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Mega-caps resume the leadership in Monday rally
12-Oct-20 16:20 ET
Dow +250.62 at 28837.46, Nasdaq +296.32 at 11876.19, S&P +57.09 at 3534.22

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

[BRIEFING.COM] The S&P 500 rose 1.6% on Monday in a steady advance driven by the mega-cap stocks. The Nasdaq Composite outperformed with a 2.6% gain, while the Dow Jones Industrial Average (+0.9%) and Russell 2000 (+0.7%) underperformed with gains under 1.0%.

Apple (AAPL 124.42, +7.45, +6.4%) and Amazon (AMZN 3442.93, +156.28, +4.8%) stood out with impressive gains in anticipation of their iPhone 12 and Prime Day events on Tuesday. Those were the attributed catalysts, but the stimulus impasse in Washington may have also contributed to the transition of recent leadership to the mega-caps from the cyclical stocks.

Accordingly, the S&P 500 information technology (+2.7%), communication services (+2.4%), and consumer discretionary (+2.2%) sectors, which are home to the mega-caps, finished atop the sector standings. No other sector outperformed the benchmark index, and the materials sector (-0.2%) closed lower.

Briefly recapping the latest on stimulus, House Democrats and Senate Republicans rejected the $1.8 trillion offer from the White House for different reasons. Based on the relatively broad-based advance in the market, investors presumably remained in agreement that a deal will eventually be reached, either under the current administration or new leadership in 2021.

The financials sector (+1.1%), undeterred by the lack of deal, had a solid outing ahead of earnings reports from several big banks tomorrow morning. Elsewhere, PepsiCo (PEP 142.13, +3.69, +2.7%) was upgraded to Buy from Neutral at Citigroup, and Twilio (TWLO 329.72, +23.48, +7.7%) agreed to acquire Segment for approximately $3.2 billion in stock.

With the U.S. Treasury market closed for Columbus Day, commentary mainly focused on the bullish price action in equities. Consequently, it's reasonable to believe that a fear of missing out on further gains was another factor that fueled the positive momentum in the market. The S&P 500 closed within 1.5% of its all-time high.

WTI crude futures fell 3.1%, or $1.26, to $39.34/bbl. The U.S. Dollar Index finished flat at 93.05.

Investors did not receive any economic data on Monday. Looking ahead, the Consumer Price Index for September, the Treasury Budget for September, and the NFIB Small Business Optimism Index for September are scheduled for Tuesday. Note, the September Treasury Budget is often delayed to allow more time for fiscal year end reconciliation.

Nasdaq Composite +32.4% YTD
S&P 500 +9.4% YTD
Dow Jones Industrial Average +1.1% YTD
Russell 2000 -1.2% YTD

Market Snapshot
Dow 28837.46 +250.62 (0.88%)
Nasdaq 11876.19 +296.32 (2.56%)
SP 500 3534.22 +57.09 (1.64%)
10-yr Note 0/32 0.777
NYSE Adv 1821 Dec 1176 Vol 746.8 mln
Nasdaq Adv 1956 Dec 1333 Vol 3.8 bln

Industry Watch
Strong: Information Technology, Consumer Discretionary, Communication Services
Weak: Materials, Energy

Moving the Market

-- Apple (AAPL) and Amazon (AMZN) set the leadership pace ahead of iPhone 12, Prime Day events tomorrow

-- Stimulus impasse in Washington helped mega-caps regain leadership from the cyclical stocks

-- Momentum trading, fear of missing out

WTI crude futures lose 3% in value
12-Oct-20 15:25 ET
Dow +312.51 at 28899.35, Nasdaq +324.26 at 11904.13, S&P +65.57 at 3542.70

[BRIEFING.COM] The S&P 500 is up 1.9% and has extended its October gain to 5.4% and yearly gain to 9.7%.

One last look at the S&P 500 sectors shows information technology (+2.8%), communication services (+2.7%), and consumer discretionary (+2.3%) up more than 2.0%, while the materials sector (-0.01%) trades fractionally below its flat line.

WTI crude futures settled lower by 3.1%, or $1.26, to $39.34/bbl.