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Mega-caps led market rebound in front of earnings
29-Oct-20 16:15 ET
Dow +139.16 at 26659.05, Nasdaq +180.72 at 11185.52, S&P +39.08 at 3310.11

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

[BRIEFING.COM] The S&P 500 gained 1.2% on Thursday to snap a three-day losing streak in which it fell 5.6%. The Nasdaq Composite increased 1.6%, the Dow Jones Industrial Average increased 0.5%, and the Russell 2000 increased 1.2%.

The primary drivers in today's trade were Apple (AAPL 115.32, +4.12, +3.7%), Amazon (AMZN 3211.01, +48.23, +1.5%), Alphabet (GOOG 1567.24, +50.62, +3.3%), and Facebook (FB 280.83, +13.16, +4.9%) ahead of their earnings reports after the close. Note, these stocks had poor performance yesterday as part of the general weakness in the market, suggesting that today's gains were in part technically-oriented.

To be fair, Pinterest's (PINS 62.51, +13.26, +26.9%) strong earnings report was a supporting factor, as investors hoped that Facebook and Alphabet also benefited from increased advertising spending. The latter two contributed to the outperformance of the S&P 500 communication services sector (+2.9%).

The energy sector (+3.2%) advanced the most, though. The health care sector (-0.7%) was the lone holdout with Abiomed (ABMD 254.61, -28.39, -10.0%) being the weakest component after guiding fiscal Q3 revenue below consensus.

Today's economic data was good for sentiment, even though the initial reaction was muted and the GDP data was considered backward-looking. Q3 GDP increased at a record annualized rate of 33.1% (Briefing.com consensus 30.2%) following a record 31.4% annualized decline in Q2. Weekly initial jobless claims decreased by 40,000 to 751,000 (Briefing.com consensus 763,000).

In other corporate news, Netflix (NFLX 501.21, +17.97, +3.7%) increased its prices for U.S. subscribers, which revived a slumbering stock; Visa (V 184.87, +4.00, +2.2%) beat top and bottom-line estimates; and Marvell (MRVL 38.21, -1.32, -3.3%) agreed to acquire Inphi (IPHI 140.60, +29.63, +26.7%) in a $10 billion deal.

The positive showing in equities decreased interest in U.S. Treasuries and hedging activity. The CBOE Volatility Index fell 6.7% to 37.57. The 2-yr yield finished flat at 0.15%, while the 10-yr yield rose five basis points to 0.84%. The U.S. Dollar Index increased 0.6% to 93.92, which was one headwind for oil prices ($36.13, -1.32, -3.5%).

Reviewing Thursday's economic data:

Q3 GDP increased at a record annualized rate of 33.1% (Briefing.com consensus 30.2%) following a record 31.4% annualized decline in Q2. The Q3 GDP Chair Deflator increased 3.6% (Briefing.com consensus 3.0%) after declining 1.8% in Q2.
The key takeaway from this report is that it was driven by a huge rebound in personal spending, which contributed 25.27 percentage points to the change in GDP. The other key takeaway for a market that is staring at elevated levels of uncertainty looking ahead is that this GDP report, which the market already knew was going to be historically good, is backward looking.
Initial claims for the week ending October 24 decreased by 40,000 to 751,000 (Briefing.com consensus 763,000). Continuing claims for the week ending October 17 decreased by 709,000 to 7.756 million.
The key takeaway from this report is that initial claims are still terribly high. The other key takeaway is that this report is a leading indicator, meaning that the terribly high level of initial claims portends a challenging pace of recovery for the job market.
Pending home sales decreased 2.2% in September (Briefing.com consensus 3.5%) following an unrevised 8.8% increase in October.

Looking ahead to Friday, investors will receive the Personal Income and Spending report for September, the Q3 Employment Cost Index, the Chicago PMI for October, and the final Univ. of Michigan Index of Consumer Sentiment for October.

Nasdaq Composite +24.7% YTD
S&P 500 +2.5% YTD
Dow Jones Industrial Average -6.6% YTD
Russell 2000 -6.4% YTD

Market Snapshot
Dow 26659.05 +139.16 (0.52%)
Nasdaq 11185.52 +180.72 (1.64%)
SP 500 3310.11 +39.08 (1.19%)
10-yr Note -6/32 0.831
NYSE Adv 1993 Dec 1024 Vol 1.0 bln
Nasdaq Adv 2217 Dec 1173 Vol 3.1 bln

Industry Watch
Strong: Energy, Communication Services, Materials
Weak: Health Care, Consumer Staples

Moving the Market

-- Mega-caps led rebound effort ahead of earnings after the close

-- Pinterest (PINS) earnings/guidance was a supporting catalyst in the communication services sector

-- Q3 GDP, weekly claims data were better than expected

WTI crude futures extend recent weakness
29-Oct-20 15:25 ET
Dow +272.77 at 26792.66, Nasdaq +252.60 at 11257.40, S&P +57.09 at 3328.12

[BRIEFING.COM] The S&P 500 continues to trade higher by 1.8% after it struggled to find direction at the open.

One last look at the S&P 500 sectors shows communication services (+3.5%), materials (+2.6%), information technology (+2.5%), and energy (+2.5%) leading the market higher, while the health care sector (-0.1%) is the lone holdout.

Abiomed (ABMD 258.17, -24.76, -8.8%) is the weakest health care component after issuing downside quarterly guidance.

WTI crude futures settled lower by 3.5%, or $1.32, to $36.13/bbl.