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Stocks fall on political uncertainty, trade and growth concerns
24-Sep-19 16:20 ET
Dow -142.22 at 26807.77, Nasdaq -118.84 at 7993.62, S&P -25.18 at 2966.64

https://www.briefing.com/stock-market-update

[BRIEFING.COM] U.S. stocks fell on Tuesday, as investors shunned risk following a decline in consumer confidence, a hard-lined speech from President Trump, and growing calls for the president's impeachment. The S&P 500 (-0.8%) and Dow Jones Industrial Average (-0.5%) declined less than 1%, while the Nasdaq Composite (-1.5%) and Russell 2000 (-1.6%) underperformed amid weakness in the technology and energy stocks.

It was a wild ride to say the least. Stocks opened higher, lifting the S&P 500 up as much as 0.5% and back above the 3000 level, amid news that China was purchasing more U.S. soybeans and Treasury Secretary Mnuchin confirming trade talks will resume in two weeks. None of these developments was particularly surprising.

That advance proved short-lived as stocks began an orderly retreat following a weaker-than-expected consumer confidence report for September and President Trump's speech at the UN General Assembly. In his speech, President Trump delivered tough-sounding remarks on China and Iran, particularly outlining China's dishonesty and warning countries to not subsidize Iran's "blood lust."

Selling accelerated, sending the major averages well into negative territory by midday, after reports surfaced that House Speaker Nancy Pelosi was planning to formally announce an impeachment inquiry on President Trump at 5:30 p.m. ET. Mr. Trump said he will release a full unredacted transcript of his conversation with Ukraine's President Volodymyr Zelensky.

The S&P 500 energy sector (-1.6%) led the sectors in losses as oil prices ($57.32, -1.30, -2.3%) weakened. The communication services sector (-1.3%) and the trade-sensitive Philadelphia Semiconductor Index (-1.7%) showed relative weakness after a strong start. The defensive-oriented utilities (+1.0%) and consumer staples (+0.2%) sectors were the lone sectors to finish in positive territory.

Notable laggards included FAANG components Facebook (FB 181.28, -5.54, -3.0%), Amazon (AMZN 1741.61, -43.69, -2.5%), and Netflix (NFLX 254.59, -11.33, -4.3%). An earnings miss from AutoZone (AZO 1096.63, -50.63, -4.4%) weighed on the stock.

U.S. Treasuries resumed their recent advance amid the political uncertainty and concerns about trade and growth. The 2-yr yield declined six basis points to 1.61%, and the 10-yr yield declined seven basis points to 1.64%. Interestingly, the 10-yr yield is now down 27 basis points from its high on Sept. 13. The U.S. Dollar Index fell 0.3% to 98.32.

Reviewing Tuesday's economic data, which included the Conference Board's Consumer Confidence Index for September, the FHFA Housing Price Index for July, and the S&P Case-Shiller Home Price Index for July:

The Conference Board's Consumer Confidence Index for September dropped to 125.1 (Briefing.com consensus 134.0) from a downwardly revised 134.2 (from 135.1) in August.
The key takeaway from the report is that it reflects burgeoning anxiety among consumers about the impact of tariffs and trade tension. That hasn't translated into a retrenchment in consumer spending yet. If confidence continues to wane, though, the market will start to assume it is going to show up in weaker levels of discretionary spending activity, which would be bad for growth prospects.
The FHFA Housing Price Index for July increased 0.4% following an unrevised 0.2% increase in June.
The S&P Case-Shiller Home Price Index for July increased 2.0% (Briefing.com consensus of 2.3%) following a revised 2.2% increase in June (from 2.1%).

Looking ahead, investors will receive New Home Sales for August and the weekly MBA Mortgage Applications on Wednesday.

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