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Market Snapshot

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

Dow 34511.99 +549.95 (1.62%)
Nasdaq 14498.87 +223.89 (1.57%)
SP 500 4323.08 +64.59 (1.52%)
10-yr Note -1/32 1.200
NYSE Adv 2652 Dec 547 Vol 1.1 bln
Nasdaq Adv 2396 Dec 940 Vol 4.5 bln

Industry Watch
Strong: Financials, Industrials, Real Estate
Weak: Consumer Staples

Moving the Market

-- Investors bought the dip, boosting major indices to gains of at least 1.5%

-- IBM (IBM) reported positive earnings results

-- 10-yr yield settled at 1.21% after dipping below 1.14% followed mixed housing starts and building permits data for June

-- Technical factors and a fear of missing out on a sustained rebound rally

Stocks mount rebound rally
20-Jul-21 16:15 ET
Dow +549.95 at 34511.99, Nasdaq +223.89 at 14498.87, S&P +64.59 at 4323.08

[BRIEFING.COM] The major indices rallied by at least than 1.5% on this "turnaround Tuesday," as investors bought Monday's dip and sold longer-dated Treasuries. The Russell 2000 was the outright winner with a 3.0% gain, followed by the Dow Jones Industrial Average (+1.6%), Nasdaq Composite (+1.6%), and S&P 500 (+1.5%).

The market seemed to be operating on the assumption that conditions were favorable for bounce, especially after the S&P 500 successfully retested its 50-day moving average (4242) yesterday. Others believed the Russell 2000 had entered correction territory too quickly and that value/cyclical stocks had gotten oversold on a short-term basis.

The rebound gains were distributed across ten of the 11 S&P 500 sectors, including industrials (+2.7%) and financials (+2.4%) with gains over 2.0%. Advancing issues outpaced advanced issues by a 5:1 margin at the NYSE. The consumer staples sector (-0.1%) bucked the positive trend.

IBM (IBM 139.97, +2.05, +1.5%) reported better-than-expected earnings results, which may have instilled hope that other technology companies will follow in IBM's footsteps throughout the rest of the earnings season. Apple (AAPL 146.16, +3.70, +2.6%) drew additional support from a price-target increase to $166 from $155 at UBS.

Some companies like HCA Healthcare (HCA 248.90, +31.27, +14.4%) and Dover (DOV 162.14, +10.17, +6.7%) also felt confident enough to issue upbeat guidance, although it's worth mentioning that PPG Industries (PPG 158.49, -7.26, -4.4%) warned it will likely continue to see supply disruptions in Q3. Travelers (TRV 151.09, -0.17, -0.1%) closed lower despite beating EPS estimates.

The warning from PPG was presumably because of the coronavirus, but the extent of today's gains and some curve-steepening activity in the Treasury market seemed to suggest that some of the growth/coronavirus concerns have been overstated.

The 10-yr yield increased three basis points to 1.21% after dipping below 1.14% immediately following mixed housing starts and building permits data for June. Housing starts were better than expected while permits, which are a leading indicator, declined 5.1% m/m to a seasonally adjusted annual rate of 1.598 million (Briefing.com consensus 1.700 million).

The 2-yr yield decreased two basis points to 0.19% while the 30-yr yield rose five basis points to 1.87%. The U.S. Dollar Index increased 0.1% to 92.95. WTI crude futures rose 1.4%, or $0.90, to $67.32/bbl. The CBOE Volatility Index (19.73, -2.77, -12.3%) slipped below 20.00.

Reviewing Tuesday's economic data:

Total housing starts rose 6.3% month-over-month to a seasonally adjusted annual rate of 1.643 million (Briefing.com consensus 1.600 million). Building permits declined 5.1% month-over-month to a seasonally adjusted annual rate of 1.598 million (Briefing.com consensus 1.700 million).
The key takeaway from the report is that permits -- a leading indicator -- declined across all regions for single-family units, suggesting there will be a slowdown in building activity that could be related to a variety of factors, including higher costs, a lack of available labor, and/or high selling prices curtailing buyer demand.

Looking ahead, investors will receive the weekly MBA Mortgage Applications Index on Wednesday.

S&P 500 +15.1% YTD
Dow Jones Industrial Average +12.8% YTD
Nasdaq Composite +12.5% YTD
Russell 2000 +11.1% YTD

Oil prices find some relief
20-Jul-21 15:25 ET
Dow +628.58 at 34590.62, Nasdaq +271.31 at 14546.29, S&P +76.21 at 4334.70

[BRIEFING.COM] The S&P 500 is up 1.8% and on track to close above last Friday's close.

One last look at the sectors standings shows industrials (+2.9%), financials (+2.8%), information technology (+2.0%), and real estate (+2.0%) up at least 2.0% while the consumer staples sector (+0.1%) trades higher by just 0.1%.

WTI crude futures settled higher by 1.4%, or $0.90, to $67.32/bbl.