Market led higher by Apple and stimulus hopes
15-Dec-20 16:15 ET
Dow +337.76 at 30199.25, Nasdaq +155.02 at 12594.97, S&P +47.13 at 3694.63 https://www.briefing.com/stock-market-update
[BRIEFING.COM] The large-cap indices advanced more than 1.0% on Tuesday, predominately due to the influence of Apple (AAPL 127.88, +6.10, +5.0%) and renewed stimulus optimism. The Russell 2000 closed at a record high with a 2.4% gain, followed by the S&P 500 (+1.3%), Nasdaq Composite (+1.3%), and Dow Jones Industrial Average (+1.1%).
Early in the session, Apple was the main driver of things after the Nikkei reported that the company plans to increase iPhone production by 30% yr/yr in the first half of 2021. With a $2.17 trillion market capitalization, the stock's 5% appreciation was an undeniable force for the major indices.
From a more macro-related perspective on today's action, the recovery narrative creeped back into the market on word of a stimulus meeting involving Congressional leadership at 4:00 p.m. ET. Hopes for a deal guided the cyclical and value stocks to leadership roles and nudged Treasury yields higher.
The energy (+1.9%), materials (+1.9%), and financials (+1.7%) sectors were among the biggest gainers in the S&P 500, which happened to snap a benign four-session losing streak today. The consumer staples sector (+0.2%) increased the least.
Investors didn't get too carried away, though, considering the potential to be upset by the outcome of today's stimulus meeting while others preferred to wait for the conclusion of the FOMC policy meeting tomorrow.
In the health care space, Eli Lilly (LLY 167.34, +9.43, +6.0%) stood out with an impressive 6% gain. The company issued upside guidance for FY20 and FY21, increased its quarterly dividend by 15%, and agreed to acquire Prevail Therapeutics (PRVL 22.75, +10.25, +82.0%) for $22.50 per share, or about $1 billion, in cash.
U.S. Treasuries finished on a lower note, particularly longer-dated maturities since shorter-dated maturities remained anchored by the Fed. The 2-yr yield increased one basis point to 0.12%, and the 10-yr yield increased three basis points to 0.92%. The U.S. Dollar Index declined 0.3% to 90.45. WTI crude futures rose 1.3%, or $0.59, to $47.59/bbl.
Reviewing Wednesday's economic data:
Industrial production increased 0.4% m/m in November (Briefing.com consensus 0.3%) following a downwardly revised 0.9% increase (from 1.1%) in October. The capacity utilization rate jumped to 73.3% (Briefing.com consensus 73.0%) from an upwardly revised 73.0% (from 72.8%) in October.
The key takeaway from the report was the robust growth seen in the production of motor vehicles and parts, which increased 5.3% and helped account for 0.4 percentage points of the 0.8% increase in manufacturing output.
Import prices increased 0.1% in November; and prices excluding oil decreased 0.3%. Export prices increased 0.6% in November; and prices excluding agriculture increased 0.3%.
Looking ahead to Thursday, investors will receive Retail Sales for November, the preliminary IHS Markit Manufacturing and Services PMIs for December, the NAHB Housing Market Index for December, Business Inventories for October, the weekly MBA Mortgage Applications Index, and the FOMC Rate Decision.
Nasdaq Composite +40.4% YTD
Russell 2000 +17.5% YTD
S&P 500 +14.4% YTD
Dow Jones Industrial Average +5.8% YTD
Dow 30199.25 +337.76 (1.13%)
Nasdaq 12594.97 +155.02 (1.25%)
SP 500 3694.63 +47.13 (1.29%)
10-yr Note -1/32 0.910
NYSE Adv 2346 Dec 761 Vol 923.7 mln
Nasdaq Adv 2523 Dec 1122 Vol 4.3 bln
Strong: Utilities, Energy, Materials, Financials, Information Technology
Weak: Consumer Staples
Moving the Market
-- Apple (AAPL) rose 5% on report that it's planning to increase iPhone production by 30% in first half of 2021
-- Cyclical, value, and small-cap stocks outperformed ahead of a key stimulus meeting at 4:00 p.m. ET (market close)
-- Russell 2000 closes at fresh record high
Oil prices rise again, help energy stocks
15-Dec-20 15:30 ET
Dow +319.73 at 30181.22, Nasdaq +139.90 at 12579.85, S&P +43.28 at 3690.78
[BRIEFING.COM] The S&P 500 is trading higher by 1.2% while the Russell 2000 is up 2.2% and has a good chance to close at a record high.
One last look at the sector performances shows six sectors up by at least 1.0%, including utilities (+1.9%), materials (+1.8%), energy (+1.7%), and financials (+1.6%) at the top. No sector is trading lower, but the consumer staples sector lags with a 0.2% gain.
WTI crude futures settled the session higher by 1.3%, or $0.59, to $47.59/bbl. The increase in oil futures has benefited energy stocks today.