Market Summary
from Briefing.comIndustry Watch
Strong: Consumer Discretionary, Consumer Staples, Utilities
Weak: Energy, Health Care, Industrials, Telecom Services
Market Moving Factors
- No new developments on the Greek front
- FedEx (FDX) misses earnings/revenue estimates
- FOMC maintains current policy stance, but Fed forecast implies two 25-bps rate hikes before 2016
[BRIEFING.COM] The stock market ended the midweek session on an upbeat note with the S&P 500 settling four points below its 50-day moving average (2,104). The benchmark index added 0.2% while the Dow and Nasdaq posted comparable gains.
Equity indices began the trading day with modest gains, but the first half of the session saw a steady retreat with liquidity drying up ahead of the afternoon release of the FOMC policy statement, which called for no change to the current monetary policy stance. However, the accompanying interest rate forecast implied two 25-basis point increases before the year ends. Furthermore, the Fed lowered its 2015 GDP growth forecast range to 1.8-2.0% from the range of 2.3-2.7% that was forecast in March.
Stocks struggled for direction immediately after the release, but rallied to highs during Chair Janet Yellen's press conference, which was viewed as dovish. To that point, Ms. Yellen said the central bank would like to see more "decisive evidence" on inflation and employment before hiking rates.
U.S. Treasuries retreated into the afternoon, but surged back to unchanged in the wake of the FOMC statement. The benchmark 10-yr yield ended at 2.31% after hitting 2.40% in the afternoon. Meanwhile, the Dollar Index (94.27, -0.73) dropped to a new low for the month with the euro climbing to 1.1340 against the greenback.
Speaking of the euro, the single currency advanced even though the day went by without any progress between Greece and its creditors. According to Bloomberg, Greek Prime Minister said his government is ready to give a "big no" to what is perceived to be a bad deal offered by the EU. That being said, the European Central Bank increased Greece's Emergency Liquidity Assistance to $84.10 billion from $83.00 billion.
Eight of ten sectors registered gains with four of six cyclical groups ending ahead of the broader market. The energy sector (-0.2%) was among the early leaders, but returned to its flat line by the close even as crude oil narrowed its decline to 0.2% at $59.77/bbl by the pit close.
Similar to energy, the financial sector (-0.1%) settled behind the broader market while consumer discretionary (+0.5%), technology (+0.2%), industrials (+0.2%), and materials (+0.4%) posted gains. The consumer discretionary sector ended ahead of other cyclical groups thanks to strength among media and retail names while industrials kept pace with the market even as transport stocks struggled.
The Dow Jones Transportation Average lost 0.4%, widening this week's decline to 1.2%. Shares of FedEx (FDX 176.73, -5.40) were largely responsible for the weakness, falling 3.0% after the logistics company reported disappointing earnings and revenue.
Moving to the countercyclical side, consumer staples (+0.5%) and utilities (+0.9%) outperformed while health care (+0.1%) and telecom services (unch) finished behind the broader market. The slight uptick in the health care sector masked relative strength in biotech names that sent iShares Nasdaq Biotechnology ETF (IBB 366.55, +2.17) higher by 0.6%.
Today's participation was relatively light with roughly 700 million shares changing hands at the NYSE floor.
Economic data was limited to the weekly MBA Mortgage Index, which fell 5.5% to follow last week's 8.4% increase.
Equity indices began the trading day with modest gains, but the first half of the session saw a steady retreat with liquidity drying up ahead of the afternoon release of the FOMC policy statement, which called for no change to the current monetary policy stance. However, the accompanying interest rate forecast implied two 25-basis point increases before the year ends. Furthermore, the Fed lowered its 2015 GDP growth forecast range to 1.8-2.0% from the range of 2.3-2.7% that was forecast in March.
Stocks struggled for direction immediately after the release, but rallied to highs during Chair Janet Yellen's press conference, which was viewed as dovish. To that point, Ms. Yellen said the central bank would like to see more "decisive evidence" on inflation and employment before hiking rates.
U.S. Treasuries retreated into the afternoon, but surged back to unchanged in the wake of the FOMC statement. The benchmark 10-yr yield ended at 2.31% after hitting 2.40% in the afternoon. Meanwhile, the Dollar Index (94.27, -0.73) dropped to a new low for the month with the euro climbing to 1.1340 against the greenback.
Speaking of the euro, the single currency advanced even though the day went by without any progress between Greece and its creditors. According to Bloomberg, Greek Prime Minister said his government is ready to give a "big no" to what is perceived to be a bad deal offered by the EU. That being said, the European Central Bank increased Greece's Emergency Liquidity Assistance to $84.10 billion from $83.00 billion.
Eight of ten sectors registered gains with four of six cyclical groups ending ahead of the broader market. The energy sector (-0.2%) was among the early leaders, but returned to its flat line by the close even as crude oil narrowed its decline to 0.2% at $59.77/bbl by the pit close.
Similar to energy, the financial sector (-0.1%) settled behind the broader market while consumer discretionary (+0.5%), technology (+0.2%), industrials (+0.2%), and materials (+0.4%) posted gains. The consumer discretionary sector ended ahead of other cyclical groups thanks to strength among media and retail names while industrials kept pace with the market even as transport stocks struggled.
The Dow Jones Transportation Average lost 0.4%, widening this week's decline to 1.2%. Shares of FedEx (FDX 176.73, -5.40) were largely responsible for the weakness, falling 3.0% after the logistics company reported disappointing earnings and revenue.
Moving to the countercyclical side, consumer staples (+0.5%) and utilities (+0.9%) outperformed while health care (+0.1%) and telecom services (unch) finished behind the broader market. The slight uptick in the health care sector masked relative strength in biotech names that sent iShares Nasdaq Biotechnology ETF (IBB 366.55, +2.17) higher by 0.6%.
Today's participation was relatively light with roughly 700 million shares changing hands at the NYSE floor.
Economic data was limited to the weekly MBA Mortgage Index, which fell 5.5% to follow last week's 8.4% increase.
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Economic Data
from Briefing.com| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jun 17 | 07:00 | MBA Mortgage Index | 06/13 | -5.5% | NA | NA | 8.4% | |
| Jun 17 | 10:30 | Crude Inventories | 06/13 | -2.676M | NA | NA | -6.812M | |
| Jun 17 | 14:00 | FOMC Rate Decision | Jun | 0.25% | 0.25% | 0.25% | 0.25% |
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Technical Update
DOW JONES INDUSTRIAL AVERAGE17935.74 +31.26 (+0.17%)
Volume: 92.41 Mil below average of 95.02 Mil
Range: 17839.65 - 17998
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
2100.44 +4.15 (+0.20%)
Volume: 480.81 Mil below average of 510.96 Mil
Range: 2088.86 - 2106.79
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Market Internal
NYSE :Lower than average volume @ 716.7M vs 735.362M
Advancers outpaced Decliners(adv/dec): 1612M/1461M
New highs outpaced low(high/low): 88/71
NASDAQ :
Lower than average volume @ 1706.4M vs 1759.718M
Decliners outpaced Advancers(adv/dec): 1320M/1463M
New highs outpaced low(high/low): 149/40
Advancers outpaced Decliners by 1.00 to 1 on lower volumes 2423.1 ( -2.88%) than avg 2495 (-0.18%)
VOLATILITY S&P500 (VIX) :
14.5 -0.31(-2.09%)
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Bonds, Currencies & Commodities
from Briefing.comBonds
Treasuries Recover Deep Losses After FOMC
- The Treasury complex went deep into the red this morning, with significant sellers finding little liquidity in the pre-Fed announcement market. The Fed statement and Fed Chair Yellen's subsequent press conference were interpreted dovishly by the market and sent all maturities except for the 30-year into the green
- Yield Check:
- 2-yr: -4 bps to 0.65% (from 0.74% pre-Fed)
- 5-yr: -5 bps to 1.61% (from 1.73% pre-Fed)
- 10-yr: unch at 2.31% (from 2.39% pre-Fed)
- 30-yr: +4 bps to 3.09% (from 3.13% pre-Fed)
- News:
- The MBA Mortgage Index fell 5.5% for the week ending 6/13 versus an 8.4% rise in the prior week
- Crude oil inventories for the week ending 6/13 fell 2.676 mln barrels versus a fall of 6.812 mln the week before
- The European Central Bank increased Greece's Emergency Liquidity Assistance Program to 84.1 bln euro. There had been concern that the program would not be renewed due to differences between Greece and its official creditors
- The FOMC held rates steady, as expected. There were no dissenters
- From the press conference: Conditions not yet met for a rate hike; initial rate increase should not be overstated; wants to see more 'decisive evidence' that moderate growth will be sustained; says conditions may evolve in a manner that will warrant 'gradual' rate increases
- The "dot plot" showed that the median estimate for Fed funds at the end of 2015 was 0.625% -- for 2016, it was 1.625%
- In the press conference, Fed Chair Yellen said that employment and inflation had not made enough progress before a Fed rate hike
Currencies
Treasuries Recover Deep Losses After FOMC- The US Dollar Index is down 0.72% to 94.32 after Fed Chair Yellen said that the FOMC needs more "decisive" evidence from inflation and employment before they begin to hike rates
- The median projection of the FOMC members for Fed funds at the end of 2015 was 0.625% -- for 2016, it was was 1.625%
- EUR/USD: +0.78% to 1.1232
- The rally was an effect of the Fed decision and Yellen's testimony rather than eurozone related
- USD/JPY: -0.03% to 123.382
- The pair gave up all of its overnight gains after the dovish remarks from the Fed
- GBP/USD: +1.21% to 1.5831
- The Bank of England released minutes of their June meeting today. There were 2 members who felt that the decision to hold or raise was "finely balanced"
Commodities
Fed Causes Dollar Index To Drop, Giving Boost To Select Commodities- Commodities got a boost both trading lower following the FOMC statement/policy update, Federal Reserve rate decision
- Metals ended floor trading flat to lower
- Aug gold lost $4.30 to $1176.80/oz, while July silver finished flat at $15.97/oz
- Copper also ended flat, finishing at $2.61/lb
- However, following the 2pm ET Fed decision, precious metals rallied. Gold is now +0.5%, while silver is +1.3%
- Moving to the energy space...
- WTI crude oil futures rallied some following the Fed and ended floor trading -0.23% at $59.77/barrel
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Preview: Thursday, 18 Jun 2015
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jun 18 | 08:30 | Initial Claims | 06/13 | 278K | 276K | 279K | ||
| Jun 18 | 08:30 | Continuing Claims | 06/06 | 2267K | 2259K | 2272K | 2265K | |
| Jun 18 | 08:30 | CPI | May | 0.5% | 0.5% | 0.1% | ||
| Jun 18 | 08:30 | Core CPI | May | 0.1% | 0.2% | 0.3% | ||
| Jun 18 | 08:30 | Current Account Balance | Q1 | -$116.0B | -$116.7B | -$103.1B | -$113.5B | |
| Jun 18 | 10:00 | Philadelphia Fed | Jun | 9.0 | 8.0 | 6.7 | ||
| Jun 18 | 10:00 | Leading Indicators | May | 0.3% | 0.4% | 0.7% | ||
| Jun 18 | 10:30 | Natural Gas Inventories | 06/13 | NA | NA | 111 bcf |
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