Market Summary
from Briefing.comIndustry Watch
Strong: Consumer Discretionary, Consumer Staples, Financials, Health Care, Utilities
Weak: Energy, Materials, Industrials, Technology
Market Moving Factors
- China lowers 2015 growth forecast to 7.0% from 7.5% in 2014
- Biotechnology outperforms after AbbVie (ABBV) agrees to acquire Pharmacyclics (PCYC)
- Dollar Index extends 2015 gain
[BRIEFING.COM] The stock market ended the Thursday session on a modestly higher note with the Nasdaq Composite (+0.3%) settling in the lead. The tech-heavy index is now up 0.4% week-to-date, while the S&P 500 (+0.1%) will enter the Friday session lower by 0.2% for the week.
In a way, today's session fit right in with recent affairs as equity indices maintained narrow ranges amid light volume. The S&P 500 spent the day inside a nine-point range while NYSE floor volume totaled fewer than 675 million shares (50-day average 766 million).
Six of ten sectors registered gains with three of four countercyclical groups ending ahead of the broader market. To that point, consumer staples (+0.3%), health care (+0.4%), and utilities (+0.8%) spent the day ahead of the broader market while telecom services (-0.1%) lagged.
Most notably, the health care sector was underpinned by biotechnology after AbbVie (ABBV 56.85, -3.42) agreed to acquire Pharmacyclics (PCYC 254.22, +23.74) for $261.25/share. Shares of PCYC jumped 10.3% while the broader iShares Nasdaq Biotechnology ETF (IBB 347.67, +7.58) advanced 2.2%, helping the Nasdaq finish in the lead.
However, the relative strength among biotech names masked a significant soft spot in the market. Specifically, the largest stock by weight—Apple (AAPL 126.39, -2.15)—lost 1.7%, which prevented equity indices from revisiting their morning highs. Meanwhile, the technology sector (-0.1%) held up relatively well despite Apple's weakness. Large cap names like IBM (IBM 161.18, +1.76) and Google (GOOGL 581.44, +3.10) gained 1.1% and 0.5%, respectively, while chipmakers also displayed relative strength with the PHLX Semiconductor Index adding 0.1%.
Similar to technology, growth-sensitive energy (-0.6%) and materials (-0.4%) settled in the red while the other cyclical sectors registered gains.
The energy sector finished at the bottom of today's leaderboard with crude oil contributing to the weakness. The energy component fell 1.5% to $50.76/bbl as dollar strength sent the Dollar Index (96.37, +0.40) to a fresh high for the year. The greenback rallied against the euro, dropping the euro/dollar pair to 1.1030 after European Central Bank President Mario Draghi said the central bank will begin its QE program on March 9, buying negative-yielding bonds up to the deposit rate, which is currently at -0.2%.
On the flip side, the financial sector (+0.4%) ended among the leaders ahead of the 16:30 ET release of the Fed's stress test. The Federal Reserve will announce capital levels of 31 major banks this evening while next Wednesday evening will feature the release of complete results. Bank of America (BAC 16.00, +0.16) led the majors with a 1.0% gain.
Treasuries spent some time on either side of their flat lines before ending with slim gains, sending the 10-yr yield lower by a basis point to 2.11%.
Economic data included jobless claims, productivity/labor cost data, and factory orders:
In a way, today's session fit right in with recent affairs as equity indices maintained narrow ranges amid light volume. The S&P 500 spent the day inside a nine-point range while NYSE floor volume totaled fewer than 675 million shares (50-day average 766 million).
Six of ten sectors registered gains with three of four countercyclical groups ending ahead of the broader market. To that point, consumer staples (+0.3%), health care (+0.4%), and utilities (+0.8%) spent the day ahead of the broader market while telecom services (-0.1%) lagged.
Most notably, the health care sector was underpinned by biotechnology after AbbVie (ABBV 56.85, -3.42) agreed to acquire Pharmacyclics (PCYC 254.22, +23.74) for $261.25/share. Shares of PCYC jumped 10.3% while the broader iShares Nasdaq Biotechnology ETF (IBB 347.67, +7.58) advanced 2.2%, helping the Nasdaq finish in the lead.
However, the relative strength among biotech names masked a significant soft spot in the market. Specifically, the largest stock by weight—Apple (AAPL 126.39, -2.15)—lost 1.7%, which prevented equity indices from revisiting their morning highs. Meanwhile, the technology sector (-0.1%) held up relatively well despite Apple's weakness. Large cap names like IBM (IBM 161.18, +1.76) and Google (GOOGL 581.44, +3.10) gained 1.1% and 0.5%, respectively, while chipmakers also displayed relative strength with the PHLX Semiconductor Index adding 0.1%.
Similar to technology, growth-sensitive energy (-0.6%) and materials (-0.4%) settled in the red while the other cyclical sectors registered gains.
The energy sector finished at the bottom of today's leaderboard with crude oil contributing to the weakness. The energy component fell 1.5% to $50.76/bbl as dollar strength sent the Dollar Index (96.37, +0.40) to a fresh high for the year. The greenback rallied against the euro, dropping the euro/dollar pair to 1.1030 after European Central Bank President Mario Draghi said the central bank will begin its QE program on March 9, buying negative-yielding bonds up to the deposit rate, which is currently at -0.2%.
On the flip side, the financial sector (+0.4%) ended among the leaders ahead of the 16:30 ET release of the Fed's stress test. The Federal Reserve will announce capital levels of 31 major banks this evening while next Wednesday evening will feature the release of complete results. Bank of America (BAC 16.00, +0.16) led the majors with a 1.0% gain.
Treasuries spent some time on either side of their flat lines before ending with slim gains, sending the 10-yr yield lower by a basis point to 2.11%.
Economic data included jobless claims, productivity/labor cost data, and factory orders:
- The initial claims level increased to 320,000 from an unrevised 313,000 while the Briefing.com consensus expected a decline to 295,000
- The reading marked the highest level of initial claims since May 2014 when it reached 327,000
- The Department of Labor reported that no special factors impacted this week's claims reading
- The continuing claims level increased to 2.421 million from an upwardly revised 2.404 million (from 2.401 million)
- Nonfarm business productivity for Q4 2014 was revised down to -2.2% from an originally reported -1.8% while the Briefing.com consensus expected a revision down to -2.3%
- Annual productivity in 2014 was 0.7%, which was the smallest annual gain since increasing only 0.2% in 2011
- Unit labor costs were revised up to 4.1% from 2.7% while the consensus expected a revision up to 2.9%
- Factory orders declined 0.2% in January after declining 3.5% in December while the Briefing.com consensus expected an increase of 0.6%
- Almost the entire decline can be attributed to low oil prices as petroleum refinery orders declined 11.6% in January after declining 15.8% in December. Excluding petroleum, factory orders increased a solid 1.1% in January
- Nasdaq Composite +5.2% YTD
- Russell 2000 +2.5% YTD
- S&P 500 +2.1% YTD
- Dow Jones Industrial Average +1.8% YTD
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Economic Data
from Briefing.com
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Mar 05 | 07:30 | Challenger Job Cuts | Feb | 20.9% | NA | NA | 17.6% | |
| Mar 05 | 08:30 | Initial Claims | 02/28 | 320K | 300K | 295K | 313K | |
| Mar 05 | 08:30 | Continuing Claims | 02/21 | 2421K | 2400K | 2404K | 2404K | 2401K |
| Mar 05 | 08:30 | Productivity-Rev. | Q4 | -2.2% | -1.6% | -2.3% | -1.8% | |
| Mar 05 | 08:30 | Unit Labor Costs -Rev | Q4 | 4.1% | 2.5% | 2.9% | 2.7% | |
| Mar 05 | 10:00 | Factory Orders | Jan | -0.2% | -0.1% | 0.6% | -3.5% | -3.4% |
| Mar 05 | 10:30 | Natural Gas Inventories | 02/28 | -228 bcf | NA | NA | -219 bcf |
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Market Internal
NYSE :Lower than average volume @ 686.5M vs 808.394M
Advancers outpaced Decliners(adv/dec): 1674M/1375M
New highs outpaced low(high/low): 106/38
NASDAQ :
Lower than average volume @ 1711M vs 1811.418M
Advancers outpaced Decliners(adv/dec): 1578M/1170M
New highs outpaced low(high/low): 100/43
Advancers outpaced Decliners by 1.28 to 1 on lower volumes 2397.5 ( -8.49%) than avg 2620 (-0.45%)
VOLATILITY S&P500 (VIX) :
14.04 -0.19(-1.34%)
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Bonds, Currencies & Commodities
from Briefing.comBonds
Treasuries Rise After Volatile Session:
- Treasuries rose today, after enduring two sharp sell-offs to test the lows of February. The February employment report comes out tomorrow at 08:30 ET, and participants were probably hesitant to position themselves aggressively today
- Yield check:
- 2-yr: -2 bps to 0.64%
- 5-yr: -2 bps to 1.57%
- 10-yr: -1 bp to 2.11%
- 30-yr: -1 bp to 2.71%
- The curve ended slightly steeper on the day, again
- The Treasury market traded off of the ECB's press conference, the Initial Jobless Claims report, and January Factory Orders:
- The European Central Bank held a press conference this morning and elaborated on the details of its quantitative easing program
- The program will begin on March 9th and will continue until the ECB is reasonably confident that its 2% inflation target will be reached
- Mario Draghi said that the positive impact of the program has already been felt. Much Eurozone debt of shorter maturities is already trading with negative yields in anticipation
- Initial Jobless Claims: Actual 320K, Briefing.com consensus 295K, prior 313K
- Some economists said that heavy snowfall last week may have caused the layoffs of some temporary workers
- Continuing Jobless Claims: Actual 2421K, Briefing.com consensus 2404K, prior 2404K, revised up from 2401K
- January Factory Orders: Actual -0.2%, Briefing.com consensus +0.6%, prior -3.5%, revised from -3.4%
- Almost all of the decline could be attributed to lower oil prices
- The European Central Bank held a press conference this morning and elaborated on the details of its quantitative easing program
- Commodities:
- WTI Crude fell 72 cents (-1.40%) to $50.81/bbl. The market failed to follow through on yesterday's rally, which occurred despite a much higher than expected weekly supply build
- Copper fell 1 cent (-0.23%) to $2.65/lb.
- After yet another rally that ran out of steam, gold fell 90 cents (-0.07%) to $1200/troy ounce
- Currencies:
- EUR/USD: -52 pips (-0.47%) to $1.1025 (Fresh 11-year low)
- USD/JPY: +44 pips (+0.37%) to 120.18
- February Employment Report (08:30 ET)
- Trade Balance (08:30 ET)
- Consumer Credit (15:00 ET)
Currencies
U.S. Dollar Index Runs to Fresh 11-Year Highs:
- The dollar rallied against every other major currency today, and the U.S. Dollar Index traded up 39 ticks (+0.40%) to 96.35. The currency trade probably had more to do with the strong bull market in dollars rather than news regarding any currency against which the dollar was bought
- Pound sterling fell after the Bank of England held rates steady, as expected
- Minutes for the BoE meeting will be released in two weeks time
- GBP/USD: -23 pips (-0.15%) to $1.5241
- Mario Draghi released details of the ECB's quantitative easing program this morning
- The program will begin on March 9th, although many Eurozone sovereign yields have already gone negative in anticipation
- The program will continue until the ECB is reasonably confident that its 2% inflation target will be reached
- EUR/USD: -49 pips (-0.44%) to $1.1028
- $/Y rallied, although it sold off hard from its best levels of the day. Volatility in the pair continues to compress
- USD/JPY: +40 pips (+0.33%) to 120.13
- The commodity currencies all lost versus the dollar, dousing any market optimism that may have been ignited by Janet Yellen's testimony to the Senate Banking Committee
- USD/CAD: +77 pips (+0.62%) to 1.2505
- AUD/USD: -43 pips (-0.55%) to $0.7772
- NZD/USD: -105 pips (-1.39%) to $0.7479
Commodities
WTI Crude Loses Gains, Ends Below $51.Barrel:- WTI crude oil futures couldn't hold today's gains and slide lower in afternoon activity
- Apr crude ultimately closed $0.74 lower at $50.76/barrel.
- Apr nat gas, on the other hand, rose $0.07 to close at $2.84/MMBtu
- Gold and silver futures hit today's lows in afternoon trade
- Apr gold ended $5.00 lower at $1196.20/oz, while May silver lost $0.01 to $16.16/oz
- Mar copper shed $0.01 to $2.65/lb
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Preview: Friday, 6 Mar 2015
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Mar 06 | 08:30 | Nonfarm Payrolls | Feb | 240K | 240K | 239K | 257K | |
| Mar 06 | 08:30 | Nonfarm Private Payrolls | Feb | 230K | 230K | 237K | 267K | |
| Mar 06 | 08:30 | Unemployment Rate | Feb | 5.6% | 5.6% | 5.7% | ||
| Mar 06 | 08:30 | Hourly Earnings | Feb | 0.1% | 0.2% | 0.5% | ||
| Mar 06 | 08:30 | Average Workweek | Feb | 34.5 | 34.6 | 34.6 | ||
| Mar 06 | 08:30 | Trade Balance | Jan | -$38.7B | -$42.0B | -$45.6B | -$46.6B | |
| Mar 06 | 15:00 | Consumer Credit | Jan | $12.0B | $14.0B | $17.9B | $14.8B |
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