Sector Investing

[ReturntoSender]

Stocks Surge to End Wild Week
13-Mar-20 16:20 ET
Dow +1985.00 at 23185.62, Nasdaq +672.43 at 7874.23, S&P +230.31 at 2711.02

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

[BRIEFING.COM] The stock market rebounded on Friday, though the advance still left the major averages deep in the red for the week. The S&P 500 rallied 9.3%, narrowing this week's loss to 8.8% while the Russell 2000 (+7.7%; -16.6% for the week) underperformed.

Stocks jumped out of the gate after equity futures hit a circuit breaker, but this time, it was to the upside. The early rally set expectations for a strong rebound, but the bulk of the cash session was not as inspiring. The first three hours of trade saw a pullback, during which the S&P 500 approached yesterday's closing level. The index returned to its starting mark in midday trade, but regrouped and staged a huge 6.7% rally in the last 30 minutes as the president was discussing measures to deal with the coronavirus.

Lawmakers in Washington neared an agreement on some fiscal relief measures while President Trump declared a national emergency during a late-afternoon speech. The declaration will allow up to $50 bln in spending. Separately, the president said interest on student loans will be waived until further notice and that the U.S. will be purchasing oil to fill the Strategic Petroleum Reserve.

All eleven sectors ended on their highs, which masked intraday volatility. The CBOE Volatility Index (VIX 57.83, -17.64, -23.4%) climbed above yesterday's high before pulling back, indicating the presence of expectations for a continuation of a bumpy ride.

Financials (+13.2%) were at the forefront of today's advance, narrowing this week's loss to 9.8%. The Federal Reserve conducted another emergency liquidity operation, offering to buy Treasury securities of different maturities throughout the day to alleviate significant stress in the Treasury market, which caused bid/ask spreads on longer tenors to widen notably. Treasuries ended the day on a mostly lower note with the 10-yr yield rising ten basis points to 0.95%.

The top-weighted technology sector (+12.0%) also outperformed with Apple (AAPL 277.97, +29.74, +12.0%) rising amid reports that the company's stores in China have reopened. The PHLX Semiconductor Index (+10.9%) finished a bit ahead of the sector thanks to gains in all 30 components. Broadcom (AVGO 234.22, +15.44, +7.1%) missed Q1 expectations and withdrew its guidance for FY20 but recovered its loss during the market's late rally.

The energy sector (+8.8%) was among the weakest performers, trimming this week's loss to 24.3%, which still left the group well behind the other sectors. The sector backed down from its starting high alongside a pullback in crude oil, which ended the day higher by $0.23, or 0.7%, at $31.80/bbl after hitting a session high of $33.87/bbl.

Reviewing today's economic data:

Import prices declined 0.5% month-over-month in February and were up 0.3% excluding fuel. Export prices were down 1.1%, and down 1.0% excluding agricultural products. On a year-over-year basis, import prices were down 1.2%, and down 0.7% excluding fuel. Export prices were down 1.3% yr/yr, and down 1.6% excluding agricultural products.
The key takeaway from the report is that inflation is still missing for the most part in terms of both import and export prices.
The preliminary March reading for the University of Michigan's Index of Consumer Sentiment showed a drop to 95.9 (Briefing.com consensus 96.0) from the final reading of 101.0 for February.
The key takeaway from the report is that sentiment has been shaken by the spread of the coronavirus and the sharp decline in stock prices, both of which are weighing on expectations that should translate into lower levels of consumer spending activity.

Monday's economic data will be limited to the 8:30 ET release of the Empire State Manufacturing Survey (prior 12.9) and Net Long-Term TIC Flows at 16:00 ET (prior $85.60 bln).

Nasdaq Composite -12.2% YTD
S&P 500 -16.1% YTD
Dow Jones Industrial Average -18.8% YTD
Russell 2000 -27.5% YTD

Market Snapshot
Dow 23185.62 +1985.00 (9.36%)
Nasdaq 7874.23 +672.43 (9.34%)
SP 500 2711.02 +230.31 (9.28%)
10-yr Note -1 6/32 0.951
NYSE Adv 2536 Dec 352 Vol 2.01 bln
Nasdaq Adv 2443 Dec 878 Vol 4.61 bln

Industry Watch
Strong: Financials, Information Technology
Weak: Energy, Utilities, Health Care

Moving the Market

-- Stocks recoup some losses from yesterday's awful day but are trading near session lows

-- Global central banks step up stimulus/liquidity efforts

-- Fiscal relief package reportedly close to being reached

President Trump Expected to Speak Soon
13-Mar-20 15:25 ET
Dow +902.15 at 22102.87, Nasdaq +280.87 at 7482.68, S&P +103.29 at 2583.93

[BRIEFING.COM] The S&P 500 is higher by 3.8%, trading about 50 points below its session high.

President Trump is expected to declare a national coronavirus emergency during an address from the White House. The address was scheduled to begin at 15:00 ET.

Crude oil climbed $0.23, or 0.7%, to $31.80/bbl today, but fell nearly $10.00, or 23.0%, for the week. The energy sector (+1.8%) continues holding a portion of its gain, but it is set to end the week behind the remaining ten sectors with a loss of 29.2%.