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Market Snapshot

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

Dow 35545.56 -105.39 (-0.30%)
Nasdaq 15237.63 -175.64 (-1.14%)
SP 500 4634.23 -34.74 (-0.74%)
10-yr Note -3/32 1.441
NYSE Adv 970 Dec 2334 Vol 1.0 bln
Nasdaq Adv 1272 Dec 3298 Vol 4.7 bln

Industry Watch
Strong: Financials
Weak: Information Technology, Real Estate, Industrials

Moving the Market

-- Major indices trade lower but off session lows

-- PPI data for November was hotter than expected

-- Lingering growth/coronavirus concerns

Stocks close lower following hot PPI data
14-Dec-21 16:20 ET
Dow -105.39 at 35545.56, Nasdaq -175.64 at 15237.63, S&P -34.74 at 4634.23

[BRIEFING.COM] The S&P 500 fell 0.8% on Tuesday, as concerns about inflation and economic growth weighed on sentiment during an important Fed policy meeting. The Nasdaq Composite (-1.1%) and Russell 2000 (-1.0%) both underperformed the benchmark index, while the Dow Jones Industrial Average declined just 0.3%.

Prior to the open, the Producer Price Index for November came in hotter than expected, with the index for final demand up 0.8% month-over-month (Briefing.com consensus 0.5%) and up 9.6% year-over-year. The hot inflation report may have put additional pressure on the Fed to announce a faster tapering plan and signal a more hawkish rate path tomorrow.

The market appeared concerned about the implications a more aggressive Fed would have on global growth with COVID-19 still disrupting supply chains and contributing to restrictive policies. Reports indicated that companies in a manufacturing hub in China suspended operations because of an outbreak in cases.

While the market eased off intraday lows in the afternoon, ten of the 11 S&P 500 sectors still closed lower. The information technology sector (-1.6%) led the retreat and featured influential weakness in Apple (AAPL 174.33, -1.41, -0.8%), Microsoft (MSFT 328.34, -11.06, -3.3%) and Adobe (ADBE 614.86, -43.44, -6.6%).

Apple, like Microsoft, succumbed to profit-taking interest, even though BofA Securities upgraded AAPL to Buy from Neutral. ADBE was downgraded to Neutral from Overweight at JP Morgan.

The financials sector (+0.6%) escaped with a respectable gain amid an uptick in Treasury yields. The 2-yr yield increased two basis points to 0.66%, and the 10-yr yield increased one basis point to 1.44%. The U.S. Dollar Index rose 0.3% to 96.58. WTI crude futures fell 0.9%, or $0.67, to $70.57/bbl.

The modest reaction in the Treasury market to the hot inflation data was an interesting development. Selling interest may have been capped by growth concerns and/or a view that a more aggressive Fed could rein in inflation pressures next year.

Separately, Pfizer (PFE 55.54, +0.34, +0.6%) specified its COVID-19 oral antiviral reduced the risk of hospitalization or death in high-risk patients by 89% when taken within three days of symptom onset. PFE shares rose to an all-time high.

Reviewing Tuesday's economic data:

The November Producer Price Index showed that the index for final demand increased 0.8% month-over-month (Briefing.com consensus 0.5%) while the index for final demand, less foods and energy, increased 0.7% (Briefing.com consensus 0.4%). That left the year-over-year increases on an unadjusted basis at 9.6% and 7.7%, respectively.
The key takeaway from the report is that it is another sign that inflation pressures are persisting in an unacceptable manner and it will likely force the Fed into an uncomfortable position of taking a more aggressive policy path at a time when the market also has festering concerns about a slowdown in growth.
The NFIB Small Business Optimism Index increased to 98.4 in November from 98.2 in October.

Looking ahead to Wednesday,, investors can expect the FOMC Rate Decision, Retail Sales for November, the NAHB Housing Market Index for December, Import and Export Prices for November, the Empire State Manufacturing Index for December, Business Inventories for October, and Net Long-Term TIC Flows for October.

S&P 500 +23.4% YTD
Nasdaq Composite +18.2% YTD
Dow Jones Industrial Average +16.1% YTD
Russell 2000 +9.4% YTD

Crude futures settle lower
14-Dec-21 15:30 ET
Dow -48.51 at 35602.44, Nasdaq -144.90 at 15268.37, S&P -27.30 at 4641.67

[BRIEFING.COM] The S&P 500 is down 0.7% after being down 1.3% earlier today.

One last look at the sectors shows ten of the 11 groups still trading lower. The information technology sector (-1.6%) is the weakest link, while the financials sector (+0.9%) outperforms with a 0.9% gain.

WTI crude futures settled lower by 0.9%, or $0.67, to $70.57/bbl. On a related note, the IEA lowered its global demand outlook for the rest of the year and 2022 because of the coronavirus.