Sector Investing

[ReturntoSender]

S&P 500, Dow close at record highs amid conflicting trade headlines
07-Nov-19 16:25 ET
Dow +182.24 at 27674.84, Nasdaq +23.89 at 8434.52, S&P +8.40 at 3085.18

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

[BRIEFING.COM] The stock market rallied to new highs on Thursday after China's Commerce Ministry said it reached an agreement with the U.S. for both sides to phase out tariffs. News of internal strife within the White House about those plans, however, curbed some enthusiasm in the market. The S&P 500 finished near its lows but still added 0.3% to close at a record high.

The Nasdaq Composite (+0.3%) and Russell 2000 (+0.3%) also closed near lows with 0.3% gains. The Dow Jones Industrial Average (+0.7%) outperformed and closed at a record high.

China's announcement was confirmed by an unnamed U.S. official to Bloomberg, but multiple sources familiar with trade talks followed up to Reuters that opposition is based on concerns that the U.S. would give away leverage to Beijing. Considering that China reportedly wants all retaliatory tariffs removed for the "Phase One" deal to get signed, the news understandably created some jitters in the market.

The market has been optimistic, though, and investors still leaned on the side of risk, evident by the outperformance of the cyclical sectors and the sell-off in the U.S. Treasury market. The S&P 500 energy sector (+1.6%) outperformed alongside higher oil prices ($57.11, +0.76, +1.4%), followed by the communication services (+0.7%), information technology (+0.7%), and financials (+0.7%) sectors.

The 2-yr yield rose seven basis points to 1.67%, and the 10-yr yield rose 11 basis points to 1.93%. The U.S. Dollar Index increased 0.2% to 98.13.

This curve-steepening activity benefited the financials sector, but the higher yields undercut buying interest in the rate-sensitive utilities (-1.4%) and real estate (-1.1%) sectors. The consumer discretionary (-0.6%) and consumer staples (-0.4%) sectors were the other two sectors that finished lower.

The trade-sensitive Philadelphia Semiconductor Index increased 0.7%, although it was up as much as 1.8% in the session. The group still outperformed, though, largely due to the positive reaction to Qualcomm's (QCOM 89.98, +5.35, +6.3%) better-than-expected quarterly results.

Separately, the online travel services industry received negative attention after Expedia Group (EXPE 98.29, -37.07, -27.4%) and TripAdvisor (TRIP 31.65, -9.14, -22.4%) provided investors disappointing quarterly results. Ensuing industry concerns undercut shares of Booking Holdings (BKNG 1849.93, -162.16, -8.1%) in front of its earnings report after the close.

Reviewing Thursday's economic data, which included the weekly Initial and Continuing Claims report and the consumer credit report for September:

Initial jobless claims for the week ending November 2 decreased by 8,000 to 211,000 (Briefing.com consensus 217,000). Continuing jobless claims for the week ending October 26 decreased by 3,000 to 1.689 million.
The key takeaway from the report is that it is consistent with a job market that remains on solid footing, which will keep recession concerns at bay.
The Consumer Credit report for September showed an increase of $9.5 billion (Briefing.com consensus $14.0 billion), and August credit growth was unrevised at $17.9 billion.

Looking ahead, investors will receive the preliminary November reading for the University of Michigan's Index of Consumer Sentiment and the Wholesale Inventories report for September on Friday.

Nasdaq Composite +27.1% YTD
S&P 500 +23.1% YTD
Dow Jones Industrial Average +18.6% YTD
Russell 2000 +18.2% YTD

Market Snapshot
Dow 27674.84 +182.24 (0.66%)
Nasdaq 8434.52 +23.89 (0.28%)
SP 500 3085.18 +8.40 (0.27%)
10-yr Note -110/32 1.920
NYSE Adv 1310 Dec 1574 Vol 962.7 mln
Nasdaq Adv 1597 Dec 1519 Vol 2.2 bln

Industry Watch
Strong: Energy, Communication Services, Information Technology, Financials
Weak: Real Estate, Utilities, Consumer Staples, Consumer Discretionary

Moving the Market

-- S&P 500, Dow close at record highs

-- China said it reached an agreement with the U.S. to phase out tariffs, but there is reportedly fierce internal opposition in White House about rolling back tariffs

-- Cyclical sectors outperformed, U.S. Treasuries sold off

WTI crude settles above $57 per barrel
07-Nov-19 15:25 ET
Dow +166.17 at 27658.77, Nasdaq +10.70 at 8421.33, S&P +5.56 at 3082.34

[BRIEFING.COM] The S&P 500 is now up just 0.2% amid some disappointment that there are still road blocks in getting a "Phase One" deal signed.

One last look inside the S&P 500 shows the energy sector (+1.3%) still rising above the rest, followed by the financials sector (+0.7%). Conversely, the utilities (-1.3%) and real estate (-0.9%) sectors remain noticeably lower amid the rise in Treasury yields today.

WTI crude futures settled up $0.76 (+1.4%) to $57.11/bbl.