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Market Snapshot

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

Dow 35443.82 +131.29 (0.37%)
Nasdaq 15331.17 +21.80 (0.14%)
SP 500 4536.95 +12.86 (0.28%)
10-yr Note 0/32 1.299
NYSE Adv 2076 Dec 1134 Vol 797.6 mln
Nasdaq Adv 2807 Dec 1605 Vol 3.9 bln

Industry Watch
Strong: Energy, Industrials, Health Care
Weak: Communication Services, Information Technology, Consumer Discretionary

Moving the Market

-- S&P 500 and Nasdaq set record highs but close off session highs

-- Weekly initial and continuing claims continued to improve

-- Value stocks outperformed growth stocks

Value kind-of-day
02-Sep-21 16:15 ET
Dow +131.29 at 35443.82, Nasdaq +21.80 at 15331.17, S&P +12.86 at 4536.95

[BRIEFING.COM] The S&P 500 (+0.3%) and Nasdaq Composite (+0.1%) eked out intraday and closing record highs on Thursday, although they closed off session highs amid softness in the growth stocks. The Dow Jones Industrial Average increased 0.4% while the Russell 2000 increased 0.7%.

Unlike yesterday, today was more of a value-oriented session amid continued improvement in the weekly initial and continuing claims report. Both readings decreased to their lowest levels since the start of the pandemic, with initial claims checking in at 340,000 (Briefing.com consensus 348,000).

The shift into "value" was best manifested in the 0.6% gain in the Russell 1000 Value Index, which was better than the gains in the S&P 500 and Nasdaq. The S&P 500 energy (+2.5%) and industrials (+1.0%) sectors -- two cyclical groups often lumped into the value category -- were pockets of strength.

The energy sector was impressive with a 2.5% gain, largely due to the 2% gain in oil prices ($69.96/bbl, +1.41, +2.1%). WTI crude futures settled close to $70.00 per barrel.

Conversely, the Russell 1000 Growth Index closed flat and the Vanguard Mega Cap Growth ETF (MGK 248.98, -0.32, -0.1%) decreased 0.1%. The S&P 500 information technology (-0.1%), communication services (-0.7%), and consumer discretionary (-0.1%) sectors -- which contain the mega-cap stocks -- were the only sectors that closed lower.

The mega-caps had been hitting record highs on an almost regular basis recently, so their underperformance today likely had more to do with a breather than anything else. Low interest rates remained a supportive factor for the growth stocks.

The Treasury market held steady ahead of the August employment report tomorrow. The 2-yr yield was unchanged at 0.21%, and the 10-yr yield decreased one basis point to 1.29%. The U.S. Dollar Index decreased 0.2% to 92.23.

Separately, Hormel Foods (HRL 43.57, -2.10, -4.6%) was one of the biggest laggards in the S&P 500 after providing an underwhelming earnings report. HRL shares declined 4.6%.

Reviewing Thursday's economic data:

For the week ending August 28, initial claims decreased by 14,000 to 340,000 (Briefing.com consensus 348,000), which is the lowest level since March 14, 2020. Continuing claims for the week ending August 21 decreased by 160,000 to 2.748 million, which is also the lowest level since March 14, 2020.
The key takeaway from the report is the same as before: the trend is moving in a direction that is suggestive of an improving labor market.
The trade deficit for July narrowed to $70.1 billion (Briefing.com consensus -$74.0 billion) from an upwardly revised $73.2 billion (prior -$75.7 billion) in June. The narrowing was the result of July exports being $2.8 billion more than June exports, and July imports being $0.4 billion less than June imports.
The key takeaway from the report is that the real trade deficit in July was slightly narrower than the average real trade deficit for Q2. That will compute as a positive input for Q3 GDP forecasts.
Factory orders for manufactured goods increased 0.4% m/m in July, as expected, following a 1.5% increase in June. Shipments of manufactured goods were up 1.6% after increasing 1.9% in June.
The key takeaway from the report is that the pace of order growth for manufactured goods slowed noticeably in July, which is emblematic of headwinds created by the Delta variant and supply chain bottlenecks.
Q2 productivity was revised down to 2.1% (Briefing.com consensus 2.5%) from the advance estimate of 2.3% and unit labor costs were revised up to 1.3% (Briefing.com consensus 0.8%) from the advance estimate of 1.0%.
The downward revision to productivity is a bit disappointing, but it won't resonate as a market-moving factor knowing that we are two-thirds of the way through the third quarter.

Looking ahead, investors will receive the Employment Situation Report for August, the ISM Non-Manufacturing Index for August, and the final IHS Markit Services PMI for August on Friday.

S&P 500 +20.8% YTD
Nasdaq Composite +19.0% YTD
Russell 2000 +16.7% YTD
Dow Jones Industrial Average +15.8% YTD

Crude futures settle close to $70 per barrel
02-Sep-21 15:30 ET
Dow +62.43 at 35374.96, Nasdaq +3.13 at 15312.50, S&P +3.93 at 4528.02

[BRIEFING.COM] The S&P 500 is up 0.1%, and the Russell 2000 is up 0.7%.

One last look at the sector performances shows energy (+2.5%) up 2.5% and the only sector up more than 1.0%. The communication services (-0.7%), information technology (-0.2%), and consumer discretionary (-0.2%) sectors trade lower and hold the market back.

WTI crude futures settled higher by 2.1%, or $1.41, to $69.96/bbl.