Market Summary
from Briefing.comIndustry Watch
Strong: Energy, Telecom Services
Weak: Consumer Discretionary, Health Care, Industrials, Technology
Market Moving Factors
- Greek Finance Minister met with his German counterpart, but the meeting has not produced any results
- Pfizer (PFE) acquires Hospira (HSP) for $90/share
Dow +211.86
at 17884.88,
Nasdaq +48.39
at 4765.10,
S&P +21.01
at 2062.52
[BRIEFING.COM] The major averages zoomed higher on Thursday, allowing the S&P 500 (+1.0%) to reclaim its loss from yesterday and then some. The benchmark index erased the remainder of its decline from January while the Dow (+1.2%) and Russell 2000 (+1.3%) outperformed.
Equity indices made the bulk of their advance during the opening hour and spent the rest of the trading day in narrow ranges near their highs. The opening spike took place after investors realized that yesterday's ECB decision to lift a waiver that allowed for the acceptance of Greek government bonds as collateral was political at its core.
For the time being, Greek banks are still allowed to turn to the Bank of Greece, which in turn has access to funds through Emergency Liquidity Assistance from the European Central Bank. To that point, Germany's Die Welt reported that the ECB has granted up to EUR60 billion in funding to the Bank of Greece through ELA channels.
That being said, the negotiations are unlikely to unfold without a hitch, evidenced by today's press conference after Greece's Finance Minister Yanis Varoufakis met with his German counterpart Wolfgang Schaeuble. Mr. Schaeuble said he was advised to say the two "Agreed to disagree," but Mr. Varoufakis countered, saying "We didn't even agree to disagree."
The S&P 500 opened just above its 50-day moving average (2,044) and built on its early gain with the assistance from most sectors. The materials space (+2.4%) finished in the lead while health care (+1.6%) and energy (+1.4%) also outperformed.
The energy sector received a helping hand from crude oil, which followed yesterday's 9.3% plunge with a 4.2% spike to $50.47/bbl. Despite the surge, the energy component remains below its 50-day moving average, which resides in the $55.00/bbl area.
Meanwhile, the health care sector benefitted from strength in the biotech group with the iShares Nasdaq Biotechnology ETF (IBB 319.91, +7.36) climbing 2.4% to snap its four-day losing streak. Furthermore, Dow component Pfizer (PFE 32.99, +0.92) added 2.9% after agreeing to acquire Hospira (HSP 87.64, +22.84) for $90/share, which represents a 38.9% premium to HSP's closing price from yesterday.
Elsewhere among influential sectors, financials (+1.0%), industrials (+1.0%), and technology (+0.9%) finished near the broader market while the consumer discretionary sector (+0.6%) underperformed. Homebuilders struggled amid today's increase in Treasury yields with the iShares Dow Jones US Home Construction ETF (ITB 26.20, -0.15) shedding 0.6%. Also of note, apparel names ended in mixed fashion with Michael Kors (KORS 69.77, -1.61) falling 2.3% after cautious guidance and below-consensus comparable store sales overshadowed a bottom-line beat.
Treasuries retreated, ending near their lows with the 10-yr yield higher by six basis points at 1.81%.
Today's participation was below average with roughly 775 million shares changing hands at the NYSE floor.
Economic data included Initial Claims, Trade Deficit, Productivity/Unit Labor Cost Data, and Challenger Job Cuts:
Equity indices made the bulk of their advance during the opening hour and spent the rest of the trading day in narrow ranges near their highs. The opening spike took place after investors realized that yesterday's ECB decision to lift a waiver that allowed for the acceptance of Greek government bonds as collateral was political at its core.
For the time being, Greek banks are still allowed to turn to the Bank of Greece, which in turn has access to funds through Emergency Liquidity Assistance from the European Central Bank. To that point, Germany's Die Welt reported that the ECB has granted up to EUR60 billion in funding to the Bank of Greece through ELA channels.
That being said, the negotiations are unlikely to unfold without a hitch, evidenced by today's press conference after Greece's Finance Minister Yanis Varoufakis met with his German counterpart Wolfgang Schaeuble. Mr. Schaeuble said he was advised to say the two "Agreed to disagree," but Mr. Varoufakis countered, saying "We didn't even agree to disagree."
The S&P 500 opened just above its 50-day moving average (2,044) and built on its early gain with the assistance from most sectors. The materials space (+2.4%) finished in the lead while health care (+1.6%) and energy (+1.4%) also outperformed.
The energy sector received a helping hand from crude oil, which followed yesterday's 9.3% plunge with a 4.2% spike to $50.47/bbl. Despite the surge, the energy component remains below its 50-day moving average, which resides in the $55.00/bbl area.
Meanwhile, the health care sector benefitted from strength in the biotech group with the iShares Nasdaq Biotechnology ETF (IBB 319.91, +7.36) climbing 2.4% to snap its four-day losing streak. Furthermore, Dow component Pfizer (PFE 32.99, +0.92) added 2.9% after agreeing to acquire Hospira (HSP 87.64, +22.84) for $90/share, which represents a 38.9% premium to HSP's closing price from yesterday.
Elsewhere among influential sectors, financials (+1.0%), industrials (+1.0%), and technology (+0.9%) finished near the broader market while the consumer discretionary sector (+0.6%) underperformed. Homebuilders struggled amid today's increase in Treasury yields with the iShares Dow Jones US Home Construction ETF (ITB 26.20, -0.15) shedding 0.6%. Also of note, apparel names ended in mixed fashion with Michael Kors (KORS 69.77, -1.61) falling 2.3% after cautious guidance and below-consensus comparable store sales overshadowed a bottom-line beat.
Treasuries retreated, ending near their lows with the 10-yr yield higher by six basis points at 1.81%.
Today's participation was below average with roughly 775 million shares changing hands at the NYSE floor.
Economic data included Initial Claims, Trade Deficit, Productivity/Unit Labor Cost Data, and Challenger Job Cuts:
- The initial claims level increased to 278,000 from an upwardly revised 267,000 (from 265,000) while the Briefing.com consensus expected an increase to 290,000
- For the first few weeks of January, the initial claims level suddenly accelerated above 300,000. There was no supporting evidence that explained the increase, but we assumed that it must have been the result of increased layoff activities in the oil and gas sector
- The trade deficit widened to $46.60 billion in December from a downwardly revised $39.8 billion ($39.0 billion) in November while the consensus expected a decrease to $38.00 billion
- According to the advance fourth quarter GDP report, the BEA assumed that the trade deficit would widen in December to roughly $45.00 billion. Not only did the December deficit exceed those expectations but inclusion of the downside November revisions means that the trade deficit will subtract more from GDP growth in the second estimate than it did in the advance release
- Nonfarm labor productivity declined 1.8% in the fourth quarter after increasing an upwardly revised 3.7% (from 2.3%) in Q3 2014 while the Briefing.com consensus expected an increase of 0.2%
- Unit labor costs increased 2.7% in the fourth quarter after declining in both the second and third quarters. The increase resulted from a 0.9% jump in hourly compensation coupled with lower output gain
- The Challenger Job Cuts report for January indicated a 17.6% increase to follow the prior rise of 6.6%
- Nasdaq Composite +0.6% YTD
- Dow Jones Industrial Average +0.4% YTD
- Russell 2000 +0.3% YTD
- S&P 500 +0.2% 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 03 | 14:00 | Auto Sales | Feb | NA | NA | 5.5M | ||
| Mar 03 | 14:00 | Truck Sales | Feb | NA | NA | 8.1M |
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Technical Update
DOW
NASDAQ
S&P500
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Market Internal
NYSE :Lower than average volume @ 743.8M vs 819.564M
Decliners outpaced Advancers(adv/dec): 1256M/1819M
New highs outpaced low(high/low): 114/25
NASDAQ :
Higher than average volume @ 2009.2M vs 1823.34M
Decliners outpaced Advancers(adv/dec): 961M/1799M
New highs outpaced low(high/low): 71/34
Decliners outpaced Advancers by 1.63 to 1 on higher volumes 2753 (+4.17%) than avg 2643 (-0.43%)
VOLATILITY S&P500 (VIX) :
16.85 -1.48(-8.07%)
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Bonds, Currencies & Commodities
from Briefing.comBonds
Treasuries Finish Near Lows:
- After two strong, intraday rallies, the Treasury complex finished lower. With no significant economic data out today, bonds traded off of the equity sell-off and their own momentum from Monday's shellacking
- Once again, the 2-year note held up better than the belly and long end of the curve, falling only 2 bps to 0.69%
- Yield check:
- 2-yr: +2 bps to 0.69%
- 5-yr: +3 bps to 1.61%
- 10-yr: +4 bps to 2.12%
- 30-yr: +3 bps to 2.71%
- With little in the way of economic data today, Treasuries traded mostly in reaction to the equity market and off of their own momentum from yesterday. Monday was an ugly one for government bond investors, and there was a report today from Reuters that investors had pulled $525.8 million from one large BlackRock ETF on Monday. Real money withdrawals are more concerning than short-selling, as most short-sellers are quicker to cover their positions than people who have made a strategic decision to divest from Treasuries
- Commodities:
- WTI Crude rallied 78 cents (1.57%) to $50.37/bbl
- Gold futures for April delivery gave back yet another intraday rally. After trading as high as $1214.40/troy oz., they fell $5.30 on the day to 1202.90/troy oz.
- Copper fell 4 cents to $2.65/lb.
- Currencies:
- EUR/USD: -7 pips (-0.06%) to $1.1176
- USD/JPY: -40 pips (-0.33%) to 119.75
- The Day Ahead:
- Data Out Wednesday:
- MBA Mortgage Index for week ending 2/28 (07:00 ET)
- February ADP Employment Change (08:15 ET)
- February ISM Services (10:00 ET)
- Crude Inventories for the week ending 2/28 (10:30 ET)
- Fed's Beige Book for March (14:00 ET)
- Fed Speak:
- Chicago Fed President Evans (FOMC voter) speaks on current economic conditions and monetary policy before the Lake Forest-Lake Bluff Rotary Club 2015 Economic Breakfast (09:00 ET)
- Kansas City Fed President George (non-FOMC voter) speaks on the U.S. economy at an event hosted by Central Exchange (approx. 13:00 ET)
- Dallas Fed President Fisher speaks on "Reflections on 10 Years at the Fed & Farewell, El Paso" (19:00 ET)
- Data Out Wednesday:
Currencies
Dollar Pulls Back:- The U.S. Dollar Index lost ground on Tuesday to the Japanese Yen and the commodity currencies (Aussie, Kiwi, and the Loonie), but ended well off of session lows, down 15 ticks (-0.15%) to 95.31
- USD/JPY: -53 pips (-0.45%) to 119.61
- NZD/USD: -48 pips (-0.64%) to $0.7554
- USD/CAD: -60 pips (-0.48%) to 1.2481
- The Australian Dollar rallied overnight as the Reserve Bank of Australia surprised the market and left its policy rate unchanged at 2.25%. The AUD/USD pair rallied sharply on the news, but remains within its range of the past week
- AUD/USD: -66 pips (-0.85%) to $0.7829
- The Euro remained mostly unchanged against the U.S. Dollar. German Retail Sales and Spanish Unemployment both beat expectations, but Eurozone PPI missed the consensus estimate
- EUR/USD: -7 pips (-0.07%) to $1.1189
- The British Pound gained slightly on a better than expected February Construction PMI. It came in at 60.1, versus 59.1 in January
- GBP/USD: +15 pips (+0.1%) to $1.5374
Commodities
WTI Crude Gains, Ends Above $50/Barrel:- WTI crude oil stayed in positive territory today and finished the day $0.96 higher at $50.54/barrel
- Keep in mind that news/headlines of the U.S. running out of storage for oil will remain a popular topic for now
- After gold and silver futures sold off late morning, both held losses near today's low
- Apr gold closed $3.80 lower at $1204.20/oz, while May silver fell $0.16 lower at $16.29/oz
- Natural gas held gains after climbing higher today... Apr NG ultimately closed $ 0.01 higher at $2.71/MMBtu
- May copper fell $0.04 to $2.66/lb today
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Preview: Wednesday, 4 Mar 2015
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Mar 04 | 07:00 | MBA Mortgage Index | 02/28 | NA | NA | NA | ||
| Mar 04 | 08:15 | ADP Employment Change | Feb | 230K | 220K | 213K | ||
| Mar 04 | 10:00 | ISM Services | Feb | 55.5 | 56.5 | 56.7 | ||
| Mar 04 | 10:30 | Crude Inventories | 02/28 | NA | NA | 8.427M | ||
| Mar 04 | 14:00 | Fed's Beige Book | Mar | NA | NA | NA |
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