98, +1.9%) increased 2%, further supported by the curve-steepening activity in the Treasury market.
The 2-yr yield increased one basis point to 0.14%. The U.S. Dollar Index increased 0.2% to 92.70. WTI crude futures rose 4.2%, or $2.47, to $60.99/bbl.
In corporate news, Nike (NKE 132.99, +4.35, +3.4%) was upgraded to Outperform from Neutral at Robert W. Baird, ViacomCBS (VIAC 48.23, -18.12, -27.3%) pulled back another 27% after Wells Fargo downgraded the stock to Underweight from Equal Weight, and WeWork plans to go public via a SPAC merger with BowX Acquisition Corp. (BOWX 11.71, +1.98, +20.3%) at a $9 billion valuation.
Reviewing Friday's economic data:
Personal income fell 7.1% in February (Briefing.com consensus -7.0%). Personal spending decreased 1.0% (Briefing.com consensus -0.6%). The PCE Price Index increased 0.2% (Briefing.com consensus 0.3%) while the Core PCE Price Index, which excludes food and energy, increased 0.1% (Briefing.com consensus 0.1%).
The key takeaway from the report is that spending decreased more than expected, indicating an inclination among consumers to continue saving. That said, the personal savings rate fell to 13.6% in February from 19.8% in January.
The final reading of the University of Michigan Consumer Sentiment survey for March increased to 84.9 (Briefing.com consensus 83.6) from 83.0 in the preliminary reading. The final March reading puts the series at a one-year high.
The key takeaway from the report is that sentiment was boosted by another round of direct payments and a faster than expected vaccination distribution.
The Advance report for International Trade in Goods for February showed a deficit of $86.7 billion versus $83.7 billion in January. The Advance report for Retail Inventories for February was unchanged, while the Advance report for Wholesale Inventories for February increased 0.5%.
There is no economic data of note scheduled for Monday.
Russell 2000 +12.5% YTD
Dow Jones Industrial Average +8.1% YTD
S&P 500 +5.8% YTD
Nasdaq Composite +1.9% YTD
Crude future settle back above $60 per barrel
26-Mar-21 15:30 ET
Dow +203.88 at 32823.36, Nasdaq +24.69 at 13002.39, S&P +30.75 at 3940.27
[BRIEFING.COM] The S&P 500 is trading back near session highs with a 0.8% gain, while the Russell 2000 trades higher by 0.4%.
One last look at the sector performances shows energy (+1.8%), materials (+1.8%), real estate (+1.7%), and information technology (+1.5%) leading the advance with solid gains. Conversely, the communication services (-1.2%), utilities (-0.2%), and consumer discretionary (-0.1%) sectors still trade lower.
WTI crude futures settled higher by 4.2%, or $2.47, to $60.99/bbl.
Markets gains on cyclical leadership and technical support
25-Mar-21 16:20 ET
Dow +199.42 at 32619.48, Nasdaq +15.79 at 12977.70, S&P +20.38 at 3909.52
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 increased 0.5% on Thursday amid cyclical leadership and technical support. The benchmark index briefly slipped below its 50-day moving average (3871) with an early 0.9% decline, but investors stepped in faithfully to buy the dip. The Nasdaq Composite (+0.1%) and Dow Jones Industrial Average (+0.6%) also reclaimed early losses and some.
The Russell 2000 rose 2.3% after finding support at the 2100 level, which represented an 8% decline in just over three sessions. Presumably, this was a short-term oversold condition that was primed for a bounce.
A pro-cyclical trade emerged during the day, as the industrials (+1.6%), financials (+1.6%), and materials (+1.4%) sectors paced the rebound effort on no specific news catalysts. The energy sector (+0.3%) overcame an early 3.3% decline, even as oil prices ($58.52/bbl, -2.61, -4.3%) fell 4% despite reports that the Suez Canal could be blocked for weeks.
The communication services (-0.3%) and information technology (-0.1%) sectors stymied the broader advance with modest declines.
There was a lot of news today, but the developments didn't necessarily explain today's action given the market's fickle performance. End-of-quarter rebalancing machinations could have played an underlying role.
Highlighting a few of the stories, President Biden said he will announce an infrastructure plan next week (reportedly with a price tag of up to $4 trillion), weekly initial claims declined by 97,000 to 684,000 (Briefing.com consensus 710,000) for its lowest level since last March, and a congressional hearing on Section 230 matters was still in session by the close.
Individual movers included Nike (NKE 128.64, -4.52, -3.4%), which fell 3% amid Chinese criticism on social media in response to the company's statement on the Xinjiang region, and Boeing (BA 247.19, +7.95, +3.3%) on news the company may begin delivering 787 Dreamliners this week. GameStop (GME 183.75, +63.41, +52.7%) soared 50% following yesterday's 34% post-earnings drop.
U.S. Treasuries finished mixed and little changed. The 10-yr yield was unchanged at 1.61% after trading slightly lower amid the negative start in equities, while the 2-yr yield decreased one basis point to 0.13%. The U.S. Dollar Index increased 0.4% to 92.87.
Reviewing Thursday's economic data:
Initial jobless claims for the week ending March 20 declined by 97,000 to 684,000 (Briefing.com consensus 710,000). Continuing claims for the week ending March 13 decreased by 264,000 to 3.870 million.
The key takeaway from this report is that initial claims are the lowest they have been since March 14, 2020. Granted initial claims are still high, yet the directional movement fits the bill of an improving economy that requires increased hiring activity and reduced layoff activity.
The third estimate for Q4 GDP was revised up to 4.3% (Briefing.com consensus 4.1%) from 4.1% while the GDP Price Deflator was revised down to 2.0% (Briefing.com consensus 2.1%) from 2.1%.
The key takeaway from this report is that it is dated (the first quarter is only days from being over) and shouldn't have any market impact.
Looking ahead, investors will receive Personal Income and Spending for February, PCE Prices for February, the final Univ. of Michigan Index of Consumer Sentiment for March, and the Advance reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories on Friday.
Russell 2000 +10.6% YTD
Dow Jones Industrial Average +6.6% YTD
S&P 500 +4.1% YTD
Nasdaq Composite +0.7% YTD
WTI crude futures settle lower by 4%
25-Mar-21 15:30 ET
Dow +182.10 at 32602.16, Nasdaq +14.33 at 12976.24, S&P +18.85 at 3907.99
[BRIEFING.COM] The S&P 500 is trading near session highs with a 0.4% gain.
One last look at the S&P 500 sectors shows industrials (+1.5%), financials (+1.4%), and materials (+1.4%) leading the advance with gains over 1.0%, while the energy (-0.2%) and communication services (-0.2%) sectors trade slightly lower.
WTI crude futures settled lower by 4.3%, or $2.61, to $58.52/bbl despite reports that traffic is growing in the Suez Canal due to the ship blockage. Presumably, this would hinder supply, which would be bullish on a short-term basis if demand is unchanged. Note, crude futures rose 6% yesterday.
Market closes lower in disappointing session
24-Mar-21 16:15 ET
Dow -3.09 at 32420.06, Nasdaq -265.81 at 12961.91, S&P -21.38 at 3889.14
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 0.6% on Wednesday in a disappointing session from a price action perspective. The benchmark index was up as much as 0.8% in the morning on the back of renewed strength in the cyclical stocks, but weakness in the mega-cap/growth stocks limited the early advance with broader selling interest picking up into the close.
The Nasdaq Composite fell 2.0% after being up 0.5% in early action, and the Russell 2000 fell 2.4% after being up 1.7% in early action. The Dow Jones Industrial Average (-0.01%) closed relatively unchanged after being up 1.1% intraday.
There was a strong pro-cyclical trade to start the day after Intel (INTC 62.04, -1.44, -2.3%) announced plans to invest $20 billion to build two semiconductor manufacturing facilities in Arizona, the eurozone reported stronger-than-expected flash March Manufacturing PMIs, and more states announced plans to expand COVID-19 vaccine eligibility.
The cyclical trade, however, lost steam in the afternoon, tempering the gains in the S&P 500 energy (+2.5%), industrials (+0.7%), materials (+0.7%), and financials (+0.4%) sectors. The real culprits behind the negative index performances, though, were the influential information technology (-1.2%), consumer discretionary (-1.5%), and communication services (-1.7%) sectors.
Interestingly, the growth stocks within these key sectors underperformed for most of the day despite the friendly action in the Treasury market. The inability to react positively to lower rates perhaps fueled uncertainty about the path of growth stocks, many of which remain well below their recent all-time highs.
The 10-yr yield decreased two basis points to 1.61% amid an uptick in demand following the $61 billion 5-yr note auction. The 2-yr yield decreased one basis point to 0.14%. The U.S. Dollar Index increased 0.3% to 92.58. WTI crude futures rebounded 5.9%, or $3.38, to $61.13/bbl amid technical and supply-side factors.
Within the technology sector, shares of Intel were up 6% at the open following its strategic announcement, but shares quickly turned around in a sell-the-news reaction after briefly hitting a 52-week high. Adobe (ADBE 451.51, -8.69, -1.9%) also gave up an opening gain despite beating top and bottom-line estimates and issuing upbeat guidance for Q2 and FY21.
Elsewhere, the ARK Innovation ETF (ARKK 114.78, -6.92, -5.7%) fell 5.7% while shares of GameStop (GME 120.34, -61.41, -33.8%) plunged 34% following its earnings report.
Cruise lines were an exemption to the cyclical trade after the CDC said cruise line restrictions will remain until Nov. 1 despite calls for a phase-in resumption in early July, according to Bloomberg. Shares of Carnival (CCL 24.85, -0.48, -1.9%) declined 2% after trading higher by around 8% prior to the news.
Reviewing Wednesday's economic data:
Durable goods orders declined 1.1% m/m in February (Briefing.com consensus +0.9%) following an upwardly revised 3.5% increase (from 3.4%) in January. Excluding transportation, durable goods orders dropped 0.9% m/m (Briefing.com consensus +0.6%) following an upwardly revised 1.6% increase (from 1.4%) in January.
The key takeaway from the report is that the disappointing data for February followed on the heels of some notable strength in January, which in turn followed on the heels of some notable strength in prior months, suggesting that it is most likely only a temporary pause in the strengthening demand for durable goods.
The IHS final Markit Manufacturing PMI for March checked in at 59.0 vs. 58.6 in the preliminary reading. The final Services PMI for March checked in at 60.0 vs. 59.8 in the preliminary reading.
The weekly MBA Mortgage Applications Index decreased 2.5% following a 2.2% decline in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report and the third estimate for Q4 GDP on Thursday.
Russell 2000 +8.1% YTD
Dow Jones Industrial Average +5.9% YTD
S&P 500 +3.5% YTD
Nasdaq Composite +0.6% YTD
Cruise lines turn negative after CDC balks on phase-in request
24-Mar-21 15:30 ET
Dow +133.40 at 32556.55, Nasdaq -184.11 at 13043.61, S&P -1.19 at 3909.33
[BRIEFING.COM] The S&P 500 has slipped below its flat line, while the Nasdaq (-1.4%) and Russell 2000 (-1.1%) underperform with losses over 1.0%.
The cyclical trade has some of its early luster. Cruse lines, for instance, have turned negative after the CDC said cruise line restrictions will remain until Nov. 1 despite calls for a phase-in resumption in early July, according to Bloomberg. Carnival (CCL 24.89, -0.44, -1.7%) is down 1.7% after trading higher by 8% prior to the news.
This hasn't affected oil prices, though. WTI crude futures settled higher by 5.9%, or $3.38, to $61.13/bbl as OPEC+ reportedly wants to keep output steady for another month to help offset lower demand in Europe.
Large-cap indices close higher amid rebalancing efforts
22-Mar-21 16:15 ET
Dow +103.23 at 32731.20, Nasdaq +162.31 at 13377.57, S&P +27.49 at 3940.59
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 advanced 0.7% on Monday, as quarter-end rebalancing efforts drove the mega-caps higher and suppressed Treasury yields, although it did close off session highs (+1.1%). The Nasdaq Composite increased 1.2%, while the Dow Jones Industrial Average increased just 0.3% and the Russell 2000 (-0.9%) fell victim to rebalancing activity.
In the home stretch of the first quarter, which has greatly favored cyclical/value/small caps stocks, money appeared to disproportionately flow into the mega-cap/growth-stock laggards like Apple (AAPL 123.39, +3.40, +2.8%) and Tesla (TSLA 670.00, +15.13, +2.3%) as well as U.S. Treasuries. The 10-yr yield decreased five basis points to 1.68%, which was a double-bonus for growth stocks.
In terms of sector performances, the information technology sector (+1.9%) was the most influential gainer given it's the most heavily-weighted sector in the S&P 500. A strong showing from the semiconductor stocks supported the cause. The Philadelphia Semiconductor Index advanced 2.2%.
The consumer staples (+1.2%), real estate (+1.1%), health care (+0.9%), and communication services (+0.8%) sectors followed suit, but there were still more declining issues than advancing issues at the NYSE and Nasdaq. The financials (-1.3%), energy (-1.0%), industrials (-0.1%), and utilities (-0.1%) sectors closed lower.
The underperformance of the cyclical stocks despite encouraging U.S. Phase 3 trial data for AstraZeneca's (AZN 51.20, +1.99, +4.0%) COVID-19 vaccine supported the view that price action was more technically-oriented than fundamentally-driven. AstraZeneca plans to file for emergency use authorization in the coming weeks.
In addition, growth stocks barely reacted to the initial release of a New York Times report that President Biden is considering tax increases to help pay for an infrastructure/climate change bill. The administration later called the report "premature and not a reflection of the White House's thinking."
Separately, Kansas City Southern (KSU 249.09, +24.93, +11.1%) agreed to be acquired by Canadian Pacific (CP 356.53, -21.95, -5.8%) in a cash and stock transaction representing an enterprise value of $29 billion. The agreement valued KSU at $275 per share, or a 23% premium from Friday's close, but regulatory risks kept shares below this price.
The 2-yr yield was unchanged at 0.15%. The U.S. Dollar Index declined 0.1% to 91.80. WTI crude futures settled little changed at $61.47/bbl.
Reviewing Monday's economic data:
Existing home sales decreased 6.6% m/m in February to a seasonally adjusted annual rate of 6.22 million (Briefing.com consensus 6.50 million) from a downwardly revised 6.66 million (from 6.69 million) in January. Total sales in February were up 9.1% from a year ago.
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 along with rising mortgage rates.
Looking ahead, investors will receive New Home Sales for February and the Current Account Balance for the fourth quarter on Tuesday.
Russell 2000 +14.8% YTD
Dow Jones Industrial Average +6.9% YTD
S&P 500 +4.9% YTD
Nasdaq Composite +3.8% YTD
Market Snapshot
Dow 32731.20 +103.23 (0.32%)
Nasdaq 13377.57 +162.31 (1.23%)
SP 500 3940.59 +27.49 (0.70%)
10-yr Note +3/32 1.695
NYSE Adv 1453 Dec 1783 Vol 785.2 mln
Nasdaq Adv 1676 Dec 2260 Vol 5.2 bln
Industry Watch
Strong: Information Technology, Real Estate, Health Care, Communication Services
Weak: Financials, Energy, Industrials, Utilities
Moving the Market
-- Rebalancing efforts drove mega-caps/growth stocks higher and suppressed Treasury yields
-- Cyclical/small-cap stocks underperformed
-- Price action lost some steam in the afternoon
WTI crude futures settle little changed
22-Mar-21 15:25 ET
Dow +161.11 at 32789.08, Nasdaq +200.44 at 13415.70, S&P +35.35 at 3948.45
[BRIEFING.COM] The S&P 500 is currently up 0.9% and is trading around the 3950 level.
One last look at the S&P 500 sectors shows eight sectors trading higher while three trading lower. The information technology (+2.1%), consumer discretionary (+1.2%), communication services (+1.2%), and real estate (+1.1%) sectors outperform, while the financials (-1.0%), energy (-0.3%), and utilities (-0.3%) sectors are the lone holdouts today.
WTI crude futures settled little changed at $61.47/bbl.
Mixed session to close out the week, financials lagged
19-Mar-21 16:20 ET
Dow -234.33 at 32627.97, Nasdaq +99.07 at 13215.26, S&P -2.36 at 3913.10
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 decreased 0.1% on Friday, as the broad market struggled to gain traction after the benchmark index briefly slipped below the 3900 level in early action. The Nasdaq Composite (+0.8%) and Russell 2000 (+0.9%) reclaimed early losses and closed higher after underperforming yesterday, while the Dow Jones Industrial Average (-0.7%) underperformed in the red.
Like the major indices, sector performances were mixed: six S&P 500 sectors closed lower, while five closed higher. The communication services (+0.8%) and consumer discretionary (+0.8%) sectors finished as leaders amid some mega-cap support; conversely, the financials (-1.2%), real estate (-1.3%), industrials (-0.7%), and materials (-0.5%) sectors lagged.
Note, there was some weakness into the close, which coincided with a surge in trading volume related to quadruple witching-options expiration activity.
The financials sector underperformed after the Fed announced prior to the open that it will let the temporary Supplementary Leverage Ratio ("SLR") exemption expire on March 31. Since May 15, 2020, banks were permitted to exclude Treasuries in the calculation of their SLR.
The thinking was that banks might have to raise more capital if they don't offload more of their Treasury holdings and/or reduce buybacks. The news contributed to a profit-taking mindset, even as Treasury yields moved off lows following the announcement.
The 10-yr yield was trading at 1.68% pre-announcement, then rose to 1.74% before settling unchanged at 1.73%. The 2-yr yield decreased one basis point to 0.16%. The U.S. Dollar Index increased 0.1% to 91.96. WTI crude futures ($61.45/bbl, +1.45, +2.4%) rebounded 2%, trimming its weekly decline to 6%.
Facebook (FB 290.11, +11.49, +4.1%) was a key mover today with a 4% gain. The stock might have benefited from optimistic comments from CEO Mark Zuckerberg that Apple's (AAPL 119.99, -0.54, -0.5%) privacy rule changes could help Facebook. Separately, shares of FedEx (FDX 279.58, +16.07, +6.1%) rose 6% following its better-than-expected earnings report.
Visa (V 206.90, -13.76, -6.2%) and Nike (NKE 137.49, -5.68, -4.0%) were individual laggards that weighed on the Dow. Visa fell 6% after The Wall Street Journal reported the company is being investigated by the Department of Justice over its debit-card practices. Nike fell 4% after missing revenue estimates due to shipping disruptions.
Investors did not receive any economic data of note on Friday. Looking ahead, Existing Home Sales for February will be released on Monday.
Russell 2000 +15.8% YTD
Dow Jones Industrial Average +6.6% YTD
S&P 500 +4.2% YTD
Nasdaq Composite +2.5% YTD
Market Snapshot
Dow 32627.97 -234.33 (-0.71%)
Nasdaq 13215.26 +99.07 (0.76%)
SP 500 3913.10 -2.36 (-0.06%)
10-yr Note -1/32 1.722
NYSE Adv 1758 Dec 1420 Vol 3.5 bln
Nasdaq Adv 2434 Dec 1481 Vol 7.4 bln
Industry Watch
Strong: Communication Services, Consumer Discretionary, Health Care
Weak: Financials, Real Estate, Industrials, Materials
Moving the Market
-- Market struggled to gain traction after lower start, closed mixed
-- Fed announced it will let the Supplementary Leverage Ratio (SLR) exemption expire on March 31
-- Bank stocks underperformed
Crude futures trim weekly decline
19-Mar-21 15:25 ET
Dow -115.20 at 32747.10, Nasdaq +84.83 at 13201.02, S&P +6.86 at 3922.32
[BRIEFING.COM] The S&P 500 continues to cling onto a slim 0.2% gain. The Russell 2000 outperforms with a 0.6% gain.
One last look at the S&P sectors shows communication services (+1.0%), energy (+0.8%), and utilities (+0.8%) outperforming in the green, while the financials sector (-1.0%) remains the most influential laggard. No other sector is down more than 0.3%.
WTI crude futures settled higher by 2.4%, or $1.45, to $61.45/bbl to recoup some of yesterday's 7% drop. Crude futures still ended the week with a 6.3% decline.
Risk sentiment curbed with higher rates and growth-stock losses
18-Mar-21 16:20 ET
Dow -153.07 at 32862.30, Nasdaq -409.03 at 13116.19, S&P -58.66 at 3915.46
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 fell 1.5% on Thursday, as another spike in the 10-yr yield (1.73%) continued to undercut the heavily-weighted growth stocks, whose losses took a toll on risk sentiment. The Nasdaq Composite (-3.0%) and Russell 2000 (-2.9%) dropped around 3.0%. The Dow Jones Industrial Average decreased just 0.5% after setting an all-time high during the day.
Briefly, the 10-yr yield rose past yesterday's pre-FOMC high and flirted with 1.76% today on continued growth/inflation expectations and a report out of the Nikkei that the Bank of Japan is likely to widen its trading band around 0.00% for the 10-yr JGB to 50 basis points from 40 basis points. The 10-yr settled nine basis points above yesterday's settlement at 1.73%.
The mega-cap/growth/technology stocks succumbed to renewed selling interest amid underlying concerns that these widely-owned names might not perform as well as they did in 2020 in a higher interest-rate environment. The lack of a buy-the-dip mentality in these stocks despite long-term rates easing from session highs likely exacerbated selling interest.
Ten of the 11 S&P 500 sectors closed in negative territory, with the information technology (-2.9%), consumer discretionary (-2.6%), and communication services (-2.0%) sectors as influential laggards. The energy sector (-4.7%) declined the most, though, as oil prices ($60.00/bbl, -$4.61, -7.1%) pulled back 7% alongside other risk assets.
Note, crude futures slid into the pit close after France's Prime Minister Castex announced a new monthlong lockdown in 16 regions, including Paris, stirring some concerns about the recovery in global oil demand. A stronger U.S. dollar (91.85, +0.40, +0.4%) was another negative factor for oil prices. Prior to today, crude futures were up 34% this year.
Some investors rotated money into the financials sector (+0.6%), especially early in the day, as the 2s10s rate spread continued to widen, but this trade lost steam as the broader market weakened in the afternoon and into the close. The financials sector was up as much as 2.5% intraday. The 2-yr yield increased three basis points to 0.16%.
Positive news that were lost in the shuffle of today's weakness included the Philadelphia Fed Index soaring to 51.8 in March (Briefing.com consensus 23.5) from 23.1 in February and the EMA confirming that AstraZeneca's (AZN 49.33, -0.74, -1.5%) COVID-19 vaccine is safe and effective. The EMA saw no association with an increase in overall risk of blood clots.
Reviewing Thursday's economic data:
Initial jobless claims for the week ending March 13 increased by 45,000 to 770,000 (Briefing.com consensus 710,000) while continuing claims for the week ending March 6 decreased by 18,000 to 4.124 million.
The key takeaway from the report is the high level (still) of initial jobless claims, yet the perceived takeaway is likely to be that coming weeks should produce more encouraging numbers as reopening activity increases hiring, and reduces layoff, activity.
The Conference Board's Leading Economic Index (LEI) increased 0.2% m/m in February (Briefing.com consensus 0.3%) following an unrevised 0.5% increase in January. February marked the tenth consecutive monthly increase.
The key takeaway from the report is that it has not yet fully captured the momentum of the vaccination program and the passage of the $1.9 trillion stimulus package, which leads one to think it should show a higher reading next month, especially as business activity rebounds from the transitory impact of severely adverse winter weather seen in the South and Midwest in mid-February.
The Philadelphia Fed Index soared to 51.8 in March (Briefing.com consensus 23.5) from 23.1 in February.
There is no economic data of note scheduled for Friday.
Russell 2000 +14.8% YTD
Dow Jones Industrial Average +7.4% YTD
S&P 500 +4.2% YTD
Nasdaq Composite +1.8% YTD
Market Snapshot
Dow 32862.30 -153.07 (-0.46%)
Nasdaq 13116.19 -409.03 (-3.02%)
SP 500 3915.46 -58.66 (-1.48%)
10-yr Note -28/32 1.718
NYSE Adv 697 Dec 2574 Vol 1.1 bln
Nasdaq Adv 971 Dec 3011 Vol 5.6 bln
Industry Watch
Strong: Financials
Weak: Information Technology, Consumer Discretionary, Communication Services, Energy
Moving the Market
-- 10-yr yield settles nine basis points higher at 1.73%
-- Weakness in mega-cap/growth stocks; relative strength in bank stocks
-- Energy stocks drop amid 7% pullback in oil prices
WTI crude futures settle lower by 7%
18-Mar-21 15:30 ET
Dow -57.58 at 32957.79, Nasdaq -345.12 at 13180.10, S&P -45.14 at 3928.98
[BRIEFING.COM] The S&P 500 continues to trade near session lows with a 1.1% decline. The Russell 2000 is down 1.8%.
One last look at the S&P 500 sectors shows energy (-4.5%), information technology (-2.5%), consumer discretionary (-2.1%), and communication services (-1.6%) leading the retreat, while the financials (+0.7%), industrials (+0.3%), and health care (+0.1%) sectors trade in positive territory.
WTI crude futures settled sharply lower by 7.1%, or $4.61, to $60.00/bbl. Prior to today, oil prices were up nearly 35% this year.
S&P 500 and Dow close at record highs following FOMC statement
17-Mar-21 16:20 ET
Dow +189.42 at 33015.37, Nasdaq +53.64 at 13525.22, S&P +11.41 at 3974.12
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 (+0.3%) and Dow Jones Industrial Average (+0.6%) closed at record highs on Wednesday, as the market reacted positively to the Fed's dovish policy statement in the afternoon. The Nasdaq Composite (+0.4%) and Russell 2000 (+0.7%) also posted modest gains, overcoming 1.5% and 1.3% intraday declines, respectively.
The intraday decline in the S&P 500 wasn't too bad (-0.4%), but there were signs of de-risking as all 11 of its sectors traded in negative territory at one point. The heavily-weighted growth stocks especially weighed on the Nasdaq as the 10-yr yield rose past 1.67%. Selling pressure, however, was relieved as soon as the FOMC statement was released at 2:00 p.m. ET.
The policy statement revealed no change to the fed funds rate (unanimous decision) and no change in the median estimate that the fed funds rate would remain unchanged through 2023. In addition, the Fed will continue to increase its holdings of Treasury and agency mortgage-backed securities by at least $120 billion per month, and the median estimate for the change in real GDP for 2021 was revised up to 6.5% from 4.2%.
In his press conference, Fed Chair Powell said it wouldn't be time to start talking about tapering asset purchases until the Fed sees substantial further progress in meeting its employment and inflation goals -- "actual progress" and not "forecast progress." Mr. Powell added that a transitory rise in inflation above 2% seems likely this year and the Fed will have something to announce on the supplementary leverage ratio (SLR) exemption in the coming days. There was a sense the Fed could extend the SLR exemption beyond the March 31 expiration.
Overall, the Fed communicated a patient and dovish approach to monetary policy that satisfied the market. Six of the 11 S&P 500 sectors closed in positive territory, the information technology sector (-0.1%) briefly turned positive after being down 1.6% intraday, long-term interest rates backed down from highs, and the U.S. dollar weakened (91.43, -0.45, -0.5%).
The cyclically-oriented consumer discretionary (+1.4%), industrials (+1.1%), energy (+0.9%), materials (+0.9%), and financials (+0.7%) sectors provided the leadership, while buying interest evaded the utilities sector (-1.6%).
The 10-yr yield settled at 1.64%, or two basis points above yesterday's settlement level. The 2-yr yield declined one basis point to 0.13%. WTI crude futures settled lower by 0.3%, or $0.20, to $64.61/bbl.
Separately, Lennar (LEN 100.95, +12.24, +13.8%) was one of today's biggest individual gainers with a 14% gain after announcing a $3-5 billion asset spinoff, confirming the formation of a $4 billion single family home rental platform, and beating EPS and revenue estimates. Lennar commented that demand for single family homes from former city dwellers is strong and growing.
Reviewing Wednesday's economic data:
Housing starts declined 10.3% month-over-month in February to a seasonally adjusted annual rate of 1.421 million units (Briefing.com consensus 1.550 million) and building permits declined 10.8% month-over-month to a seasonally adjusted annual rate of 1.682 million (Briefing.com consensus 1.750 million).
The key takeaway from the report is that the declines in single-unit starts were the worst in the Midwest (-30.5%) and South (-16.0%) regions, which were unduly impacted by the severe winter weather that hit in mid-February. That should take some of the sting out of the weak starts number for February, yet the fact that building permits (a leading indicator) for single-unit dwellings were flat to down in all regions is apt to create some concern that rising lumber costs and rising mortgage rates will lead to some slowing in the homebuilding industry.
The MBA Mortgage Applications Index decreased 2.2% following a 1.3% 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 February, and the Philadelphia Fed Index for March on Thursday.
Russell 2000 +18.3% YTD
Dow Jones Industrial Average +7.9% YTD
S&P 500 +5.8% YTD
Nasdaq Composite +4.9% YTD
Market Snapshot
Dow 33015.37 +189.42 (0.58%)
Nasdaq 13525.22 +53.64 (0.40%)
SP 500 3974.12 +11.41 (0.29%)
10-yr Note -2/32 1.639
NYSE Adv 1772 Dec 1390 Vol 1.1 bln
Nasdaq Adv 2385 Dec 1593 Vol 5.4 bln
Industry Watch
Strong: Consumer Discretionary, Industrials, Financials, Materials, Energy
Weak: Utilities, Real Estate, Health Care, Information Technology, Consumer Staples
Moving the Market
-- S&P 500 and Dow Jones Industrial Average close at record highs following dovish FOMC policy statement
-- Fed kept rates and pace of asset purchases unchanged
-- No change in the median estimate that the fed funds rate would remain unchanged through 2023
-- Long-term interest rates backed down from session highs
Crude futures settle on lower note
17-Mar-21 15:25 ET
Dow +156.23 at 32982.18, Nasdaq +69.79 at 13541.37, S&P +10.88 at 3973.59
[BRIEFING.COM] The S&P 500 is trading higher by 0.3% while the Dow is up 0.5% at fresh all-time highs.
One last look at the sector performances shows consumer discretionary (+1.5%) and materials (+0.6%) up in the lead. The information technology sector trades flat after being down 1.6% intraday. The utilities (-1.4%), real estate (-0.5%), and health care (-0.2%) sectors still trade lower.
WTI crude futures settled lower by 0.3%, or $0.20, to $64.61/bbl.
Dow snaps winning streak ahead of Fed policy statement tomorrow
16-Mar-21 16:20 ET
Dow -127.51 at 32825.95, Nasdaq +11.86 at 13471.58, S&P -6.23 at 3962.71
https://www.briefing.com/stock-market-update
[BRIEFING.COM] The major indices closed mixed on Tuesday, as cyclical/value/small-cap stocks succumbed to profit-taking interest and growth/technology stocks showed relative outperformance. The S&P 500 shed 0.2% after starting the day at incremental new highs, but it struggled to attract follow-through from buyers ahead of the FOMC's policy statement tomorrow.
The Nasdaq Composite increased 0.1% after being up as much as 1.2% intraday. The Dow Jones Industrial Average declined 0.4% and snapped a seven-session winning streak. The Russell 2000 underperformed with a 1.7% decline.
Seven S&P 500 sectors closed lower while four closed higher. The cyclically-oriented energy (-2.9%), industrials (-1.4%), financials (-1.1%), consumer discretionary (-0.9%), and materials (-0.9%) sectors lagged throughout the day. The information technology (+0.8%) and communication services (+0.9%) sectors, however, provided influential support.
Prior to the open, investors received February retail sales and industrial production data that missed expectations, which in turn was construed as a good excuse to take profits in the cyclical stocks. Others ostensibly attributed the economic data to the early strength in the tech-sensitive Nasdaq, but truthfully, it was already indicated higher in pre-market action before the data was released.
Briefly, total retail sales declined 3.0% m/m decline in February following an upwards revision to 7.6% (from 5.3%) in January, and industrial production declined 2.2% m/m (Briefing.com consensus +0.5%). Note, there are expectations for retail sales to rebound in the coming months as households receive/spend their stimulus checks, while the industrial production data was influenced by the severe winter weather in southern parts of the U.S. last month.
Elsewhere, there was some focus on the Treasury market following a $24 billion 20-yr note reopening action, which was met with strong demand. The 10-yr yield briefly dipped to 1.59% in the wake of the auction results, then briefly rose to 1.63%, which took some steam out of the growth-stock trade.
The 10-yr yield ultimately settled one basis point higher at 1.62%. The 2-yr yield was unchanged at 0.14%. The U.S. Dollar Index was little changed at 91.87. WTI crude futures declined 0.9%, or $0.59, to $64.81/bbl.
Highlighting some individual stock news, Moderna (MRNA 156.02, +12.36, +8.6%) began dosing children ages 6 months to less than 12 years for its COVID-19 vaccine study, and Roblox (RBLX 77.00, +4.86, +6.7%) was initiated with a Buy rating at Stifel. MRNA and RBLX shares rose nearly 9% and 7%, respectively.
Reviewing Tuesday's economic data:
Total retail sales declined 3.0% m/m in February (Briefing.com consensus -0.6%) and retail sales, excluding autos, declined 2.7% (Briefing.com consensus +0.2%). However, there were large upward revisions to January sales, with total sales increasing 7.6% (from 5.3%) and sales, excluding autos, surging 8.3% (from 5.9%).
The key takeaway from the report is that the "weakness" in February was a byproduct of the tremendous strength in January, which made the sequential comparison exceedingly difficult. The market shouldn't be thrown for much of a loop by the February sales data -- if it's thrown for one at all -- because it recognizes that a new round of stimulus checks is just now starting to hit deposit accounts and will assuredly help prop up retail sales in March and April along with the early unleashing of some pent-up demand.
Total industrial production decreased 2.2% m/m in February (Briefing.com consensus +0.5%) following an upwardly revised 1.1% increase (from 0.9%) in January. The capacity utilization rate dropped to 73.8% (Briefing.com consensus 75.6%) from a downwardly revised 75.5% (from 75.6%) in January.
The key takeaway from the report is that the decline was unduly influenced by the severe winter weather in the south central region of the country in mid-February. That should drive expectations for a quick, and sizable, rebound in March.
The NAHB Housing Market Index decreased to 82 in March (Briefing.com consensus 84.0) from 84.0 in February.
Business inventories increased 0.3% in January (Briefing.com consensus 0.3%) following a revised 0.8% increase (from 0.6%) in December.
Import prices increased 1.3% in February while import prices excluding oil increased 0.4%. Export prices increased 1.6% in February while export prices excluding agriculture increased 1.5%.
Aside from the FOMC Rate Decision, investors will receive Housing Starts and Building Permits for February and the MBA Mortgage Applications Index on Wednesday.
Russell 2000 +17.5% YTD
Dow Jones Industrial Average +7.3% YTD
S&P 500 +5.5% YTD
Nasdaq Composite +4.5% YTD
Market Snapshot
Dow 32825.95 -127.51 (-0.39%)
Nasdaq 13471.58 +11.86 (0.09%)
SP 500 3962.71 -6.23 (-0.16%)
10-yr Note +1/32 1.596
NYSE Adv 1118 Dec 2106 Vol 986.4 mln
Nasdaq Adv 1210 Dec 2801 Vol 5.4 bln
Industry Watch
Strong: Information Technology, Communication Services
Weak: Energy, Financials, Industrials, Materials
Moving the Market
-- S&P 500 and Nasdaq give up early gains
-- Cyclical stocks lag while growth stocks pare gains as interest rates come off lows
-- February retail sales weaker than expected, industrial production unexpectedly declines in February
Crude futures settle below $65 per barrel
16-Mar-21 15:25 ET
Dow -95.69 at 32857.77, Nasdaq +28.81 at 13488.53, S&P -1.34 at 3967.60
[BRIEFING.COM] The S&P 500 is trading slightly below its flat line, while the Russell 2000 continues to struggle with a 1.8% decline amid profit-taking interest.
One last look at the S&P 500 sectors shows energy (-2.3%), financials (-1.1%), and industrials (-1.1%) down more than 1.0%, while the communication services (+1.1%) and information technology (+1.0%) sectors trade higher by at least 1.0%.
WTI crude futures settled lower by 0.9%, or $0.59, to $64.81/bbl.