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Market Snapshot

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

Dow 34113.23 +238.38 (0.70%)
Nasdaq 13895.15 -67.56 (-0.48%)
SP 500 4192.66 +11.49 (0.27%)
10-yr Note +2/32 1.606

NYSE Adv 2244 Dec 1036 Vol 888.5 mln
Nasdaq Adv 2215 Dec 1853 Vol 4.6 bln


Industry Watch
Strong: Energy, Materials, Health Care, Industrials

Weak: Consumer Discretionary, Communication Services, Information Technology, Real Estate


Moving the Market
-- Market closes mostly higher, but Nasdaq closes lower amid relative weakness in growth stocks

-- April ISM Manufacturing PMI misses expectations, but prices component rises to highest level since 2008

-- Various/conflicting narratives and consolidation activity





Mixed and conflicting session
03-May-21 16:15 ET

Dow +238.38 at 34113.23, Nasdaq -67.56 at 13895.15, S&P +11.49 at 4192.66
[BRIEFING.COM] The S&P 500 increased 0.3% on Monday in a session marked by various narratives and consolidation activity. The Dow Jones Industrial Average (+0.7%) and Russell 2000 (+0.5%) outpaced the benchmark index, while the Nasdaq Composite declined 0.5% despite a positive open.

To start, the ISM Manufacturing Index for April decelerated to 60.7% (Briefing.com consensus 65.3%) from 64.7% in March, supporting the "peak growth" narrative that partially explained last Friday's decline. The Prices component within the index, meanwhile, reached its highest level since 2008 at 89.6%, corroborating inflation expectations and an observation from Warren Buffett.

Neither of these narratives, however, were completely supported by the market today. For example, the cyclical energy (+2.9%), materials (+1.5%), and industrials (+1.0%) sectors were among the top performers today, reflecting growth/reopening optimism. Inflation concerns, and conversely growth optimism, were dismissed by the gains in longer-dated Treasuries.

Growth stocks underperformed, particularly those within the S&P 500 information technology (-0.2%), consumer discretionary (-0.7%), and communication services (-0.4%) sectors. The Philadelphia Semiconductor Index declined 1.2%.

Specifying Warren Buffett's observation, he said in Berkshire Hathaway's (BRK.B 279.18, +4.23, +1.5%) annual shareholder meeting over the weekend that his businesses are seeing "substantial inflation" and that they're raising prices in response to the higher costs they are incurring. On a related note, Fed Chair Powell said in a speech today that inflation remained under control.

Evidently, it was easy to cherry pick data to support certain claims while using other data to refute such claims. One could even have pointed to the negative performance in the Nasdaq as early evidence for the "sell in May, go away" mantra.

From a broader viewpoint, Monday's price action remained consistent with consolidation activity. The S&P 500 has essentially made no progress since the close on April 16.

In the Treasury market, the 10-yr yield decreased two basis points to 1.61%, and the 2-yr yield decreased one basis point to 0.15%. The U.S. Dollar Index decreased 0.4% to 90.96. WTI crude futures rose 1.5%, or $0.98, to $64.49/bbl.

Reviewing Monday's economic data:

The ISM Manufacturing Index for April decelerated to 60.7% (Briefing.com consensus 65.3%) from 64.7% in March. A number above 50.0% connotes an expansion in manufacturing activity. April marked the eleventh straight month of expansion.
The key takeaway from the report for many will be the understanding that the Prices component jumped to 89.6% from 85.9% and sits at its highest level since 2008. All 18 industries reported paying higher prices for raw materials for the fourth straight month.
Total construction spending increased by 0.2% m/m in March (Briefing.com consensus 1.6%) after declining an upwardly revised 0.6% (from 0.8%) in February. Total private construction rose 0.7% m/m while total public construction spending decreased 1.5%.
The key takeaway from the report is the ongoing strength in private residential construction spending, which is a byproduct of strong demand driven by a scarce supply of existing homes for sale.
The final IHS Market Manufacturing PMI for April checked in at 60.5%, fractionally lower from the 60.6% preliminary reading.

Looking ahead, investors will receive the Trade Balance Report for March and Factory Orders for March on Tuesday.

Russell 2000 +15.3% YTD
S&P 500 +11.6% YTD
Dow Jones Industrial Average +11.5% YTD
Nasdaq Composite +7.8% YTD



WTI crude futures settle higher, fuel energy stocks
03-May-21 15:25 ET

Dow +267.55 at 34142.40, Nasdaq -56.06 at 13906.65, S&P +15.10 at 4196.27
[BRIEFING.COM] The S&P 500 continues to trade modestly higher by 0.4% amid gains in most sectors.

One last look at the S&P 500 sectors shows energy (+2.9%), materials (+1.8%), industrials (+1.1%), health care (+1.1%), and consumer staples (+1.0%) outperforming with gains of at least 1.0%. Conversely, the consumer discretionary (-0.6%), real estate (-0.5%), communication services (-0.3%), and information technology (-0.2%) sectors lag.

WTI crude futures settled lower higher by 1.5%, or $0.98, to $64.49/bbl.