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Re: ReturntoSender post# 6854

Monday, 05/31/2021 10:53:14 AM

Monday, May 31, 2021 10:53:14 AM

Post# of 12809

Market Snapshot

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

Dow 34529.45 +64.81 (0.19%)
Nasdaq 13748.76 +12.46 (0.09%)
SP 500 4204.11 +3.23 (0.08%)
10-yr Note +2/32 1.582
NYSE Adv 1951 Dec 1309 Vol 1.0 bln
Nasdaq Adv 2234 Dec 1964 Vol 4.4 bln

Industry Watch
Strong: Information Technology, Health Care, Utilities, Real Estate
Weak: Communication Services, Industrials, Materials, Consumer Discretionary

Moving the Market

-- Stock market pares modest gains and closes little changed ahead of Memorial Day weekend

-- Treasury market was not bothered by inflation pressures

-- Speculative trading activity cooled off

Stock market closes flat ahead of Memorial Day weekend
28-May-21 16:20 ET
Dow +64.81 at 34529.45, Nasdaq +12.46 at 13748.76, S&P +3.23 at 4204.11

[BRIEFING.COM] The S&P 500 eked out a 0.1% gain on Friday, as equity investors were comforted by the Treasury market's calm demeanor to further evidence of inflationary pressures. The market, however, did close near session lows due to a flush of selling interest without a news catalyst into the close.

The Nasdaq Composite (+0.1%), Dow Jones Industrial Average (+0.2%), and Russell 2000 (-0.2%) gave up modest gains and closed little changed like the benchmark index.

On inflation, PCE Price Index -- the Fed's preferred inflation gauge -- rose 0.6% m/m in April and was up 3.6% yr/yr. The expected year-ahead inflation rate was a record 4.6% in the final May reading for the University of Michigan Index of Consumer Sentiment. Costco's (COST 378.27, -9.28, -2.4%) CFO said "inflationary factors abound" in the earnings conference call.

Granted, the news didn't come as much surprise since the market had already seen inflation pressures building in previous economic data, business commentary, and higher commodity prices. The takeaway from the 10-yr yield settling lower by three basis points to 1.58% was that the Treasury market still thinks inflation will be transitory.

In turn, the rate-sensitive growth stocks within the S&P 500 information technology sector (+0.3%) garnered some buying interest. Salesforce.com (CRM 238.10, +12.27, +5.4%) provided additional support for the tech sector following its earnings report, helping outweigh the decline in Apple (AAPL 124.61, -0.67, -0.5%), which was downgraded to Sell from Neutral at New Street.

The real estate sector (+0.7%) was the top-performing sector in the S&P 500, though, and the last-minute selling took the communication services (-0.3%), consumer discretionary (-0.2%), materials (-0.2%), and industrials (-0.1%) sectors into the red on a closing basis.

Speculative trading activity was highlighted by the media in the early part of the day, but interest waned as these stocks quickly turned around. The iShares Micro-Cap ETF (IWC 149.58, -0.91, -0.6%) declined 0.6% after starting with a 1.0% gain on top a 4.6% rally over the prior two sessions.

Separately, the White House confirmed details of a $6 trillion FY22 budget proposal, which includes aspects of an already passed COVID-19 relief bill and yet-to-be-passed American Jobs Plan and American Families Plan.

The 2-yr yield was flat at 0.14%. The U.S. Dollar Index increased 0.1% to 90.07. WTI crude futures decreased 0.8%, or $0.54, to $66.32/bbl.

Reviewing Friday's economic data:

Personal income declined 13.1% month-over-month (Briefing.com consensus -15.0%), as the total of stimulus payments made was greatly reduced from March. Personal spending (PCE) increased 0.5% month-over-month (Briefing.com consensus +0.4%), down from an upwardly revised 4.7% (from 4.2%) in March. That's not bad on the surface, but it was a price-driven increase. Real PCE decreased 0.1% in April. The PCE Price Index jumped 0.6% and the core PCE Price Index, which excludes food and energy, rose 0.7%. That left the year-over-year increases for the Fed's preferred inflation gauge at 3.6% (versus 2.4% in March) and 3.1% (versus 1.9% in March), respectively.
The key takeaway from the report should be the high inflation prints, yet the calm manner in which the Treasury market has reacted to the report is apt to make the stock market think the key takeaway is that there is an abiding belief that the high inflation prints will be transient, as the Fed has suggested.
The final May reading for the University of Michigan Index of Consumer Sentiment edged up to 82.9 (Briefing.com consensus 82.8) from the preliminary reading of 82.8. The final reading for April was 88.3. The expected year-ahead inflation rate of 4.6% is the highest on record.
The key takeaway from the report is the acknowledgment that "record proportions of consumers reported higher prices across a wide range of discretionary purchases."
The Chicago PMI increased to 75.2 in May (Briefing.com consensus 67.0) from 72.1 in April.
The Advance report for International Trade in Goods for April showed a deficit of $85.2 billion versus $90.6 billion in March. The Advance report for Retail Inventories for April decreased 1.6%, while the Advance report for Wholesale Inventories for April increased 0.8%.

As a reminder, the market will be closed on Monday for Memorial Day. When the market reopens on Tuesday, investors will receive the ISM Manufacturing Index for May, Construction Spending for April, and the final IHS Markit Manufacturing PMI for May.

Russell 2000 +14.9% YTD
Dow Jones Industrial Average +12.8% YTD
S&P 500 +11.9% YTD
Nasdaq Composite +6.7% YTD

WTI crude futures settle in negative territory
28-May-21 15:25 ET
Dow +110.47 at 34575.11, Nasdaq +43.73 at 13780.03, S&P +10.80 at 4211.68

[BRIEFING.COM] The S&P 500 continues to trade slightly higher by 0.3%. It's traded at these levels for most of the day.

One last look at the S&P 500 sectors shows information technology (+0.6%) and real estate (+0.8%) atop the sector standings with respectable gains, while the communication services (-0.1%), consumer discretionary (unch), and industrials (unch) sectors underperform near their flat lines.

WTI crude futures settled lower by 0.8%, or $0.54, to $66.32/bbl.

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