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Market Snapshot

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

Dow 32977.21 -939.18 (-2.77%)
Nasdaq 12334.63 -536.89 (-4.17%)
SP 500 4131.93 -155.57 (-3.63%)
10-yr Note -7/32 2.908
NYSE Adv 635 Dec 2457 Vol 1.4 bln
Nasdaq Adv 1301 Dec 3145 Vol 4.7 bln

Industry Watch
Strong: None
Weak: Consumer Discretionary, Real Estate, Information Technology

Moving the Market

-- Stocks sell off to close out disappointing month

-- Amazon.com (AMZN) drops 14% on disappointing guidance

-- Apple (AAPL) warns of higher supply chain costs

-- Lingering concerns about the Fed's tightening plans amid persistent inflation pressures and slower growth prospects

Stocks sell off to close out a disappointing month
29-Apr-22 16:15 ET
Dow -939.18 at 32977.21, Nasdaq -536.89 at 12334.63, S&P -155.57 at 4131.93

[BRIEFING.COM] The S&P 500 dropped 3.6% on Friday in an orderly retreat fueled by disappointing earnings news and sticky inflation pressures. The Dow Jones Industrial Average (-2.8%) and Russell 2000 (-2.9%) both declined 2.8% while the Nasdaq Composite underperformed with a 4.2% decline.

The losses were widespread: all 11 S&P 500 sectors closed lower with losses ranging from 2.0% (materials) to 5.9% (consumer discretionary); 28 of the 30 Dow components closed lower; and declining issues outnumbered advancing issues by a 4:1 margin at the NYSE and a 5:2 margin at the Nasdaq.

Amazon.com (AMZN 2485.63, -406.30, -14.1%) was the biggest drag on the market, falling 14% on downside revenue and operating income guidance for the second quarter. The disappointing guidance reminded investors about the slower growth prospects in an inflationary environment.

Pricing pressures were further illustrated by Apple's (AAPL 157.65, -5.99, -3.7%) warning of higher supply chain costs for fiscal Q3, the 6.6% year-over-year increase in the PCE Price Index for March, and the 1.4% increase in the Q1 Employment Cost Index (Briefing.com consensus 1.1%). Note, Apple topped earnings expectations.

Intel (INTC 43.59, -3.25, -6.9%), Chevron (CVX 156.67, -5.12, -3.2%), and Exxon Mobil (XOM 85.15, -2.05, -2.4%) also fell sharply following their earnings reports, while Honeywell (HON 193.51, +3.59, +1.9%) closed higher after providing pleasing earnings results and guidance.

More relevantly, the inflation data reinforced expectations for the Fed to shift to a tighter policy stance with the intent to rein in inflation pressures. The CME FedWatch Tool was pricing in an 88.4% probability for a 75-basis-point rate hike in June in addition to a 50-basis-point hike next week.

These expectations were also evident in the Treasury market, where the 2-yr yield increased five basis points to 2.69% and the 10-yr yield increased two basis points to 2.89%. The U.S. Dollar Index decreased 0.4% to 103.20. WTI crude futures decreased 0.3%, or $0.28, to $105.03/bbl.

Separately, Elon Musk said he had no plans to sell more shares of Tesla (TSLA 870.76, -6.75, -0.8%) after selling over $8 billion worth of stock this week.

Reviewing Friday's economic data:

Personal income increased 0.5% month-over-month (Briefing.com consensus 0.4%) following an upwardly revised 0.7% increase (from 0.5%) in February. Personal spending jumped 1.1% month-over-month (Briefing.com consensus 0.6%) following an upwardly revised 0.6% increase (from 0.2%) in February. The PCE Price Index surged 0.9% month-over-month, which took the year-over-year rate to 6.6% from 6.3% in February. The core PCE Price Index, which excludes food and energy, was up a more modest 0.3%, as expected, leaving the year-over-year increase at 5.2% versus 5.3% in February.
The key takeaway from the report is that real disposable personal income declined 0.4% in March, which helps explain why the personal savings rate, as a percentage of disposable personal income, dipped to 6.2% from 6.8%. In other words, consumers were spending out of savings presumably to maintain their standard of living in the face of higher costs.
The Q1 Employment Cost Index increased 1.4% (Briefing.com consensus 1.1%) on a seasonally adjusted basis for the three-month period ending in March. Wages and salaries, which account for about 70% of compensation costs, increased 1.2% and benefit costs, which make up the remainder of compensation costs, increased 1.8% for civilian workers.
The key takeaway from the report is that wages and salaries for workers were up from the same period a year ago, yet those gains have increasingly been subsumed by inflation, evidenced by the 7.0% increase in the PCE Price Index seen in the advance Q1 GDP report.
The final University of Michigan Index of Consumer Sentiment for April dropped to 65.2 (Briefing.com consensus 65.7) from the preliminary reading of 65.7. The final reading for March was 59.4. The April uptick was nice to see, although the April reading is one of the lowest readings over the last 10 years.
The key takeaway from the report is that the improvement was driven largely by an expectation that gas price increases will moderate significantly, but even so, there wasn't much improvement in the overall sentiment index, which is trolling its worst levels in the past decade.
The Chicago PMI for April decreased to 58.5 (Briefing.com consensus 62.0) from 62.9 in March.

Looking ahead, investors will receive the ISM Manufacturing Index for April and Construction Spending for March on Monday.

Dow Jones Industrial Average -9.3% YTD
S&P 500 -13.3% YTD
Russell 2000 -17.0% YTD
Nasdaq Composite -21.2% YTD

Crude futures settle lower but remain elevated
29-Apr-22 15:30 ET
Dow -750.00 at 33166.39, Nasdaq -454.51 at 12417.01, S&P -134.18 at 4153.32

[BRIEFING.COM] The S&P 500 is now down a steep 3.1% amid a dearth of buying interest.

One last look at the S&P 500 sectors shows ten sectors down at least 2.0%, with consumer discretionary down 5.5%. The materials sector is down the least with a current 1.3% decline.

WTI crude futures settled lower by $0.28 (-0.3%) to $105.03/barrel.