Sector Investing

[ReturntoSender]

Stock market rises despite tepid bank results
14-Apr-20 16:20 ET
Dow +558.99 at 23949.76, Nasdaq +323.32 at 8515.74, S&P +84.43 at 2846.06

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

[BRIEFING.COM] It was a good day for the stock market on Tuesday, as investors expressed optimism in an economic recovery despite the uncertainty signaled by some of the nation's most influential banks. The Nasdaq Composite rose 4.0%, pulling ahead of the S&P 500 (+3.1%), Dow Jones Industrial Average (+2.4%), and Russell 2000 (+2.1%), for its fourth straight advance.

JPMorgan Chase (JPM 95.50, -2.69, -2.7%) and Wells Fargo (WFC 30.18, -1.25, -4.0%) kicked off the Q1 earnings reporting season with underwhelming quarterly results, but more relevantly, they stirred some concern by substantially increasing their provisions for credit losses. The latter represented the challenges the companies are preparing for given the unprecedented circumstances.

The stock market wasn't concerned with uncertainty today, though, as it remained comforted in the notion that the economy will strategically reopen through a coordinated plan from federal and state officials. In addition, better-than-feared trade data for March out of China may have also aided investor sentiment.

The S&P 500 consumer discretionary (+4.2%) and information technology (+4.2%) sectors outperformed on the back of strong gains from Amazon (AMZN 2283.32, +114.45, +5.3%), Apple (AAPL 287.05, +13.80, +5.1%), and Microsoft (MSFT 173.70, +8.19, +5.0%). The health care sector (+3.3%) was led higher by Johnson & Johnson (JNJ 146.03, +6.26, +4.5%) following its quarterly results.

It appeared, then, that only the financials (+0.3%) and energy (-0.5%) sectors today reflected underlying concerns many investors still have with the economy. The energy space was specifically pressured by a 10% drop in oil prices ($20.22/bbl, -$2.20, -9.8%), as the industry remained burdened by the lack of meaningful oil demand despite the upcoming production cuts.

U.S. Treasuries held firm despite the bullish price action in the stock market. The 2-yr yield declined one basis point to 0.22%, and the 10-yr yield was unchanged at 0.75%. The U.S. Dollar Index declined 0.5% to 98.85.

Tuesday's economic data was limited to Import and Export Prices for March: import prices declined 2.3%, while prices, excluding oil, were unchanged. Export prices declined 1.6% in March, and prices, excluding agriculture, declined 1.5%.

Looking ahead, investors will receive a deluge of reports on Wednesday: Retail Sales for March, Industry Production and Capitalization Utilization for March, the Empire State Manufacturing Index for April, the NAHB Housing Market Index for April, the weekly MBA Mortgage Applications Index, Business Inventories for February, and Net Long-Term TIC Flows for February.

Nasdaq Composite -5.1% YTD
S&P 500 -11.9% YTD
Dow Jones Industrial Average -16.1% YTD
Russell 2000 -25.8% YTD

Market Snapshot
Dow 23949.76 +558.99 (2.39%)
Nasdaq 8515.74 +323.32 (3.95%)
SP 500 2846.06 +84.43 (3.06%)
10-yr Note +24/32 0.747
NYSE Adv 2195 Dec 726 Vol 1.2 bln
Nasdaq Adv 2278 Dec 942 Vol 3.7 bln

Industry Watch
Strong: Consumer Discretionary, Information Technology
Weak: Financials, Energy

Moving the Market

-- Stock market closes firmly higher amid a positive sentiment regarding the economy

-- JPMorgan Chase (JPM) and Wells Fargo (WFC) substantially increase provisions for credit losses, shares fall

-- Strength in mega-cap technology stocks

-- Oil prices drop 10% amid persistent demand problems

WTI crude futures fall 10%
14-Apr-20 15:25 ET
Dow +483.64 at 23874.41, Nasdaq +307.87 at 8500.29, S&P +76.73 at 2838.36

[BRIEFING.COM] The S&P 500 is up 2.8%, while the Russell 2000 underperforms with a 1.7% gain.

One last look at the S&P 500 sectors shows consumer discretionary (+3.9%), consumer staples (+3.8%), and information technology (+3.7%) leading the market in gains, while the energy (-0.7%) and financials (-0.3%) sectors trade lower.

WTI crude futures settled down a disappointing $2.20 (-9.8%) to $20.22/bbl, as the market remained burdened by the lack of oil demand despite the upcoming production cuts.