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Market Snapshot

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

Dow 35950.56 +196.67 (0.55%)
Nasdaq 15653.36 +131.48 (0.85%)
SP 500 4725.79 +29.23 (0.62%)
10-yr Note -26/32 1.499
NYSE Adv 2223 Dec 1060 Vol 647.7 mln
Nasdaq Adv 3181 Dec 1409 Vol 3.9 bln

Industry Watch
Strong: Consumer Discretionary, Industrials, Materials
Weak: Real Estate, Utilities

Moving the Market

-- S&P 500 closes at record high as the rebound momentum persisted

-- Decent economic data, although PCE Prices for November remained hot

-- Relatively light trading volume at the NYSE in front of the Christmas weekend

S&P 500 closes at record high in front of Christmas weekend
23-Dec-21 16:15 ET
Dow +196.67 at 35950.56, Nasdaq +131.48 at 15653.36, S&P +29.23 at 4725.79

[BRIEFING.COM] The S&P 500 rose 0.6% on Thursday, wrapping up the Christmas week at a closing record high amid buy-the-dip momentum. The Dow Jones Industrial Average also gained 0.6% while the Nasdaq Composite (+0.9%) and Russell 2000 (+0.9%) both gained 0.9%.

Most of the gains were registered shortly after the open, and the major indices slowly drifted slowly higher the rest of the session. There was a slight hiccup into the close, which might have been a byproduct of reduced trading volume at the NYSE and efforts to take some money off the table in front of a three-day weekend.

Nine of the 11 S&P 500 sectors closed higher with consumer discretionary (+1.2%), industrials (+1.2%), and materials (+1.0%) each rising at least 1.0%. The real estate (-0.4%) and utilities (-0.03%) sectors closed slightly lower.

Today's economic data was decent: weekly initial claims, new home sales for November, durable goods orders for November, and the final December reading for the University of Michigan Index of Consumer Sentiment were each better than expected. Personal income and spending for November increased modestly.

One of the wrinkles in the data was a hotter-than-expected core PCE Price Index, which increased 0.5% m/m in November (Briefing.com consensus 0.4%) and was up 4.7% yr/yr. The PCE Price Index increased 0.6% m/m, leaving it up 5.7% yr/yr.

In COVID news, the FDA issued an emergency use authorization for Merck’s (MRK 75.73, -0.43, -0.6%) oral antiviral for the treatment of mild-to-moderate coronavirus disease for adults 18 and older. Research continued to suggest that the Omicron variant is milder than the Delta variant despite being more contagious.

The Treasury market softened up, driving yields higher, which was in-line with typical trading behavior when equities rally and the economic data leans positive. The 2-yr yield increased three basis points to 0.69%, and the 10-yr yield increased four basis points to 1.49%.

The U.S. Dollar Index decreased 0.1% to 96.03. WTI crude futures rose 1.2%, or $0.85, to $73.62/bbl.

Reviewing Thursday's economic data:

Personal income increased 0.4% month-over-month in November (Briefing.com consensus 0.5%) and personal spending increased 0.6% (Briefing.com consensus 0.6%). The PCE Price Index was up 0.6% month-over-month and the core PCE Price Index, which excludes food and energy, was up 0.5% (Briefing.com consensus 0.4%). On a year-over-year basis, the PCE Price Index was up 5.7%, versus 5.1% in October, and the core PCE Price Index was up 4.7%, versus 4.2% in November.
The key takeaway from the report is that the bad inflation data should keep the Fed focused on gearing its monetary policy toward battling inflation as opposed to the slowdown effect of the Omicron variant.
Initial jobless claims for the week ending December 18 were unchanged at 205,000 (Briefing.com consensus 206,000). Continuing claims for the week ending December 11 decreased by 8,000 to 1.859 million.
The key takeaway from the report is that it covers the week in which the survey for the December Employment Situation Report is conducted. With the low level of initial claims, economists should be predicting some relatively strong gains in December nonfarm payrolls.
New home sales increased 12.4% month-over-month in November to a seasonally adjusted annual rate of 744,000 units (Briefing.com consensus 770,000) from a downwardly revised 662,000 (from 745,000) in October. On a year-over-year basis, new home sales were down 14.0%.
The key takeaway from the report is that the growth in new home sales is concentrated in higher-priced homes, as inflation pressures, exacerbated by supply constraints and labor shortages, are curtailing the building of lower-priced homes and pinching affordability for lower-income buyers.
The final December reading for the University of Michigan Index of Consumer Sentiment came in at 70.6 (Briefing.com consensus 70.4) versus the preliminary reading of 70.4. The final reading for November was 67.4.
The key takeaway from the report is that the improvement was driven by higher income expectations among households in the bottom third of the income distribution, which has been sparked by higher wages for younger workers and a 5.9% increase in Social Security payments for 2022.
Durable goods orders increased 2.5% month-over-month in November (Briefing.com consensus 1.5%). Excluding transportation, durable goods orders rose 0.8% (Briefing.com consensus 0.6%).
The key takeaway from the report is that there was some slowing in business spending in November, evidenced by the 0.1% decline in orders for nondefense capital goods excluding aircraft. It is worth pointing out, however, that this small decline comes on the heels of steady increases in orders for these goods, so it can still be viewed as a natural slowing after a strong period of gains as opposed to anything more severe in meaning.

There is no economic data scheduled for Monday, whish is when the market reopens from holiday.

S&P 500 +25.8% YTD
Nasdaq Composite +21.5% YTD
Dow Jones Industrial Average +17.5% YTD
Russell 2000 +13.5% YTD

Crude futures settle higher
23-Dec-21 15:30 ET
Dow +269.03 at 36022.92, Nasdaq +145.33 at 15667.21, S&P +37.20 at 4733.76

[BRIEFING.COM] The S&P 500 continues to trade higher by 0.8% and is on track to close at a record high.

One last look at the sector performances shows industrials (+1.3%), consumer discretionary (+1.2%), and materials (+1.2%) in the lead with gains over 1.0%, while the real estate sector (-0.3%) is the lone holdout with a 0.3% decline.

WTI crude futures settled higher by 1.2%, or $0.85, to $73.62/bbl.