Market Summary
from Briefing.comIndustry Watch
Strong: Consumer Discretionary, Consumer Staples, Health Care, Utilities
Weak: Energy, Financials, Technology
Market Moving Factors
- Eurozone finance ministers meet in Luxembourg
- Biotechnology outperforms
[BRIEFING.COM] The major averages ended Thursday on an upbeat note with the Nasdaq Composite (+1.3%) leading the market higher. In addition to pacing today's advance, the Nasdaq set a fresh nominal intraday record high at 5,143.32, overtaking levels last seen in March 2000.
Equity indices rallied throughout the morning after the combination of yesterday's FOMC policy statement and today's economic data set the tone for interest rates to remain at their current levels for longer. To that point, the CPI report for May (+0.4%; Briefing.com consensus 0.5%) was cooler than expected while the remaining data points released today indicated improving economic conditions.
Stocks extended their gains in the early afternoon once Germany's Die Zeit reported that Greece is on track to receive an extension until the end of the year without the involvement of the International Monetary Fund. However, that report was struck down promptly as German Chancellor Angela Merkel said she is only aware of the proposal that was brought forth by the creditors.
Furthermore, Reuters reported European Central Bank member Benoit Coeure was asked if Greek banks will be able to open tomorrow, to which he responded, "Tomorrow, yes. Monday, I don't know." However, the ECB was quick to deny issuing this warning.
Despite the continued uncertainty, all ten sectors posted gains with health care (+1.5%) holding the lead throughout the session. The countercyclical group rallied behind biotechnology as iShares Nasdaq Biotechnology ETF (IBB 377.88, +11.33) spiked 3.1%. In turn, biotechnology helped the Nasdaq Composite spend the day ahead of the Dow and S&P 500.
The tech-heavy Nasdaq enjoyed all-around support as chipmakers displayed relative strength with the PHLX Semiconductor Index climbing 1.5%. Meanwhile, most large cap tech names held their own, but Oracle (ORCL 42.75, -2.16) fell 4.8% after missing earnings/revenue estimates and guiding below consensus expectations. Oracle's underperformance kept the tech sector (+0.8%) behind the broader market throughout the day.
Elsewhere among cyclical sectors, industrials ended in-line with the broader market, but that masked relative strength in transport names. The Dow Jones Transportation Average spiked 1.5% with all 20 members ending in the green. Alaska Air (ALK 63.99, +1.96) climbed 3.2% to pace the rally while five other components gained at least 2.0% apiece.
Also of note, the energy sector (unch) surrendered its gain ahead of the close even though crude oil added 1.1%, settling at $60.42/bbl. In other commodities, gold futures jumped 2.1% to $1202/ozt, contributing to a 1.2% gain in the Market Vectors Gold Miners ETF (GDX 19.09, +0.23).
Treasuries surrendered their overnight gains and continued their retreat into the afternoon, sending the benchmark 10-yr yield higher by three basis points to 2.35%.
Today's trading volume surpassed recent totals as more than 830 million shares changed hands at the NYSE floor.
Economic data included Initial Claims, CPI, Current Account Balance, Leading Indicators, and the Philadelphia Fed Survey:
Equity indices rallied throughout the morning after the combination of yesterday's FOMC policy statement and today's economic data set the tone for interest rates to remain at their current levels for longer. To that point, the CPI report for May (+0.4%; Briefing.com consensus 0.5%) was cooler than expected while the remaining data points released today indicated improving economic conditions.
Stocks extended their gains in the early afternoon once Germany's Die Zeit reported that Greece is on track to receive an extension until the end of the year without the involvement of the International Monetary Fund. However, that report was struck down promptly as German Chancellor Angela Merkel said she is only aware of the proposal that was brought forth by the creditors.
Furthermore, Reuters reported European Central Bank member Benoit Coeure was asked if Greek banks will be able to open tomorrow, to which he responded, "Tomorrow, yes. Monday, I don't know." However, the ECB was quick to deny issuing this warning.
Despite the continued uncertainty, all ten sectors posted gains with health care (+1.5%) holding the lead throughout the session. The countercyclical group rallied behind biotechnology as iShares Nasdaq Biotechnology ETF (IBB 377.88, +11.33) spiked 3.1%. In turn, biotechnology helped the Nasdaq Composite spend the day ahead of the Dow and S&P 500.
The tech-heavy Nasdaq enjoyed all-around support as chipmakers displayed relative strength with the PHLX Semiconductor Index climbing 1.5%. Meanwhile, most large cap tech names held their own, but Oracle (ORCL 42.75, -2.16) fell 4.8% after missing earnings/revenue estimates and guiding below consensus expectations. Oracle's underperformance kept the tech sector (+0.8%) behind the broader market throughout the day.
Elsewhere among cyclical sectors, industrials ended in-line with the broader market, but that masked relative strength in transport names. The Dow Jones Transportation Average spiked 1.5% with all 20 members ending in the green. Alaska Air (ALK 63.99, +1.96) climbed 3.2% to pace the rally while five other components gained at least 2.0% apiece.
Also of note, the energy sector (unch) surrendered its gain ahead of the close even though crude oil added 1.1%, settling at $60.42/bbl. In other commodities, gold futures jumped 2.1% to $1202/ozt, contributing to a 1.2% gain in the Market Vectors Gold Miners ETF (GDX 19.09, +0.23).
Treasuries surrendered their overnight gains and continued their retreat into the afternoon, sending the benchmark 10-yr yield higher by three basis points to 2.35%.
Today's trading volume surpassed recent totals as more than 830 million shares changed hands at the NYSE floor.
Economic data included Initial Claims, CPI, Current Account Balance, Leading Indicators, and the Philadelphia Fed Survey:
- The initial claims level declined to 267,000 for the week ending June 13 from an unrevised 279,000 while the Briefing.com consensus expected a decline to 276,000
- The four-week moving average dipped to 277,000 from 279,000
- The Consumer Price Index increased 0.4% in May after increasing 0.1% in April while the Briefing.com consensus expected an increase of 0.5%
- That was the largest monthly increase in the headline index since a 0.6% gain in February 2013. Prices were flat on a year-over-year basis
- Total energy prices increased 4.3% in May after decreasing 1.3% in April
- Gasoline prices rose 10.4% after declining 1.7% in April
- Excluding food and energy, core CPI increased 0.1% in May after increasing 0.3% in April while the consensus expected an increase of 0.2%
- The current account deficit for the first quarter totaled $113.30 billion while the Briefing.com consensus expected the deficit to hit $116.70 billion
- The fourth quarter deficit was revised to $103.10 billion from $113.50 billion
- The Leading Indicators report for May was up 0.7% while the Briefing.com consensus expected an increase of 0.4%
- The Philadelphia Fed Survey for June rose to 15.2 from 6.7 while economists polled by Briefing.com had expected an improvement to 8.0
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Economic Data
from Briefing.com| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jun 18 | 08:30 | Initial Claims | 06/13 | 267K | 278K | 276K | 279K | |
| Jun 18 | 08:30 | Continuing Claims | 06/06 | 2222K | 2267K | 2259K | 2272K | 2265K |
| Jun 18 | 08:30 | CPI | May | 0.4% | 0.5% | 0.5% | 0.1% | |
| Jun 18 | 08:30 | Core CPI | May | 0.1% | 0.1% | 0.2% | 0.3% | |
| Jun 18 | 08:30 | Current Account Balance | Q1 | -$113.3B | -$116.0B | -$116.7B | -$103.1B | -$113.5B |
| Jun 18 | 10:00 | Philadelphia Fed | Jun | 15.2 | 9.0 | 8.0 | 6.7 | |
| Jun 18 | 10:00 | Leading Indicators | May | 0.7% | 0.3% | 0.4% | 0.7% | |
| Jun 18 | 10:30 | Natural Gas Inventories | 06/13 | 89 bcf | NA | NA | 111 bcf |
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Technical Update
DOW JONES INDUSTRIAL AVERAGE18115.84 +180.10 (+1.00%)
Volume: 94.46 Mil below average of 95.43 Mil
Range: 17944.61 - 18174.73
NASDAQ COMPOSITE
5132.950195 +68.07 (+1.34%)
Volume: 1877.92 Mil above average of 1754.49 Mil
Range: 5082.029785 - 5143.319824
S&P500 INDEX
2121.24 +20.80 (+0.99%)
Volume: 544.43 Mil above average of 511.84 Mil
Range: 2101.58 - 2126.65
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Market Internal
NYSE :Higher than average volume @ 852.5M vs 736.436M
Advancers outpaced Decliners(adv/dec): 2078M/1019M
New highs outpaced low(high/low): 116/46
NASDAQ :
Higher than average volume @ 1866.9M vs 1762.448M
Advancers outpaced Decliners(adv/dec): 1963M/847M
New highs outpaced low(high/low): 170/34
Advancers outpaced Decliners by 2.17 to 1 on higher volumes 2719.4 (+8.82%) than avg 2499 (+0.15%)
VOLATILITY S&P500 (VIX) :
13.19 -1.31(-9.03%)
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Bonds, Currencies & Commodities
from Briefing.comBonds
Governments Fail to Follow Through on FOMC Gains
- Treasuries gave up ground today in a curve-steepening trade despite a headline CPI and core CPI that missed estimates. The Philly Fed Manufacturing Index blew past expectations and is encouraging for those investors who were concerned about the divergence between measures of output and employment trends in the U.S. economy
- Yield Check:
- 2-yr: unch at 0.65%
- 5-yr: +1 bp to 1.63%
- 10-yr: +3 bps to 2.35%
- 30-yr: +4 bps to 3.13%
- News:
- The Consumer Price Index rose 0.4% in May after a 0.1% gain in April. The Briefing.com Consensus expected the CPI to increase 0.5%
- It was the largest monthly increase in the headline index since a 0.6% gain in February 2013. Prices were flat on a year-over-year basis
- Almost all of the gain came from rising gasoline prices
- The increase in Core CPI was the smallest monthly gain since a similar increase in December 2014. Year-over-year, core prices increased 1.7% in May, down from a 1.8% increase in the 12 months to April. That is well below the Fed’s implied CPI target of 2.5%
- Initial Jobless Claims were just slightly lower than expected at 267K versus the Briefing.com consensus of 276K and 279K for the prior week
- Continuing Claims were better than expected at 2222K. The Briefing.com consensus was for 2259K and there were 2272 Continuing Claims in the prior reading
- The Philadelphia Fed Manufacturing Index rose to 16.2 in May versus a Briefing.com consensus of 8.0 and a reading of 6.7 in April
- There were large improvements in trends throughout the data, and the report generally supports better manufacturing conditions throughout the Philadelphia region
- The Conference Board’s Leading Economic Index increased 0.7% for a second consecutive month in May. The Briefing.com Consensus expected the index to increase 0.4%
- The $7 bln 30-year TIPS auction drew average interest, with a high yield of 1.142%, a bid-to-cover ratio of 2.45, and an indirect bid of 70.8%
- The Consumer Price Index rose 0.4% in May after a 0.1% gain in April. The Briefing.com Consensus expected the CPI to increase 0.5%
Currencies
Dollar Recovers Losses After CPI- Both Treasury and foreign exchange markets agreed today that the lower-than-expected headline and Core CPI readings for May will not lead to a "lower and slower" path of interest rate hikes from the Fed. Treasuries quickly gave back sharp gains and the dollar quickly recovered losses after May CPI growth came out at +0.4% versus the Briefing.com consensus of +0.5% (Core growth was +0.1% versus expectations for +0.2%)
- The US Dollar Index is down 0.31% to 94.00
- EUR/USD: +0.23% to $1.1381
- The Eurogroup meeting today produced no results and Greece's departure from the eurozone looks like a very real possibility, BUT
- Donald Tusk, European Council president, has called a meeting of eurozone leaders on Monday
- Greece's official creditors are showing more increased signs of exasperation with the Greek delegation. Greece's leadership appears prepared to reject a deal that cuts pensions (Alexis Tsipras penned a piece in Der Tagesspiegel in which he discussed the importance of pensions to people's survival in an economy with 25% unemployment) or increases VAT on electricity. The Greeks may also be demanding debt reductions as the current debt burden is obviously unsustainable
- USD/JPY: -0.48% to 122.99
- Dollar/yen has been moving lower since the FOMC announcement yesterday
- USD/CHF: -0.01% to 0.9217
- The SNB held rates steady at -0.75% and maintained its forward guidance
- USD/CAD: -0.04% to 1.2226
Commodities
Fed Causes Dollar Index To Drop, Giving Boost To Select Commodities- Weakness in the dollar index today helped provide some strength to select commodities such as precious metals
- Aug gold ended the day +2.1% at $1202.00/oz, while July silver gained $0.19 to $16.16/oz
- WTI oil futures gained some steam today, rising $0.65 to $60.42/barrel
- Gasoline and heating oil futures also posted gains today
- Meanwhile, July natural gas lost 2.8% to $2.78/MMBtu
- July corn fell $0.02 today to end floor trading at $3.58/bushel
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Preview: Friday, 19 Jun 2015
Economic Data
Other Events of Interest
Earnings
Commentary
With today's sessions gain, I expect profit taking tomorrow and traders will be closing their positions before the weekend. Down
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