Sector Investing

[ReturntoSender]

Market Snapshot

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

Dow 35369.09 -74.73 (-0.21%)
Nasdaq 15363.51 +32.34 (0.21%)
SP 500 4535.43 -1.52 (-0.03%)
10-yr Note -5/32 1.322
NYSE Adv 1333 Dec 1868 Vol 702.9 mln
Nasdaq Adv 1794 Dec 2525 Vol 3.65 bln

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

Moving the Market

August jobs report misses headline estimates but average hourly earnings beat expectations

Dow Jones continues this week's underperformance

Nasdaq Tags Another Record
03-Sep-21 16:15 ET
Dow -74.73 at 35369.09, Nasdaq +32.34 at 15363.51, S&P -1.52 at 4535.43

[BRIEFING.COM] The stock market ended a quiet week on a mixed note, as the S&P 500 (-0.03%) and Dow (-0.2%) ticked lower while the Nasdaq (+0.2%) hit another new closing record. Small caps underperformed, sending the Russell 2000 lower by 0.5%.

Today's action unfolded inside a 20-point range in the S&P 500 even though the Employment Situation report for August was mixed relative to estimates. The headline reading missed expectations by a country mile (actual 235,000; Briefing.com consensus 750,000) while average hourly earnings increased 0.6% m/m, twice the expected pace, giving some new fodder to the tapering debate.

Stocks slipped out of the gate, but the S&P 500 was quick to find support near its closing level from Wednesday. The benchmark index recovered the bulk of its opening 15-point loss during the opening hour and continued inching higher as the day went on.

The top-weighted technology sector (+0.4%) held a modest gain throughout the day while health care (+0.1%), communication services (+0.1%), real estate (+0.04%), and consumer discretionary (+0.01%) turned positive as the day went on. The technology sector's strength prevented the S&P 500 from falling deeper into the red in early trade and it helped with the daylong rebound.

Chipmakers were responsible for the early strength in technology after Broadcom (AVGO 497.68, +5.78, +1.2%) beat Q3 expectations and issued strong guidance for Q4. Broadcom helped the PHLX Semiconductor Index (+0.6%) narrow this week's loss to 0.2% while top tech components Apple (AAPL 154.30, +0.65, +0.4%) and Microsoft (MSFT 301.14, -0.01, unch) were mixed.

In other tech earnings, Hewlett Packard Enterprise (HPE 15.48, +0.09, +0.6%) touched its best level since mid-June after beating Q3 EPS expectations and issuing in-line guidance for FY21 while MongoDB (MDB 507.41, +105.76, +26.3%) soared to a fresh record after beating Q2 expectations and issuing above-consensus guidance for FY22.

On the downside, utilities (-0.8%) finished at the bottom of the leaderboard while materials (-0.7%), industrials (-0.6%), financials (-0.6%), and energy (-0.5%) ended with slimmer losses. The financials sector widened this week's loss to 2.5% while energy lost 1.4% for the week. Meanwhile, WTI crude fell $0.72, or 1.0%, to $69.24/bbl, but still gained $0.47, or 0.7%, for the week.

Treasuries revisited this week's highs in immediate reaction to the August jobs report but reversed swiftly to their lowest levels of the week. The 10-yr yield rose three basis points to 1.32%, finishing the day between its 50-day (1.309%) and 200-day moving averages (1.341%).

Today's volume was below average with just over 700 million shares changing hands at the NYSE floor.

Reviewing today's economic data:

August nonfarm payrolls increased by 235,000 (Briefing.com consensus 750,000). The 3-month average for total nonfarm payrolls decreased to 750,000 from 876,000 in July. July nonfarm payrolls revised to 1,053,000 from 943,000 June nonfarm payrolls revised to 962,000 from 938,000.
August private sector payrolls increased by 243,000 (Briefing.com consensus 650,000). July private sector payrolls revised to 798,000 from 703,000. June private sector payrolls revised to 808,000 from 769,000.
August unemployment rate was 5.2% (Briefing.com consensus 5.2%), versus 5.4% in July. Persons unemployed for 27 weeks or more accounted for 37.4% of the unemployed versus 39.3% in July. The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 8.8%, versus 9.2% in July.
August average hourly earnings increased 0.6% (Briefing.com consensus 0.3%) versus a 0.4% increase in July. Over the last 12 months, average hourly earnings have risen 4.3%, versus 4.1% for the 12 months ending in July.
The average workweek in August was 34.7 hours (Briefing.com consensus 34.8), versus a downwardly revised 34.7 hours (from 34.8) in July. Manufacturing workweek decreased 0.2 hours to 40.3 hours. Factory overtime was unchanged at 3.2 hours.
The labor force participation rate was 61.7%, versus 61.7% in July. o The employment-population ratio increased to 58.5% from 58.4% in July.
The ISM Non-Manufacturing Index for August decreased to 61.7% (Briefing.com consensus 62.0%) from a record high 64.1% in July. The dividing line between expansion and contraction is 50.0%. The August reading marks the fifteenth straight month of growth for the services sector.
The key takeaway from the report is the understanding that services sector activity is still running strong notwithstanding the deceleration in growth from the record high reading in July.

Bond and equity markets will be closed on Monday in observance of Labor Day.

S&P 500 +20.8% YTD
Nasdaq Composite +19.2% YTD
Russell 2000 +16.1% YTD
Dow Jones Industrial Average +15.6% YTD

Crude Oil Slips
03-Sep-21 15:30 ET
Dow -42.79 at 35401.03, Nasdaq +33.50 at 15364.67, S&P +3.10 at 4540.05

[BRIEFING.COM] The S&P 500 trades higher by 0.1% with 30 minutes remaining in today's session. The benchmark index is on course to gain 0.7% for the week.

Seven sectors are on course to gain at least 1.0% for the week with real estate (-0.1%; +3.9% week-to-date) leading the way. On the downside, financials (-0.5%; -2.3% week-to-date) and energy (-0.5%; -1.4% week-to-date) are on track to finish at the bottom of this week's leaderboard.