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Market Snapshot

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

Dow 34382.13 +360.68 (1.06%)
Nasdaq 13430.01 +304.99 (2.32%)
SP 500 4173.85 +61.35 (1.49%)
10-yr Note -2/32 1.661
NYSE Adv 2666 Dec 632 Vol 851.7 mln
Nasdaq Adv 3206 Dec 768 Vol 4.0 bln

Industry Watch
Strong: Energy, Information Technology, Consumer Discretionary
Weak: Health Care, Utilities, Consumer Staples

Moving the Market

-- Stocks end week on high note as investors followed through on dip-buying mentality

-- Market overlooked soft retail sales data for April, drop in consumer sentiment for May, and higher import/export prices for April

-- Treasury market appeared unconcerned by inflation expectations

Stocks end week on a high note
14-May-21 16:15 ET
Dow +360.68 at 34382.13, Nasdaq +304.99 at 13430.01, S&P +61.35 at 4173.85

[BRIEFING.COM] The S&P 500 rose 1.5% on Friday in a steady and broad-based advance, as investors followed through on yesterday's dip-buying efforts. The Nasdaq Composite (+2.3%) and Russell 2000 (+2.5%) rose more than 2.0% while the Dow Jones Industrial Average increased 1.1%.

The stock market appeared to take its cue from the Treasury market's apparent lack of concern for inflation expectations, with buying interest fueled by a fear of missing out on further gains as the S&P 500 further distanced itself from its 50-day moving average (4064). The latter has been a level that's rewarded buyers over the past 13 months.

Every sector in the S&P 500 closed higher, advancing issues outpaced declining issues by noticeable margins at the NYSE and Nasdaq, and the speculative growth stocks joined in on the action after sitting out of yesterday's advance. The energy sector (+3.2%) was the top-performing sector in the S&P 500 while the information technology sector (+2.1%) was the most influential.

Rising inflation expectations adversely impacted consumer sentiment in May, according to the University of Michigan's Index of Consumer Sentiment, which dropped to 82.8 (Briefing.com consensus 90.2) in the preliminary reading from the final reading of 88.3 for April. On a related note, import and export prices continued to increase in April.

Typically, longer-dated Treasury yields go up, and prices go down, when economic data supports inflation expectations. Instead, the 10-yr yield decreased three basis points to 1.64% in a similar trading reaction to yesterday's hot PPI data. Conveniently, the lower rates worked in favor of the growth stocks.

The 2-yr yield decreased one basis point to 0.14%. The U.S. Dollar Index decreased 0.5% to 90.32. WTI crude futures increased 2.4%, or $1.51, to $65.33/bbl. The CBOE Volatility Index (18.81, -4.32, -18.7%) fell below 20.00.

Separately, total retail sales were flat m/m in April (Briefing.com consensus +1.8%) following an upwardly revised 10.7% increase (from 9.8%) in March. The stock marked overlooked the relatively disappointing miss due to the tough sequential comparison and expectations that consumer spending should pick up with continued reopening activity.

In earnings-based reactions, shares of Walt Disney (DIS 173.73, -4.61, -2.6%) and Coinbase (COIN 258.37, -6.73, -2.5%) closed lower following their earnings reports, while Airbnb (ABNB 141.20, +5.45, +4.0%) and DoorDash (DASH 141.07, +25.58, +22.2%) closed higher in response. DASH stood out with a 22% gain.

Reviewing Friday's economic data:

Total retail sales were flat month-over-month in April (Briefing.com consensus +1.8%) following an upwardly revised 10.7% increase (from 9.8%) in March. Excluding autos, retail sales declined 0.8% (Briefing.com consensus +1.2%) following an upwardly revised 9.0% increase (from 8.4%) in March.
The key takeaway from the report is that the "weakness" was really driven by a tough sequential comparison; moreover, the market won't be too concerned by the "miss," knowing that hiring activity is going to increase, that wages will likely increase, and that there is a huge amount of personal savings at the ready to spend in coming months.
The preliminary May reading for the University of Michigan Index of Consumer Sentiment dropped to 82.8 (Briefing.com consensus 90.2) from the final reading of 88.3 for April.
The key takeaway from the report is that consumer attitudes were adversely impacted by inflation expectations, which were captured in the highest expected year-ahead inflation rate (4.6%) and the highest expected long-term inflation rate (3.1%) in the last ten years.
Total industrial production increased 0.7% m/m in April (Briefing.com consensus 0.7%) following an upwardly revised 2.4% increase (from 1.4%) in March. The capacity utilization rate increased to 74.9% (Briefing.com consensus 75.1%) from an unchanged 74.4% in March.
The key takeaway from the report is that it suggests industrial production is running at a solid clip, although it would be stronger if not for the semiconductor supply shortage that is holding back motor vehicle production.
Import prices were up 0.7% month-over-month in April and up 0.7% as well, excluding fuel. Export prices increased 0.8% month-over-month in April and were up 0.9%, excluding agricultural exports
Business inventories increased 0.3% m/m in March (Briefing.com consensus 0.3%) following an upwardly revised 0.6% increase (from +0.5%) in February.

Looking ahead, investors will receive the Empire State Manufacturing Survey for May, the NAHB Housing Market Index for May, and Net Long-Term TIC Flows for March on Monday.

Russell 2000 +12.7% YTD
Dow Jones Industrial Average +12.3% YTD
S&P 500 +11.1% YTD
Nasdaq Composite +4.2% YTD

WTI crude futures rise and boost energy stocks
14-May-21 15:25 ET
Dow +402.36 at 34423.81, Nasdaq +315.35 at 13440.37, S&P +66.41 at 4178.91

[BRIEFING.COM] The S&P 500 is still up 1.6% on the back of gains across all of its 11 sectors. The Russell 2000 is up 2.4%.

One last look at the S&P 500 sectors shows energy (+3.1%) up 3%, followed by 2% gains in the information technology (+2.3%) and consumer discretionary (+1.9%) sectors. The health care sector (+0.5%) is lagging with a 0.5% gain.

WTI crude futures settled higher by 2.4%, or $1.51, to $65.33/bbl.