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A trio of record closes to end the strong week
05-Feb-21 16:15 ET

Dow +92.38 at 31148.24, Nasdaq +78.55 at 13856.30, S&P +15.09 at 3886.83

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

[BRIEFING.COM] The S&P 500 (+0.4%), Nasdaq Composite (+0.6%), and Russell 2000 (+1.4%) set intraday and closing record highs on Friday to cap off an impressive week for the stock market. The Dow Jones Industrial Average (+0.3%) underperformed with a 0.3% gain.

Prior to the open, investors received the January employment report, which was underwhelming but painted the case in Washington for more fiscal stimulus. Briefly, nonfarm payrolls increased by 49,000 (Briefing.com consensus 50,000) following a 227,000 decline in December, and the unemployment rate improved to 6.3% (Briefing.com consensus 6.7%) from 6.7% in December.

Right out of the gate, the cyclical sectors and small-cap stocks assumed the early leadership, partly due to stimulus-induced growth optimism and positive momentum, but the gains were relatively broad-based. The S&P 500 materials (+1.7%), communication services (+1.0%), and energy (+0.9%) sectors finished atop the leaderboard.

The information technology (-0.2%) restrained the broader advance and was the only sector that closed lower today.

Earnings reports for the fourth quarter continued to exceed expectations, with shares of Snap (SNAP 63.64, +5.33, +9.1%), Activision Blizzard (ATVI 101.61, +8.93, +9.6%), and Estee Lauder (EL 272.81, +19.76, +7.8%) reacting positively to the good news. T-Mobile US (TMUS 125.28, -5.32, -4.1%) and Peloton (PTON 148.30, -9.23, -5.9%) closed lower following their reports.

Separately, the House passed a budget resolution that unlocks a budget reconciliation process for the next stimulus package. The stimulus bill would only need a simple majority to pass, and lawmakers will reportedly spend the next few weeks drafting its contents.

The U.S. Treasury yield curve continued to steepen, caused by selling pressure in longer-dated maturities and demand for shorter-dated ones. The 10-yr yield increased three basis points to 1.17%, while the 2-yr yield decreased two basis points to 0.09%. The U.S. Dollar Index fell 0.6% to 90.99. WTI crude futures increased 1.2%, or $0.69, to $56.89/bbl.

Reviewing Friday's economic data:

January nonfarm payrolls increased by 49,000 (Briefing.com consensus 50,000). January private sector payrolls increased by 6,000 (Briefing.com consensus 60,000). January unemployment rate was 6.3% (Briefing.com consensus 6.7%), versus 6.7% in December. The average workweek in January was 35.0 hours (Briefing.com consensus 34.7), versus 34.7 hours in December.
The key takeaway from the report is that it will paint the case in Washington for more stimulus.
The December Trade Balance Report showed a narrowing in the trade deficit to -$66.6 billion (Briefing.com consensus -$65.7 billion) from a downwardly revised -$69.0 billion (from -$68.1 billion) in November.
The key takeaway from the report is found in the annual summary for 2020, which indicates the goods and services deficit widened to $678.7 billion from $576.9 billion in 2019. Exports of goods decreased by $217.7 billion while imports decreased by $166.2 billion, underscoring the global demand drop-off amid the pandemic.
Consumer credit increased by $9.7 bln in December after increasing a downwardly revised $13.9 bln (from $15.3 bln) in November.
The key takeaway from the report is that revolving credit decreased for the ninth time over the last ten months dating back to February, which preceded the initial pandemic lockdown period taking hold in the U.S.

Investors will not receive any notable economic data on Monday.

Russell 2000 +13.1% YTD
Nasdaq Composite +7.5% YTD
S&P 500 +3.5% YTD
Dow Jones Industrial Average +1.8% YTD


Market Snapshot
Dow 31148.24 +92.38 (0.30%)
Nasdaq 13856.30 +78.55 (0.57%)
SP 500 3886.83 +15.09 (0.39%)
10-yr Note -2/32 1.171

NYSE Adv 2126 Dec 1059 Vol 938.0 mln
Nasdaq Adv 2559 Dec 1321 Vol 6.6 bln


Industry Watch
Strong: Energy, Materials, Communication Services, Communication Services, Consumer Staples

Weak: Information Technology


Moving the Market
-- S&P 500, Nasdaq, and Russell 2000 set intraday and closing record highs

-- Lackluster January employment report fed into the view for more fiscal stimulus

-- Positive momentum



WTI crude futures extend weekly gains
05-Feb-21 15:30 ET

Dow +88.68 at 31144.54, Nasdaq +66.94 at 13844.69, S&P +14.88 at 3886.62
[BRIEFING.COM] The S&P 500 is trading higher by 0.4% and is on track to close at a fresh record high.

One last look at the sector performances shows materials (+1.8%) outperforming after it was the only sector that closed lower yesterday. The information technology sector (-0.3%) finds itself as the today's lone sector holdout.

WTI crude futures settled higher by 1.2%, or $0.69, to $56.89/bbl. Crude futures rose 9.0% this week.