Technology Outperforms on Tuesday
22-Dec-20 16:15 ET
Dow -200.94 at 30015.45, Nasdaq +65.40 at 12807.92, S&P -7.66 at 3687.26 https://www.briefing.com/stock-market-update
[BRIEFING.COM] The stock market ended Tuesday on a mixed note, as the S&P 500 (-0.2%) and Dow (-0.7%) finished in the red while the Nasdaq (+0.5%) and Russell 2000 (+1.0%) outperformed.
The Tuesday session unfolded inside a narrow range, keeping the S&P 500 near its flat line throughout the day. Nine out of eleven sectors finished in negative territory, but their losses were largely offset by relative strength in the top-weighted technology sector (+0.9%).
Roughly half of the group's components recorded gains, but Apple (AAPL 131.88, +3.65, +2.9%) was mostly responsible for the daylong outperformance. The largest stock by market cap continued climbing after yesterday's reports indicated that the company is developing an autonomous electric car. Today's rally left the stock within ten points of its September high.
High-beta chipmakers underperformed with the PHLX Semiconductor Index (-0.1%) widening this week's loss to 0.8%, but the weakness had a limited impact on the broader tech sector.
Energy (-1.7%) and communication services (-1.0%) finished at the bottom of the leaderboard. The energy sector continued its recent show of relative weakness (-3.5% week-to-date) while crude oil fell $0.79, or 1.7%, to $47.00/bbl.
The market received just a couple quarterly reports since yesterday's closing bell. Most notably, CarMax (KMX 92.33, -8.13, -8.1%) fell below its 50-day moving average (93.74) to a fresh December low after its Q3 beat was overshadowed by softening demand trends in the latter part of the quarter.
In other news, Walmart (WMT 144.20, -1.77, -1.2%) fell to a six-week low after the Department of Justice sued the retail giant over its role in the opioid crisis.
Longer-dated Treasuries recorded modest gains while the 2-yr ended flat. The 10-yr yield fell two basis points to 0.92%.
Today's trading volume was below average as roughly 900 mln shares changed hands at the NYSE floor.
Reviewing today's economic data:
Existing home sales decreased 2.5% m/m in November to a seasonally adjusted annual rate of 6.69 million (Briefing.com consensus 6.80 million). November marked the first time in six months that existing home sales did not increase on a month-over-month basis. Total sales in November were up 25.8% from a year ago.
The key takeaway from the report is that the supply of existing homes is at an all-time low. That is going to be a pressure point that feeds higher prices, shuts out an increasing number of first-time buyers, and bolsters the prospects for new home sales.
The Conference Board's Consumer Confidence Index dropped to 88.6 in December (Briefing.com consensus 96.5) from a downwardly revised 92.9 (from 96.1) in November.
The key takeaway from the report is the bump seen in the Expectations Index, as it fits the narrative of a market that has been quick to look past the dire headlines about the surge of coronavirus cases in favor of the vaccine remedy that will run continuously in the months ahead.
The third estimate for Q3 GDP produced a slight upward revision to 33.4% (Briefing.com consensus 33.1%) that was attributed primarily to larger increases in personal consumption expenditures and nonresidential fixed investment. The GDP Price Deflator was revised down to 3.5% (Briefing.com consensus 3.6%) from 3.6%.
The key takeaway from the report is the same as it always is with the third estimate for quarterly GDP, which is that there is no new meaningful takeaway for the market given the report's dated nature. To that end, we're less than two weeks away from completing the fourth quarter and this is a revised third quarter report.
The weekly MBA Mortgage Index (prior 1.1%) will be reported tomorrow at 7:00 ET, followed by November Personal Income (Briefing.com consensus -0.2%; prior -0.7%), Personal Spending (Briefing.com consensus -0.2%; prior 0.5%, PCE Prices (Briefing.com consensus 0.2%; prior 0.0%), and core PCE Prices (Briefing.com consensus 0.2%; prior 0.0%) at 8:30 ET along with Initial Claims (Briefing.com consensus 860K; prior 885K) and Continuing Claims (prior 5.508M). The December FHFA Housing Price Index (prior 1.7%) will be released at 9:00 ET while November New Home Sales (Briefing.com consensus 990,000; prior 999,000) and the final December Michigan Consumer Sentiment Survey (Briefing.com consensus 80.5; prior 81.4) will be reported at 10:00 ET.
Nasdaq Composite +42.7% YTD
Russell 2000 +19.2% YTD
S&P 500 +14.1% YTD
Dow Jones Industrial Average +5.2% YTD
Dow 30015.45 -200.94 (-0.67%)
Nasdaq 12807.92 +65.40 (0.51%)
SP 500 3687.26 -7.66 (-0.21%)
10-yr Note +7/32 0.918
NYSE Adv 1330 Dec 1790 Vol 909.3 mln
Nasdaq Adv 2029 Dec 1680 Vol 5.60 bln
Strong: Technology, Utilities, Real Estate
Weak: Consumer Discretionary, Industrials, Energy, Communication Services
Moving the Market
-- President Trump expected to sign stimulus bill and federal budget soon
-- Focus remains on new coronavirus strain in the U.K.
Inching to the Close
22-Dec-20 15:25 ET
Dow -182.83 at 30033.56, Nasdaq +54.12 at 12796.55, S&P -7.88 at 3687.05
[BRIEFING.COM] The S&P 500 remains lower by 0.2% going into the final 30 minutes of action.
Crude oil finished today's pit session with a $0.79, or 1.7%, loss, at $47.00/bbl, falling toward yesterday's low (46.18). The energy sector, meanwhile, has widened its loss to 1.4%. The group has fallen 3.2% this week.
Longer-dated Treasuries finished today's session at their best levels of the day, sending the 10-yr yield lower by two basis points to 0.92%.