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Stock Market Update

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

Market Snapshot
Dow 34035.85 +304.96 (0.90%)
Nasdaq 14038.79 +180.92 (1.31%)
SP 500 4170.45 +45.79 (1.11%)
10-yr Note +30/32 1.546
NYSE Adv 2051 Dec 1164 Vol 849.0 mln
Nasdaq Adv 2037 Dec 2036 Vol 4.3 bln

Industry Watch
Strong: Information Technology, Health Care, Communication Services
Weak: Energy, Financials

Moving the Market

-- S&P 500 and Dow set all-time highs in continuation of bullish trend

-- Strong retail sales data for March, weekly initial claims drop below 600,000 for its lowest level since the pandemic began

-- Long-term interest rates drop noticeably despite the economic data

Bull market keys off economic data, lower rates
15-Apr-21 16:15 ET
Dow +304.96 at 34035.85, Nasdaq +180.92 at 14038.79, S&P +45.79 at 4170.45

[BRIEFING.COM] The S&P 500 (+1.1%), Dow Jones Industrial Average (+0.9%), and Nasdaq 100 (+1.6%) set intraday and closing record highs on Thursday, as the 10-yr yield dropped 11 basis points to 1.53% despite a batch of better-than-expected economic data. The Nasdaq Composite rose 1.3%. The Russell 2000 increased just 0.4%.

Prior to the open, retail sales soared 9.8% m/m in March (Briefing.com consensus +5.3%), weekly initial claims dropped by 193,000 to 576,000 (Briefing.com consensus 695,000), the Philadelphia Fed Index for April checked in at 50.2 (Briefing.com consensus 35.0), and the Empire State Manufacturing Survey for April checked in at 26.3 (Briefing.com consensus 23.0).

Granted, the futures market had already established a positive bias even before the data was released, partially due to a prevailing bullish sentiment and better-than-expected earnings reports. The data strengthened the cause, but more notably, buying interest accelerated in the Treasury market, driving longer-dated yields sharply lower.

Longer-dated yields typically move higher when investors feel better about the economic outlook, or expect an increase in inflation, but today they continued their monthly downtrend despite the data supporting the growth outlook. The nosedive in long-term rates suggested short-covering activity was a contributing factor.

As expected, the mega-cap/growth/technology stocks benefited from the lower rates, but the gains were relatively broad with nine of the 11 S&P 500 sectors closing in positive territory. The information technology (+1.8%), health care (+1.7%), and real estate (+2.0%) sectors rose more than 1.5%. The energy (-0.9%) and financials (-0.1%) sectors closed lower.

UnitedHealth (UNH 390.01, +14.38, +3.8%) was a major contributor in the health care sector after beating top and bottom-line estimates and raising its FY21 EPS guidance. The financials sector featured better-than-expected earnings reports from Bank of America (BAC 38.74, -1.14, -2.9%) and Citigroup (C 72.53, -0.38, -0.5%).

The inability of the financials sector to rally around earnings news was largely due to the curve-flattening activity in the Treasury market. BlackRock (BLK 817.84, +16.77, +2.1%) provided offsetting support, though, after reporting that assets under management rose 39% yr/yr to $9 trillion. BLK also beat revenue estimates.

The 2-yr yield decreased one basis point to 0.14%. The U.S. Dollar Index decreased 0.1% to 91.62. WTI crude futures increased 0.4%, or $0.28, to $63.44/bbl.

Reviewing Thursday's huge batch of economic data:

March retail sales soared 9.8% m/m (Briefing.com consensus 5.3%) following an upwardly revised 2.7% decline (from -3.0%) in February. Excluding autos, they were up 8.4% m/m (Briefing.com consensus 4.9%) following an upwardly revised 2.5% decline (from -2.7%) in February.
The key takeaway from the report is that there was a clear rebound from some of the "frozen" activity in February, the arrival of stimulus checks, and pent-up demand that was plain to see in double-digit percentage gains across various discretionary spending categories like food services and drinking places (+13.4%).
Initial jobless claims for the week ending April 10 declined by 193,000 to 576,000 (Briefing.com consensus 695,000). Continuing claims for the week ending April 3 increased 4,000 to 3.731 million.
The key takeaway from the report is that initial claims were the lowest they have been since the pandemic started; moreover, they finally dropped in a material manner that is consistent with the reopening (and rehiring) narrative feeding expectations of strong economic growth.
Total industrial production increased 1.4% m/m in March (Briefing.com consensus 2.9%) following a downwardly revised 2.6% decline (from -2.2%) in February. The capacity utilization rate increased to 74.4% (Briefing.com consensus 75.9%) from a downwardly revised 73.4% (from 73.8%) in February.
The key takeaway from the report is that it suggests the downturn in February was primarily a weather-driven downturn, although March could have been a bit stronger for industrial production if not for the ongoing shortage of semiconductors that continued to hold down vehicle production.
The Philadelphia Fed Index increased to 50.2 in April (Briefing.com consensus 35.0) from a downwardly revised 44.5 (from 51.8) in March.
The Empire State Manufacturing Survey increased to 26.3 in April (Briefing.com consensus 23.0) from 17.4 in March.
The NAHB Housing Market Index increased to 83.0 in April (Briefing.com consensus 84.0) from 82.0 in March.
Business inventories increased 0.5% m/m in February, as expected, following an upwardly revised 0.4% increase (from 0.3%) in January.

Looking ahead, investors will receive Housing Starts and Building Permits for March and the preliminary University of Michigan Index of Consumer Sentiment for April on Friday.

Russell 2000 +14.3% YTD
Dow Jones Industrial Average +11.2% YTD
S&P 500 +11.0% YTD
Nasdaq Composite +8.9% YTD

WTI crude futures settle slightly higher
15-Apr-21 15:30 ET
Dow +256.57 at 33987.46, Nasdaq +145.30 at 14003.17, S&P +37.34 at 4162.00

[BRIEFING.COM] The S&P 500 is up 0.9% and well on track to close at another record high. The same goes for the Dow (+0.8%).

One last look at the S&P 500 sector performances shows nine trading higher and two trading lower. The health care (+1.7%), information technology (+1.5%), real estate (+1.5%), and communication services (+1.1%) sectors are in the lead with gains over 1.0%; conversely, the energy (-1.1%) and financials (-0.4%) sectors trade lower.

WTI crude futures settled higher by 0.4%, or $0.28, to $63.44/bbl.
NVIDIA rallying to all-time highs amid analyst upgrade