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Shortened Week Ends on Higher Note
09-Apr-20 16:20 ET
Dow +285.80 at 23719.37, Nasdaq +62.67 at 8153.57, S&P +39.84 at 2789.82

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

[BRIEFING.COM] The stock market climbed to end the holiday-shortened week, but the Thursday affair saw some intraday volatility. The S&P 500 gained 1.5%, extending this week's advance to 12.1% while the Nasdaq (+0.8%) underperformed but still gained 10.6% for the week.

The market climbed out of the gate after the release of another horrific weekly initial claims report was masked by news of more unprecedented action from the Fed to help none of the 16 million people who got fired over the past three weeks. Of course, the Fed would protest that direct support is not in its mandate, but neither is the ability to purchase junk bond ETFs or collateralized debt obligations, which can now be acquired by the Fed. The central bank also added another $2.30 trln in emergency lending capacity for businesses and municipalities. Fed Chairman, Jay Powell, said that the central bank will continue using its powers forcefully, proactively, and aggressively.

In Europe, the Bank of England announced that it will begin directly financing the U.K.'s fiscal needs while German Chancellor, Angela Merkel, rejected Italy's demand for the issuance of joint euro debt.

Also of note, the Japanese government will reportedly spend up to $2.20 bln to help Japanese manufacturers move their production facilities out of China.

Equities backpedaled from their highs in the afternoon, but ten out of eleven sectors were able to finish in the green. The gains were paced by groups like financials (+5.2%), real estate (+5.2%), and utilities (+4.8%).

The top-weighted technology sector (UNCH) lagged, which was also the case earlier in the week. The sector climbed 10.6% for the week while chipmakers also underperformed today. The PHLX Semiconductor Index lost 2.3%, narrowing this week's gain to 11.0%.

Costco (COST 300.01, -5.96, -2.0%) reported a 12.1% jump in domestic comparable sales in March, but its stock finished lower since the market had already priced in strong March sales.

The energy sector (-1.1%) turned negative in the afternoon amid volatility in crude oil. That volatility followed conflicting headlines from the OPEC+ meeting, where producers struggled to agree to a large output cut. The Wall Street Journal reported in the late afternoon that daily output in May and June will be reduced by ten million barrels. Crude oil ended the day lower by $2.30, or 9.1%, at $22.87/bbl.

Treasuries finished near their highs, sending the 10-yr yield lower by four basis points to 0.73%.

The U.S. Dollar Index fell 0.6% to 99.50, widening this week's loss to 1.0%.

Reviewing today's economic data:

It was another dismal initial claims report, with 6.606 million jobless claims filed for the week ending April 4 (Briefing.com consensus 5.000 million), bringing the three-week total to 16,780,000 after revisions. Continuing claims for the week ending March 28 hit a record high 7.455 million
The key takeaway from the jobless claims data is that the number of filings is simply astounding and a true sign of the vast impact of the sudden economic stop. Unfortunately, it likely still doesn't capture the fullness of the impact as it's reasonable to assume that the system for filing claims is overwhelmed and not facilitating every effort to file for jobless benefits
The preliminary reading for the University of Michigan's Consumer Sentiment Index for April plummeted to 71.0 (Briefing.com consensus 79.3) from 89.1 in March. This is the largest monthly decline on record
The key takeaway from the report is that the more modest decline in the Expectations Index captures a feeling that the impact of the COVID-19 cases and death rates could soon peak, allowing for a restart of the economy
The Producer Price Index for final demand declined 0.2% m/m in March (Briefing.com consensus -0.4%). Core PPI was up 0.2% (Briefing.com consensus -0.1%)
The key takeaway from the report is that it doesn't fully reflect the impact of the COVID-19 shutdown measures as the pricing date for the survey was March 10
Wholesale inventories decreased by 0.7% in February (Briefing.com consensus -0.4%) after decreasing a revised 0.6% (from -0.4%) in January

There is no data scheduled for Monday.

Nasdaq Composite -9.1% YTD
S&P 500 -13.7% YTD
Dow Jones Industrial Average -16.9% YTD
Russell 2000 -25.3% YTD

Market Snapshot
Dow 23719.37 +285.80 (1.22%)
Nasdaq 8153.57 +62.67 (0.77%)
SP 500 2789.82 +39.84 (1.45%)
10-yr Note +9/32 0.729
NYSE Adv 2495 Dec 418 Vol 1.51 bln
Nasdaq Adv 2502 Dec 735 Vol 4.10 bln

Industry Watch
Strong: Financials, Real Estate, Utilities, Industrials
Weak: Health Care, Consumer Staples, Technology, Communication Services

Moving the Market

Continued volatility in crude oil

Federal Reserve to provide additional $2.30 trln in emergency lending

Crude Oil Ends Sharply Lower
09-Apr-20 15:25 ET
Dow +255.31 at 23688.88, Nasdaq +21.70 at 8112.60, S&P +32.06 at 2782.04

[BRIEFING.COM] The S&P 500 trades higher by 1.2% with 30 minutes remaining in the session. The index is on track to gain 11.8% for the week.

Crude oil ended today's pit session lower by $2.30, or 9.1%, at $22.87/bbl after a sharp reversal from its session high at $28.36/bbl. The energy sector, meanwhile, is down 2.3%.

The pullback in oil took place as OPEC+ could not agree to an output reduction, though the meeting is continuing at this time.