Market Summary
from Briefing.comIndustry Watch
Strong: Financials, Consumer Discretionary, Technology
Weak: Real Estate, Energy, Consumer Staples, Materials, Utilities
- Walmart (WMT) slides on quarterly results/guidance
- BoJ implements yield control measures: purchases 2-yr and 5-yr notes
- UK Retail Sales +7.4% y/y (estimate: 5.3%; last: 4.2%); Core Retail Sales +7.6% y/y (estimate: 5.4%; last: 4.0%)
- Heavily-weighted financials, consumer discretionary, and technology outperform
- Fed Chair Yellen: rate hike could be appropriate "relatively soon"; expects growth to continue at a moderate pace
[BRIEFING.COM] The stock market ended the Thursday affair on a modestly higher note as investors assessed the latest battery of economic data. The Nasdaq Composite (+0.7%) finished ahead of both the S&P 500 (+0.5%) and the Dow Jones Industrial Average (+0.2%).
Participants expanded their bets on an improving economy as increased inflation concerns had investors rotating out of the bond market in favor of more growth-oriented positions.
The Consumer Price Index (CPI) increased 0.4% (Briefing.com consensus +0.4%) in October while core CPI, which excludes food and energy, ticked up by 0.1% (Briefing. com consensus +0.2%). The data showed a firming inflation trend with the headline index rising to 1.6% year-over-year. Meanwhile, the core reading is up 2.1% year-over-year.
The latest housing data also helped pro-growth positioning as housing starts rose to an annualized rate of 1.323 million (Briefing.com consensus 1178k) in October. This will figure positively into fourth quarter GDP estimates and also marks the strongest reading since 2007. Building permits increased 0.3% to a seasonally adjusted rate of 1.229 million (Briefing.com consensus 1.200 million).
Federal Reserve Chair Janet Yellen highlighted recent economic growth when she stated that economic data since the November Fed meeting has been consistent with expectations. Chair Yellen also indicated that a policy rate increase may be appropriate relatively soon. According to the CME's FedWatch Tool, the implied probability of a December interest rate hike registers at 90.6%, unchanged from yesterday.
The tech-heavy Nasdaq (+0.7%; month-to-date: +2.8%) outperformed, narrowing this month's performance gap. The Dow Jones Industrial Average (+0.2%; month-to-date: +4.2%) and S&P 500 (+0.5%; month-to-date: +2.9%) ended closer to their flat lines. The modest advance in the benchmark index was underpinned by gains in six sectors.
The heavily-weighted financial (+1.3%), consumer discretionary (+1.2%), and technology (+0.7%) sectors led while real estate (-0.9%) and energy (-0.7%) underperformed.
The economically-sensitive financial sector (+1.3%) outperformed amid rising market rates and positive economic data. Banking names led the advance as steepening in the yield curve improved the industry's earnings potential. The SPDR S&P Bank ETF (KBE 40.17, +0.53) finished higher by 1.3%. Separately, Dow component JPMorgan Chase (JPM 78.02, +0.62, +0.8%) ended behind its peers after settling a hiring probe for approximately $265 million.
In the consumer discretionary space (+1.2%), homebuilders outperformed on the heels of the better-than-expected housing data. The iShares Dow Jones US Home Construction ETF (ITB 27.34, +0.57) rallied 2.1%. Meanwhile, electronics retailer Best Buy (BBY 45.99, +5.54) spiked 13.7% after topping consensus estimates for the quarter and issuing upbeat guidance for the fourth quarter.
The technology sector (+0.7%) continued playing catch up with the broader market. Dow component Microsoft (MSFT 60.64, +0.99) outperformed after an upgrade to "Buy" from "Neutral" at Goldman. Conversely, shares of Cisco Systems (CSCO 30.05, -1.52) fell 4.8% after the company issued some cautious guidance. The tech giant did, however, beat bottom-line estimates for the quarter.
The energy sector (-0.7%) ended on a lower note as crude oil surrendered an intraday gain, sliding into negative territory. WTI crude settled down 1.1% ($45.38/bbl; -$0.19).
The Treasury complex finished on a lower note with the long-end of the curve underperforming. The yield on the 2-yr note finished higher by two basis points (1.03%) while the yield on the benchmark 10-yr note rose six basis points to 2.29%.
Today's trading volume was below the average of 895 million as fewer than 831 million shares changed hands at the NYSE floor.
Today's economic data included CPI for October, October Housing Starts and Building Permits, weekly initial claims, and the Philadelphia Fed Survey for November:
There is no economic data of note scheduled to be released tomorrow.
Participants expanded their bets on an improving economy as increased inflation concerns had investors rotating out of the bond market in favor of more growth-oriented positions.
The Consumer Price Index (CPI) increased 0.4% (Briefing.com consensus +0.4%) in October while core CPI, which excludes food and energy, ticked up by 0.1% (Briefing. com consensus +0.2%). The data showed a firming inflation trend with the headline index rising to 1.6% year-over-year. Meanwhile, the core reading is up 2.1% year-over-year.
The latest housing data also helped pro-growth positioning as housing starts rose to an annualized rate of 1.323 million (Briefing.com consensus 1178k) in October. This will figure positively into fourth quarter GDP estimates and also marks the strongest reading since 2007. Building permits increased 0.3% to a seasonally adjusted rate of 1.229 million (Briefing.com consensus 1.200 million).
Federal Reserve Chair Janet Yellen highlighted recent economic growth when she stated that economic data since the November Fed meeting has been consistent with expectations. Chair Yellen also indicated that a policy rate increase may be appropriate relatively soon. According to the CME's FedWatch Tool, the implied probability of a December interest rate hike registers at 90.6%, unchanged from yesterday.
The tech-heavy Nasdaq (+0.7%; month-to-date: +2.8%) outperformed, narrowing this month's performance gap. The Dow Jones Industrial Average (+0.2%; month-to-date: +4.2%) and S&P 500 (+0.5%; month-to-date: +2.9%) ended closer to their flat lines. The modest advance in the benchmark index was underpinned by gains in six sectors.
The heavily-weighted financial (+1.3%), consumer discretionary (+1.2%), and technology (+0.7%) sectors led while real estate (-0.9%) and energy (-0.7%) underperformed.
The economically-sensitive financial sector (+1.3%) outperformed amid rising market rates and positive economic data. Banking names led the advance as steepening in the yield curve improved the industry's earnings potential. The SPDR S&P Bank ETF (KBE 40.17, +0.53) finished higher by 1.3%. Separately, Dow component JPMorgan Chase (JPM 78.02, +0.62, +0.8%) ended behind its peers after settling a hiring probe for approximately $265 million.
In the consumer discretionary space (+1.2%), homebuilders outperformed on the heels of the better-than-expected housing data. The iShares Dow Jones US Home Construction ETF (ITB 27.34, +0.57) rallied 2.1%. Meanwhile, electronics retailer Best Buy (BBY 45.99, +5.54) spiked 13.7% after topping consensus estimates for the quarter and issuing upbeat guidance for the fourth quarter.
The technology sector (+0.7%) continued playing catch up with the broader market. Dow component Microsoft (MSFT 60.64, +0.99) outperformed after an upgrade to "Buy" from "Neutral" at Goldman. Conversely, shares of Cisco Systems (CSCO 30.05, -1.52) fell 4.8% after the company issued some cautious guidance. The tech giant did, however, beat bottom-line estimates for the quarter.
The energy sector (-0.7%) ended on a lower note as crude oil surrendered an intraday gain, sliding into negative territory. WTI crude settled down 1.1% ($45.38/bbl; -$0.19).
The Treasury complex finished on a lower note with the long-end of the curve underperforming. The yield on the 2-yr note finished higher by two basis points (1.03%) while the yield on the benchmark 10-yr note rose six basis points to 2.29%.
Today's trading volume was below the average of 895 million as fewer than 831 million shares changed hands at the NYSE floor.
Today's economic data included CPI for October, October Housing Starts and Building Permits, weekly initial claims, and the Philadelphia Fed Survey for November:
- CPI increased 0.4%, as expected, in October while core CPI, which excludes food and energy, rose 0.1% (Briefing.com consensus +0.2%).
- On a year-over-year basis, total CPI is up 1.6% -- its largest 12-month increase since October 2014 -- and core CPI is up 2.1%
- October housing starts surged 25.5% to a seasonally adjusted annual rate of 1.323 million (Briefing.com consensus 1.178 million).
- Building permits rose 0.3% to a seasonally adjusted annual rate of 1.229 million (Briefing.com consensus 1.200 million)
- Initial claims for the week ending November 12 dropped by 19,000 to 235,000 (Briefing.com consensus 258,000).
- Continuing claims decreased by 66,000 to 1.977 million, which is the lowest level since April 15, 2000.
- The Philadelphia Fed Index dipped to 7.6 in November (Briefing.com consensus 8.5) from 9.7 in October, although the new orders index ticked up to 18.6 from 16.3.
There is no economic data of note scheduled to be released tomorrow.
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Economic Data
from Briefing.com| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Nov 17 | 08:30 | CPI | Oct | 0.4% | 0.4% | 0.4% | 0.3% | -- |
| Nov 17 | 08:30 | Core CPI | Oct | 0.1% | 0.2% | 0.2% | 0.1% | -- |
| Nov 17 | 08:30 | Housing Starts | Oct | 1323K | 1160K | 1178K | 1054K | 1047K |
| Nov 17 | 08:30 | Building Permits | Oct | 1229K | 1210K | 1200K | 1225K | -- |
| Nov 17 | 08:30 | Initial Claims | 11/12 | 235K | 258K | 257K | 254K | -- |
| Nov 17 | 08:30 | Continuing Claims | 11/05 | 1977K | NA | NA | 2043K | 2041K |
| Nov 17 | 08:30 | Philadelphia Fed | Nov | 7.6 | 8.5 | 7.0 | 9.7 | -- |
| Nov 17 | 10:30 | Natural Gas Inventories | 11/12 | 30 bcf | NA | NA | 54 bcf |
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Technical Update
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Market Internal
NYSE :Lower than average volume @ 838.7M vs 931.6M
Advancers outpaced Decliners(adv/dec): 1564M/1408M
New highs outpaced low(high/low): 167/21
NASDAQ :
Higher than average volume @ 2075.4M vs 1859.0M
Advancers outpaced Decliners(adv/dec): 1748M/1091M
New highs outpaced low(high/low): 292/35
Advancers outpaced Decliners by 1.33 to 1 on higher volumes 2914.1 (+4.43%) than avg 2791 (+0.17%)
VOLATILITY S&P500 (VIX) :
13.72 +0.35 (+2.62%)
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Bonds, Currencies & Commodities
from Briefing.comBonds
Treasuries Extend Losses in Afternoon
- The U.S. Treasury market took another leg lower today although the losses were concentrated in the longer maturities after Fed Chair Yellen maintained her relatively dovish tone in her remarks before the JEC. While the case for a rate hike has begun to build rather rapidly as market-based inflation expectations have ripped higher over the past week, Yellen merely said that a rate increase could be appropriate "relatively soon." With a December 14 Fed rate hike seen as a virtual certainty by markets now, attention will turn forward to 2017 and timing of potential rate hikes under the new composition of the FOMC. The U.S. economic data released today showed a strong jump in housing starts during October which caused the Atlanta Fed to boost its model forecast for Q4 U.S. real GDP growth to 3.6% from 3.3% two days ago. Initial jobless claims fell to a 43-year low although that is a theme that is now taken for granted. The headline CPI grew in line with forecasts during October while the core missed slightly. The U.S. Dollar Index made a fresh 13-year high and now trades 0.53% higher at 100.94. The S&P 500 is up 0.39% to 2,185.4
- Yield Check:
- 2-yr: +2 bps to 1.02%
- 5-yr: +5 bps to 1.72%
- 10-yr: +6 bps to 2.28%
- 30-yr: +8 bps to 3.00%
- News:
- The headline U.S. CPI rose 0.4% m/m in October, in line with the Briefing.com consensus but better than September's growth of 0.3%
- The core CPI rose 0.1% m/m, missing the Briefing.com consensus of 0.2% and matching September's growth rate
- Housing starts jumped by the most since 1982 in October, rising to 1323K from 1054K in September. The Briefing.com consensus was 1178K
- Building permits fell to 1220K in October from 1225K in September. The Briefing.com consensus was 1200K
- Initial jobless claims dropped to 235K for the week ending November 12 from the prior reading of 254K. The Briefing.com consensus was 257K
- Continuing jobless claims fell to 1977K for the week ending November 5 from 2041K in the prior week
- This is the survey week for the November jobs report, so it bodes well for the release of that data on December 2
- The Philadelphia Fed Index of manufacturing activity fell to 7.6 for November from 9.7 in October. The Briefing.com consensus was 7.0
- Fed Chair Janet Yellen testified before the Joint Economic Committee of Congress today, saying that a rate increase could be appropriate "relatively soon"
- Yellen went on to say that she intends to stay at her post until January 2018, when her term expires
- The headline U.S. CPI rose 0.4% m/m in October, in line with the Briefing.com consensus but better than September's growth of 0.3%
- Commodities:
- WTI crude: -1.23% to $45.01/bbl.
- Gold: -0.93% to $1,212.4/troy oz.
- Copper: +0.71% to $2.4845/lb.
- Currencies:
- EUR/USD: -0.75% to 1.0623
- USD/JPY: +1.01% to 109.95
- Fed Speakers on Friday:
- St. Louis Fed President Bullard (FOMC voter) (05:30 ET)
- Kansas City Fed President George (FOMC voter) (09:30 ET)
- New York Fed President Dudley (FOMC voter) (09:35 ET)
- Dallas Fed President Kaplan (will vote in 2017) (13:30 ET)
- Fed Governor Powell (FOMC voter) (21:45 ET)
Currencies
Commodities
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Preview: Friday, 18 November 2016
Economic Data
-Other Events of Interest
Earnings
Commentary
Almost average volumes, adv/dec almost at 1.33. Money is still flowing out from bond to equity. Market is still optimistic.
Direction for 18 November 2016: UP
Direction for 18 November 2016: UP
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