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Market Snapshot

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

Dow 35911.81 -201.81 (-0.56%)
Nasdaq 14893.75 +86.94 (0.59%)
SP 500 4662.85 +3.82 (0.08%)
10-yr Note -29/32 1.782
NYSE Adv 1301 Dec 1961 Vol 893.2 mln
Nasdaq Adv 1994 Dec 2396 Vol 4.3 bln

Industry Watch
Strong: Energy, Information Technology, Communication Services
Weak: Real Estate, Financials, Materials, Utilities

Moving the Market

-- Market overcomes hurdles in front of three-day weekend, as investors buy the intraday dip

-- Mixed bank earnings, downbeat economic data, interest rates rise

-- Relative strength in the mega-caps

S&P 500 overcomes hurdles in front of three-day weekend
14-Jan-22 16:15 ET
Dow -201.81 at 35911.81, Nasdaq +86.94 at 14893.75, S&P +3.82 at 4662.85

[BRIEFING.COM] The S&P 500 gained 0.1% on Friday after being down 1.0% intraday, as the market overcame mixed bank earnings, downbeat economic data, and a sharp rise in interest rates. The Nasdaq Composite (+0.6%) and Russell 2000 (+0.1%) also closed higher, while the Dow Jones Industrial Average fell 0.6%.

Starting with earnings, JPMorgan Chase (JPM 157.89, -10.34, -6.2%) was an eye sore with a 6% decline after missing revenue estimates, while Wells Fargo (WFC 58.06, +2.06, +3.7%) rallied about 4% on upbeat results. Citigroup (C 66.93, -0.85, -1.3%) and BlackRock (BLK 848.60, -18.98, -2.2%) also underwhelmed investors with their results.

The financials sector (-1.0%) was the second-weakest performer in the S&P 500 behind the real estate sector (-1.2%). The materials sector (-0.8%) was restrained by a Q4 EPS warning from Sherwin-Williams (SHW 308.46, -8.93, -2.8%), which cited raw-material availability and labor headwinds in December.

Conversely, the energy sector (+2.4%) was impressive, rising 2.4% amid another increase in WTI crude futures ($83.87, +1.91, +2.3%). The information technology (+0.9%) and communication services (+0.5%) sectors were instrumental in the comeback amid relative strength in the mega-caps.

The Vanguard Mega Cap Growth ETF (MGK 246.35, +0.73, +0.3%) rose 0.3% in an opportunistic trade after entering the session down 5.8% for the year. For comparison, the Invesco S&P 500 Equal Weight ETF (RSP 161.58, -0.28, -0.2%) declined 0.2% today.

The sharp increase in 10-yr yield, which rose six basis points to 1.77%, did not deter the intraday rebound effort. The 2-yr yield rose seven basis points to 0.96% on expectations for a more assertive Fed. The U.S. Dollar Index advanced 0.4% to 95.16.

Interest rates rose despite retail sales for December, industrial production and capacity utilization for December, and preliminary consumer sentiment for January decreasing on a month-over-month basis. The catalyst was perhaps the inflation component of the consumer sentiment report, which showed 5-year inflation expectations rose to 3.1% -- its highest level since 2011.

Separately, casino stocks outperformed after Bloomberg reported that Macau authorities will issue up to six casino licenses as part of regulatory changes in the city. Las Vegas Sands (LVS 42.99, +5.33, +14.2%) rallied 14% on the news.

Reviewing Friday's economic data:

Total retail sales were down 1.9% month-over-month in December (Briefing.com consensus 0.0%) while retail sales, excluding autos, decreased 2.3% (Briefing.com consensus 0.2%). On a year-over-year basis, total retail sales were up 16.9% and up 18.8% excluding autos.
The key takeaway from the report is that total retail sales, which are not adjusted for inflation, contracted at their fastest pace since last February in the face of broadly higher prices. This suggests that inflation is weighing down consumer spending.
Total industrial production decreased 0.1% in December (Briefing.com consensus 0.3%) following an upwardly revised 0.7% increase (from 0.5%) in November. The capacity utilization rate dipped to 76.5% (Briefing.com consensus 77.1%) from a revised 76.6% (from 76.8%) in November.
The key takeaway from the report is that the December dip was owed to a pullback in manufacturing production after two months of solid growth.
The preliminary January reading for the University of Michigan Index of Consumer Sentiment came in at 68.8 (Briefing.com consensus 68.5) versus the final December reading of 70.6.
The key takeaway from the report is that inflation expectations are becoming more entrenched, as the 5-year inflation expectations rose to 3.1%, representing the first increase above the 3.0% mark since 2011.
Import prices fell 0.2% in December after increasing 0.7% in November. Excluding oil, import prices increased 0.5% after increasing 0.5% in November. Export prices fell 1.8% after increasing 0.8% in November. Excluding agriculture, export prices fell 2.1% after increasing 0.6% in November.
Business inventories increased 1.3% m/m in November (Briefing.com consensus 1.0%) following a revised 1.3% increase (from 1.2%) in October.

Looking ahead, investors will receive the Empire State Manufacturing Index for January, the NAHB Housing Market Index for January, and Net Long-Term TIC Flows for November on Tuesday. As a reminder, the market will be closed on Monday in observance of Martin Luther King, Jr. Day.

Dow Jones Industrial Average -1.2% YTD
S&P 500 -2.2% YTD
Russell 2000 -3.7% YTD
Nasdaq Composite -4.8% YTD

Crude futures settle near $84 per barrel
14-Jan-22 15:30 ET
Dow -286.27 at 35827.35, Nasdaq +51.00 at 14857.81, S&P -6.19 at 4652.84

[BRIEFING.COM] The S&P 500 is down 0.1% to trade near its best levels of the session amid an uptick in the mega-cap stocks, which are seeing some relief after a tough start to the year.

One last look at the sectors shows energy (+2.3%) in a league of its own amid higher oil prices, followed by the information technology (+0.7%) and communication services (+0.5%) sectors. The financials (-1.2%) and real estate (-1.1%) sectors are down more than 1.0%.

WTI crude futures settled higher by 2.3%, or $1.91, to $83.87/bbl.