Market Summary
from Briefing.comIndustry Watch
Strong: Financials, Technology, Health Care, Industrials, Consumer Discretionary
Weak:
- FBI Director Comey stands by prior decision not to recommend charges against Democratic nominee Clinton
- Global markets display a positive bias
- Safe-haven assets slide
- Earnings reporting season wears on
- Oil gains on output deal hopes
- Heavily-weighted financials, technology, and health care demonstrate relative strength
[BRIEFING.COM] The stock market began the week on a broadly higher note as diminished political uncertainty boosted risk appetite ahead of tomorrow's US presidential race. The Nasdaq Composite (+2.4%) finished slightly ahead of both the S&P 500 (+2.2%) and the Dow Jones Industrial Average (+2.1%).
The benchmark index avoided a tenth consecutive decline after FBI Director James Comey confirmed that he will not recommend that criminal charges be brought against Democratic presidential nominee Hillary Clinton. Recall that Mr. Comey made waves on October 28 by re-opening the probe into Mrs. Clinton's emails. The move followed the discovery of new emails from the former Secretary of State in an unrelated investigation.
The "October Surprise" fueled a flight from risk assets, feeding into a nine-session losing streak for the S&P 500. This also corresponded with a six-point move in the CBOE Volatility Index (18.73, -3.78, -16.9%) by last Friday's settlement. However, the decline in the broader market remained rather orderly, amounting to only a 1.9% loss over the entire nine session stretch.
Today's buying interest also appeared somewhat methodical as heavily-weighted financials (+2.6%), industrials (+2.5%), health care (+2.4%), and technology (+2.3%) paced the advance. The controlled action likely came with the understanding that the presidential race remains fairly tight. A number of presidential polls indicate that neither candidate holds a meaningful lead beyond the margin of error. Furthermore, congressional contests also bear their own risk for headline volatility as the market appears to favor a divided government outcome.
The S&P 500 (+2.2%) retraced all of its loss going back to October 28. All 11 sectors settled in the green with financials (+2.6%) and industrials (+2.5%) ahead of the pack.
The economically-sensitive financial sector (+2.6%) outperformed amid steepening in the yield curve, a rebound in crude oil futures, and positive quarterly results from European banking names. HSBC (HSBC 38.49, +1.46, +3.9%) issued some upbeat quarterly results ahead of today's session. Meanwhile, Dow component Goldman Sachs (GS 181.48, +5.56, +3.2%) finished ahead of the price-weighted average.
In the industrial sector (+2.5%), Rockwell Automation (ROK 124.24, +6.68) gained 5.7% after beating consensus estimates for the quarter and guiding full-year revenue estimates above consensus. Trucking names also led as Cummins (CMI 130.34, +6.03) rose 4.9% after being upgraded to "Buy" from "Hold" at Evercore ISI.
Biotechnology outperformed in the health care sector (+2.4%), evidenced by the 3.8% gain in the iShares Nasdaq Biotechnology ETF (IBB 261.17, +9.47). The ETF jumped as it recovered from last week's 3.4% decline. In the group, Biogen (BIIB 295.62, +18.62) spiked 6.7% after being upgraded to "Overweight" from "Neutral" at Piper Jaffray. Meanwhile, Humana (HUM 174.97, +7.49, +4.5%) led managed care names after last week's earning beat.
In the technology sector (+2.3%), Dow components Intel (INTC 34.68, +1.07) and Microsoft (MSFT 60.44, +1.73) gained 3.2% and 3.0%, respectively. Intel finished at the top of the price-weighted average.
Treasuries finished on a lower note as the long end of the curve underperformed. The yield on the 2-yr note finished higher by three basis points (0.82%) while the yield on the 10-yr note ended up five basis points (1.83%).
Today's trading volume was above the average of 861 million as more than 889 million shares changed hands at the NYSE floor.
Today's economic data was limited to the Consumer Credit report for September:
The benchmark index avoided a tenth consecutive decline after FBI Director James Comey confirmed that he will not recommend that criminal charges be brought against Democratic presidential nominee Hillary Clinton. Recall that Mr. Comey made waves on October 28 by re-opening the probe into Mrs. Clinton's emails. The move followed the discovery of new emails from the former Secretary of State in an unrelated investigation.
The "October Surprise" fueled a flight from risk assets, feeding into a nine-session losing streak for the S&P 500. This also corresponded with a six-point move in the CBOE Volatility Index (18.73, -3.78, -16.9%) by last Friday's settlement. However, the decline in the broader market remained rather orderly, amounting to only a 1.9% loss over the entire nine session stretch.
Today's buying interest also appeared somewhat methodical as heavily-weighted financials (+2.6%), industrials (+2.5%), health care (+2.4%), and technology (+2.3%) paced the advance. The controlled action likely came with the understanding that the presidential race remains fairly tight. A number of presidential polls indicate that neither candidate holds a meaningful lead beyond the margin of error. Furthermore, congressional contests also bear their own risk for headline volatility as the market appears to favor a divided government outcome.
The S&P 500 (+2.2%) retraced all of its loss going back to October 28. All 11 sectors settled in the green with financials (+2.6%) and industrials (+2.5%) ahead of the pack.
The economically-sensitive financial sector (+2.6%) outperformed amid steepening in the yield curve, a rebound in crude oil futures, and positive quarterly results from European banking names. HSBC (HSBC 38.49, +1.46, +3.9%) issued some upbeat quarterly results ahead of today's session. Meanwhile, Dow component Goldman Sachs (GS 181.48, +5.56, +3.2%) finished ahead of the price-weighted average.
In the industrial sector (+2.5%), Rockwell Automation (ROK 124.24, +6.68) gained 5.7% after beating consensus estimates for the quarter and guiding full-year revenue estimates above consensus. Trucking names also led as Cummins (CMI 130.34, +6.03) rose 4.9% after being upgraded to "Buy" from "Hold" at Evercore ISI.
Biotechnology outperformed in the health care sector (+2.4%), evidenced by the 3.8% gain in the iShares Nasdaq Biotechnology ETF (IBB 261.17, +9.47). The ETF jumped as it recovered from last week's 3.4% decline. In the group, Biogen (BIIB 295.62, +18.62) spiked 6.7% after being upgraded to "Overweight" from "Neutral" at Piper Jaffray. Meanwhile, Humana (HUM 174.97, +7.49, +4.5%) led managed care names after last week's earning beat.
In the technology sector (+2.3%), Dow components Intel (INTC 34.68, +1.07) and Microsoft (MSFT 60.44, +1.73) gained 3.2% and 3.0%, respectively. Intel finished at the top of the price-weighted average.
Treasuries finished on a lower note as the long end of the curve underperformed. The yield on the 2-yr note finished higher by three basis points (0.82%) while the yield on the 10-yr note ended up five basis points (1.83%).
Today's trading volume was above the average of 861 million as more than 889 million shares changed hands at the NYSE floor.
Today's economic data was limited to the Consumer Credit report for September:
- Total outstanding consumer credit increased by $19.3 billion in September (Briefing.com consensus $17.5 billion) after increasing an upwardly revised $26.8 billion (from $25.9 billion) in August.
- Russell 2000: +5.0% YTD
- Dow Jones: +4.8% YTD
- S&P 500: +4.3% YTD
- Nasdaq Composite: +3.2% YTD
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Economic Data
from Briefing.com| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Nov 07 | 15:00 | Consumer Credit | Sep | $19.3B | $18.0B | $17.5B | $26.8B | $25.9B |
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Technical Update
DOW JONES INDUSTRIAL AVERAGE18259.6 +371.32 (+2.08%)
Volume: 93.45 Mil above average of 91.42 Mil
Range: 17994.64 - 18263.3
S&P500 INDEX
2131.52 +46.34 (+2.22%)
Volume: 608.62 Mil above average of 586.77 Mil
Range: 2100.59 - 2132
DOW JONES TRANSPORTATION AVERAGE
8330.36 +255.22 (+3.16%)
Volume: 19.60 Mil above average of 16.44 Mil
Range: 8116.68 - 8330.91
NASDAQ COMPOSITE
5193.490234 +27.32 (+0.53%)
Volume: 1736.10 Mil below average of 1795.00 Mil
Range: 5145.299805 - 5214.169922
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Market Internal
NYSE :Higher than average volume @ 894.7M vs 886.8M
Advancers outpaced Decliners(adv/dec): 2444M/522M
New highs outpaced low(high/low): 64/27
NASDAQ :
Higher than average volume @ 1899.1M vs 1770.3M
Advancers outpaced Decliners(adv/dec): 2263M/562M
New lows outpaced highs(high/low): 70/76
Advancers outpaced Decliners by 4.34 to 1 on higher volumes 2793.8 (+5.14%) than avg 2657 (+0.52%)
VOLATILITY S&P500 (VIX) :
18.71 -3.80 (-16.88%)
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Bonds, Currencies & Commodities
from Briefing.comBonds
Treasuries Slide as Stocks and Dollar Jump, Election Awaits
- U.S. Treasuries took moderate losses today as risk aversion came to a sudden stop after weekend news that the FBI would not recommend criminal charges against Hillary Clinton. The news was like a matchstick to gasoline as the U.S. stock market became very oversold last week and the S&P 500 moved down to its 200-day moving average. In any event, the resurgence in risk appetites killed demand for safe-haven assets and Treasuries, gold, and the Japanese yen all took sharp losses. The only U.S. economic data release was the news that consumer credit grew by more than expected in September with the increase in non-revolving credit driving the beat. Tuesday is the U.S. general election and markets will be watching the presidential and Senate races closely. While Clinton has had a consistent if very narrow lead against Trump, the U.S. Senate is on a knife's edge and the result there will affect the future membership of the Board of Governors and the Supreme Court. The S&P 500 is trading up 1.96% to 2,125.9 and the U.S. Dollar Index is up 0.70% to 97.74. Chinese trade data will be released tonight
- Yield Check:
- 2-yr: +2 bps to 0.81%
- 5-yr: +5 bps to 1.29%
- 10-yr: +5 bps to 1.83%
- 30-yr: +4 bps to 2.60%
- News:
- Total outstanding consumer credit increased by $19.3 bln in September, exceeding the Briefing.com consensus of $17.5 bln
- August's growth was $26.8 bln, revised up from $25.9 bln
- The growth in September was driven by a $15.1 bln increase in non-revolving credit, which rose to $2.73 tln
- Revolving credit increased by $4.2 bln to $979 bln
- For Q3, consumer credit increased at a seasonally adjusted annual rate of 7% after increasing at a seasonally adjusted annual rate of 6.3% in September
- Total outstanding consumer credit increased by $19.3 bln in September, exceeding the Briefing.com consensus of $17.5 bln
- Commodities:
- WTI crude: +1.79% to $44.86/bbl.
- Gold: -1.79% to $1,281.2/troy oz.
- Copper: +2.14% to $2.3135/bbl.
- Currencies:
- EUR/USD: -0.89% to 1.1043
- USD/JPY: +1.38% to 104.52
- Data out Tuesday:
- September JOLTS – Job Openings (10:00 ET)
- Treasury Auction:
- $24 bln 3-year Treasury auction (results at 13:00 ET)
- Fed Speaker:
- Chicago Fed President Evans (will vote in 2017) (07:45 ET and 12:20 ET)
Currencies
Commodities
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Preview: Tuesday, 8 November 2016
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Nov 08 | 10:00 | JOLTS - Job Openings | Sep | NA | NA | 5.443M |
Other Events of Interest
Earnings
Commentary
Clearly a bullish day after Clinton got cleared by the FBI, sentiment from yesterday should carry on into the elections.
Direction for 8 Nov 16: UP
Direction for 8 Nov 16: UP
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