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S&P 500 ekes out gain amid cyclical leadership
11-Sep-20 16:20 ET
Dow +131.06 at 27655.64, Nasdaq -66.05 at 10853.55, S&P +1.78 at 3340.97

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

[BRIEFING.COM] The S&P 500 increased 0.1% on this 19th anniversary of 9/11 but continued selling in the mega-caps limited the upside. The Dow Jones Industrial Average gained 0.5%, while the Nasdaq Composite (-0.6%) and Russell 2000 (-0.7%) closed lower.

Similar to the days before, today's price action was technically-oriented given the absence of market-moving news and the losses in stocks like Apple (AAPL 112.00, -1.49, -1.3%), Amazon (AMZN 3116.22, -58.89, -1.9%), and Microsoft (MSFT 204.03, -1.34, -0.7%) on no specific corporate news. Apple shares fell 7.4% this week.

The difference today was that their losses were offset by relative strength in the cyclical sectors, namely industrials (+1.4%), materials (+1.3%), and financials (+0.8%). Still, when Apple and Amazon are down more than 1.0%, there must be more winners than losers to make a meaningful difference.

There were more of the latter on Friday, as declining issues outpaced advancing issues at the NYSE and Nasdaq. The information technology (-0.8%), consumer discretionary (-0.3%), and communication services (-0.3%) sectors ended the day in negative territory due to their exposure to the mega-cap stocks.

Interestingly, the S&P 500 was down as much as 0.9% intraday and fell below its 50-day moving average (3322). A broad rebound in the afternoon, however, helped the benchmark index turn positive and close above the key technical level.

Shares of Oracle (ORCL 57.00, -0.33, -0.6%), Peloton (PTON 84.04, -3.71, -4.2%), and Kroger (KR 34.37, -0.37, -1.1%) finished lower following their earnings reports. Note, ORCL shares were up as much as 7.9%, and PTON shares were up as much as 11.8%.

U.S. Treasuries finished on a higher note. The 2-yr yield declined one basis point to 0.13%, and the 10-yr yield declined two basis points to 0.67%. The U.S. Dollar Index declined 0.1% to 93.28. WTI crude futures increased 0.2%, or $0.07, to $37.34/bbl.

Reviewing Friday's economic data:

Total CPI increased 0.4% m/m in August (Briefing.com consensus +0.3%) while core CPI, which excludes food and energy, also rose 0.4% (Briefing.com consensus +0.2%). The gains in August left total CPI up 1.3% yr/yr and core CPI up 1.7% yr/yr.
The key takeaway from the report, which featured the largest increase in the index for used cars and trucks (+5.4%) since March 1969, is that the increase in the all items index was broad-based; nonetheless, annual inflation rates are still running well below 2.0%, so there is still more noise than bothersome policy signal in the August report.
The Treasury Budget showed a $200.1 bln deficit in August. The budget data is not seasonally adjusted, so the August deficit cannot be compared to the July deficit of $63.0 bln. The deficit in August 2019 was $200.3 bln.
The key takeaway from the report is that while outlays and receipts showed little yr/yr change in August, the year-to-date deficit climbed above $3 trillion.

There are no notable economic reports scheduled for Monday.

Nasdaq Composite +21.0% YTD
S&P 500 +3.4% YTD
Dow Jones Industrial Average -3.1% YTD
Russell 2000 -10.3% YTD