Market Summary
from Briefing.comIndustry Watch
Strong: Industrials, Technology
Weak: Consumer Discretionary, Energy, Health Care
Market Moving Factors
- IMF cuts 2015 global GDP forecast to 3.5% from 3.8%: crude oil retreats
- Biotechnology and chipmakers outperform
Equity indices started the day with modest gains, but continued weakness in crude oil weighed on the overall risk tolerance and contributed to an early retreat. However, a handful of influential sectors were able to withstand the selling pressure, which in turn became a supportive factor during afternoon action.
As for crude, the energy component retreated after The International Monetary Fund cut its 2015 global growth outlook to 3.0% from 3.5%, and continued sliding throughout the session. WTI crude ended lower by 4.1% at $46.51/bbl while the energy sector (+0.1%) settled near its flat line. On the earnings front, Baker Hughes (BHI 57.26, +0.70) and Halliburton (HAL 39.83, +0.70) posted respective gains of 1.2% and 1.8% in reaction to better than expected results.
Similar to energy, consumer discretionary (-0.6%) and financials (-0.4%) trailed the broader market throughout the day. The financial sector lagged following disappointing results from Morgan Stanley (MS 34.75, -0.14) while discretionary shares were pressured by homebuilders and retailers. The iShares Dow Jones US Home Construction ETF (ITB 24.48, -0.62) and SPDR S&P Retail ETF (XRT 92.23, -1.21) lost 2.5% and 1.3%, respectively. On the upside, Netflix (NFLX 348.80, +11.46) gained 3.4% ahead of its quarterly report.
Elsewhere among influential sectors, health care (-0.1%) pressured the market in the early going following a revenue miss from Johnson & Johnson (JNJ 101.29, -2.75). However, the sector was lifted off its low by the relative strength in the biotech space. The iShares Nasdaq Biotechnology ETF (IBB 323.23, +5.41) gained 1.7% and settled at a fresh record high.
The biotech group also bolstered the Nasdaq and helped the index settle ahead of the broader market. To be sure, the Nasdaq received another measure of support from its top-weighted components, including Apple (AAPL 108.78, +2.79), which spiked 2.6%.
Treasuries notched their highs around 11:00 ET before spending the remainder of the session in a steady retreat. The 10-yr yield ended lower by five basis points at 1.79%.
Participation was a bit above average with more than 840 million shares changing hands at the NYSE floor.
Economic data was limited to the NAHB Housing Market Index for January, which slipped to 57 from a revised 58 (from 57) while the Briefing.com consensus expected the reading to hold at 58.
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Economic Data
from Briefing.com
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 20 | 10:00 | NAHB Housing Market Index | Jan | 57 | 56 | 58 | 58 | 57 |
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Technical Update
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Market Internal
NYSE :Lower than prev day volume @ 861M vs 961.9M
Decliners outpaced Advancers(adv/dec): 1216M/1900M
New highs outpaced low(high/low): 218/99
NASDAQ :
Lower than prev day volume @ 1828.7M vs 1929.6M
Decliners outpaced Advancers(adv/dec): 1140M/1653M
New lows outpaced highs(high/low): 80/118
Decliners outpaced Advancers by an average 1.51 to 1 on lower volumes than prev day (-201.8 -6.98%)
VOLATILITY S&P500 (VIX) :
19.89 +1.06 (-5.06%)
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Bonds, Currencies & Commodities
from Briefing.comBonds
30Y Posts Lowest Close on Record:- Treasuries endured a mixed trade.
- Maturities were bid ahead of the cash open and pressed to their best levels of the session in response to the small NAHB Housing Market Index (57 actual v. 58 expected, 57 previous) miss.
- However, selling would emerge as equities pared their losses and eventually reclaimed the unchanged line.
- Up front, the 2Y ticked up +1bp to 48.6bps. Resistance at the 50bp level is now in focus.
- In the belly, the 5Y added +1bp to 1.293%. Action is now almost +15bps off Friday's low.
- The 10Y slipped -0.8bps to 1.807%. The benchmark yield ended within 2.5bps of its lowest close since May 2013.
- Outperformance at the long end dropped the 30Y -3.7bps to 2.398%. Today's finish was the lowest ever.
- A flatter curve persisted throughout the day as the 2-10-yr spread narrowed to 132bps.
- Precious metals went off near their highs as gold rallied +$18 to $1295 and silver added +$0.25 to $18.00.
- Data: MBA Mortgage Index (7), housing starts, and building permits (8:30).
Currencies
Dollar Retakes 93.00:- The Dollar Index trades on session highs as trade probes the 93.00 area.
- Action remains on track to close at its best level in 11 years.
- EURUSD is -55 pips @ 1.1550 as sellers remain in control despite the improvement in eurozone and German ZEW Economic Sentiment. Today's selling has the single currency printing at levels last seen in November 2003 as sellers continue to hammer away ahead of Thursday's ECB rate decision, which is widely expected to include the announcement of QE-style program. The days ahead will also bring headline risk in the form of the Greek elections on January 25.
- GBPUSD is +45 pips @ 1.5155. Action has tested the 1.5100 level for the past two weeks, but so far the level has held as it has since July 2010. British data out tomorrow includes the Average Earnings Index, claimant count change, and unemployment rate. The latest MPC votes are also scheduled for release.
- USDCHF is -5 pips @ .8780 after clawing back its early losses. Early selling pressured the pair to a low of .8685, but a steady bid throughout the U.S. session has action fighting to lock in a third day of gains. The pair remains 1400 pips off the January 15 high.
- USDJPY is +125 pips @ 118.80 as action probes the 50 dma. Tonight's Bank of Japan rate decision will be in focus as some speculate the central bank may up its asset purchase program.
- AUDUSD is -40 pips @ .8160 as light selling takes hold for a second day. The selling in the hard currency comes as Chinese GDP outpaced estimates, but pointed to a continued slowdown in the Middle Kingdom. Support in the .8100 area is in focus. Australia's Westpac Consumer Sentiment is due out tonight.
- USDCAD is +150 pips @ 1.2090 as trade rallies to a fresh six-year high following the manufacturing sales (-1.4% MoM actual v. -0.5% MoM expected) miss. Resistance at the 200 mma (1.2323) is now in focus. Canada's wholesale sales will be announced ahead of the Bank of Canada rate decision.
Commodities
- Natural gas and WTI crude oil futures fall sharply today
- WTI crude dropped hard this morning. Buyers attempted to give it some legs, but this didn't hold and crude hit a new LoD near the close of pit trading
- Mar crude ultimately finished $1.99 lower at $46.51/barrel
- Mar natural gas tanked basically on a continued mild weather outlook.
- Mat NG closed $0.30 lower at $2.83/MMBtu
- Precious metals rose today, but other industrials metals such as copper declined
- Feb gold gained $17.50 to $1293.90/oz today, while Mar silver rose $0.21 to $17.96/oz
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Preview: Wednesday, 21 Jan 2015
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 21 | 07:00 | MBA Mortgage Index | 01/17 | NA | NA | 49.1% | ||
| Jan 21 | 08:30 | Housing Starts | Dec | 1030K | 1040K | 1028K | ||
| Jan 21 | 08:30 | Building Permits | Dec | 1050K | 1060K | 1035K |
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