Market Summary
from Briefing.comIndustry Watch
Strong: Energy
Weak: Telecom Services, Utilities, Real Estate, Materials, Consumer Discretionary, Technology
Market Moving Factors
- Bank of Japan and Reserve Bank of Australia hold policy rates steady
- China's manufacturing activity picks up in October: October Manufacturing PMI: 51.2 (last: 50.4); and Caixin Manufacturing PMI: 51.2 (last: 50.1)
- Increasing political uncertainty)
- Quarterly earnings pour in)
- Heavily-weighted technology and consumer discretionary underperform
Averages End Lower as Mixed Earnings Weigh
[BRIEFING.COM] The stock market ended the Tuesday affair on a lower note as equities endured a broad-based selloff. The downturn was stoked by rising political uncertainty, further losses in crude oil, volatility in the Treasury market, and weakness in the heavily-weighted technology (-0.8%) and consumer discretionary (-0.8%) sectors. The Russell 2000 ended down 1.0% while the Nasdaq Composite (-0.7%) and the S&P 500 (-0.7%) each finished with narrower losses.
Equity indices stumbled in the first hour of trade as a move higher in bond yields and shifting U.S. polling data derailed an initial move higher. Mixed U.S. economic data halted a retreat in the Treasury complex this morning. The October ISM Index registered at 51.9 (Briefing.com consensus 51.7), signaling continued expansion. Meanwhile, September Construction Spending fell 0.4% (Briefing.com consensus +0.5%) after declining 0.5% in the prior month.
The Treasury complex carved out a session low in the opening hour of trade, pressuring defensively-oriented real estate (-2.0%), utilities (-1.8%), and telecom services (-1.0%). The yield on the benchmark 10-yr note rose to 1.88% in the opening hour before backpedaling from that level.
The U.S. presidential race was also in focus today after a new joint poll conducted by ABC News and the Washington Post showed that Republican nominee Donald Trump is leading Democratic nominee Hillary Clinton. The reversal of fortune comes on the heels of last Friday's announcement that the FBI is investigating Mrs. Clinton regarding recently-discovered emails.
The poll unnerved participants who had previously priced in a Clinton presidency. Accordingly, the CBOE Volatility Index (VIX 18.58, +1.52) rose more than one point.
The broader market narrowed its loss in the final hour, but ten sectors finished in negative territory. The heavily-weighted consumer discretionary (-0.8%) and the technology (-0.8%) sectors finished behind the broader market.
Retail names underperformed in the consumer discretionary space (-0.8%) as L Brands (LB 66.50, -5.69) plunged 7.9%. The company issued an earnings warning, stating that it sees third-quarter earnings in the lower end of previously issued guidance. The company also estimated that October same-store sales would be short of consensus estimates, rising just 1.0%. The broader SPDR S&P Retail ETF (XRT 41.53, -0.70) fell 1.7%.
The technology sector (-0.9%) displayed relative weakness as top-weighted Apple (AAPL 111.47, -2.07) fell by 1.8%. The name was under pressure after a UBS Survey indicated that demand in China remains weak. The stock has declined 5.7% since the company reported underwhelming quarterly results and guidance last Tuesday. Elsewhere, the PHLX Semiconductor Index fell 0.9%.
In the health care sector (-0.5%), Dow component Pfizer (PFE 31.07, -0.64, -2.0%) finished at the bottom of the price-weighted average. The pharmaceutical name reported weaker-than-expect bottom line results and narrowed its full-year guidance. Separately, the biotechnology sub-group outperformed as the iShares Nasdaq Biotechnology ETF (IBB 259.09, +2.41) gained 0.9%.
The commodity-sensitive energy space (+0.1%) eked out a slim gain as crude erased the bulk of an intraday loss, shedding 0.3% to $46.68/bbl. Investors will receive the latest inventory data from the American Petroleum Institute this evening while the Department of Energy will release its more influential inventory data tomorrow morning at 10:30 ET.
Bond prices jumped in the late afternoon as extended losses in equities and some short covering pushed yields lower. The yield on the 10-yr note finished the day up one basis point (1.84%).
Today's trading volume was above the average of 850 million as more than one billion shares changed hands at the NYSE floor.
Today's economic data was limited to September Construction Spending and the October ISM Index:
Tomorrow's economic data will include the 7:00 ET release of the weekly MBA Mortgage Index and the 8:15 ET release of the ADP Employment Change Report for October (Briefing.com consensus 165k). Separately, the Fed will issue its November Policy Statement at 14:00 ET.
Equity indices stumbled in the first hour of trade as a move higher in bond yields and shifting U.S. polling data derailed an initial move higher. Mixed U.S. economic data halted a retreat in the Treasury complex this morning. The October ISM Index registered at 51.9 (Briefing.com consensus 51.7), signaling continued expansion. Meanwhile, September Construction Spending fell 0.4% (Briefing.com consensus +0.5%) after declining 0.5% in the prior month.
The Treasury complex carved out a session low in the opening hour of trade, pressuring defensively-oriented real estate (-2.0%), utilities (-1.8%), and telecom services (-1.0%). The yield on the benchmark 10-yr note rose to 1.88% in the opening hour before backpedaling from that level.
The U.S. presidential race was also in focus today after a new joint poll conducted by ABC News and the Washington Post showed that Republican nominee Donald Trump is leading Democratic nominee Hillary Clinton. The reversal of fortune comes on the heels of last Friday's announcement that the FBI is investigating Mrs. Clinton regarding recently-discovered emails.
The poll unnerved participants who had previously priced in a Clinton presidency. Accordingly, the CBOE Volatility Index (VIX 18.58, +1.52) rose more than one point.
The broader market narrowed its loss in the final hour, but ten sectors finished in negative territory. The heavily-weighted consumer discretionary (-0.8%) and the technology (-0.8%) sectors finished behind the broader market.
Retail names underperformed in the consumer discretionary space (-0.8%) as L Brands (LB 66.50, -5.69) plunged 7.9%. The company issued an earnings warning, stating that it sees third-quarter earnings in the lower end of previously issued guidance. The company also estimated that October same-store sales would be short of consensus estimates, rising just 1.0%. The broader SPDR S&P Retail ETF (XRT 41.53, -0.70) fell 1.7%.
The technology sector (-0.9%) displayed relative weakness as top-weighted Apple (AAPL 111.47, -2.07) fell by 1.8%. The name was under pressure after a UBS Survey indicated that demand in China remains weak. The stock has declined 5.7% since the company reported underwhelming quarterly results and guidance last Tuesday. Elsewhere, the PHLX Semiconductor Index fell 0.9%.
In the health care sector (-0.5%), Dow component Pfizer (PFE 31.07, -0.64, -2.0%) finished at the bottom of the price-weighted average. The pharmaceutical name reported weaker-than-expect bottom line results and narrowed its full-year guidance. Separately, the biotechnology sub-group outperformed as the iShares Nasdaq Biotechnology ETF (IBB 259.09, +2.41) gained 0.9%.
The commodity-sensitive energy space (+0.1%) eked out a slim gain as crude erased the bulk of an intraday loss, shedding 0.3% to $46.68/bbl. Investors will receive the latest inventory data from the American Petroleum Institute this evening while the Department of Energy will release its more influential inventory data tomorrow morning at 10:30 ET.
Bond prices jumped in the late afternoon as extended losses in equities and some short covering pushed yields lower. The yield on the 10-yr note finished the day up one basis point (1.84%).
Today's trading volume was above the average of 850 million as more than one billion shares changed hands at the NYSE floor.
Today's economic data was limited to September Construction Spending and the October ISM Index:
- The ISM Manufacturing Index for October checked in at 51.9 (Briefing.com consensus 51.7), up from 51.5 in September.
- Construction spending declined 0.4% in September (Briefing.com consensus +0.5%) on the heels of an upwardly revised 0.5% decline (from -0.7%) for August.
Tomorrow's economic data will include the 7:00 ET release of the weekly MBA Mortgage Index and the 8:15 ET release of the ADP Employment Change Report for October (Briefing.com consensus 165k). Separately, the Fed will issue its November Policy Statement at 14:00 ET.
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Economic Data
from Briefing.com| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Nov 01 | 10:00 | ISM Index | Oct | 51.9 | 51.9 | 51.7 | 51.5 | -- |
| Nov 01 | 10:00 | Construction Spending | Sep | -0.4% | 0.5% | 0.5% | -0.5% | -0.7% |
| Nov 01 | 14:00 | Auto Sales | Oct | 5.31M | NA | NA | 5.30M | |
| Nov 01 | 14:00 | Truck Sales | Oct | 9.27M | NA | NA | 8.85M |
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Technical Update
DOW JONES INDUSTRIAL AVERAGE18037.1 -105.32 (-0.58%)
Volume: 101.28 Mil above average of 89.79 Mil
Range: 17940.84 - 18177.01
S&P500 INDEX
2111.72 -14.43 (-0.68%)
Volume: 712.60 Mil above average of 572.56 Mil
Range: 2097.85 - 2131.45
DOW JONES TRANSPORTATION AVERAGE
8008.38 -49.64 (-0.62%)
Volume: 16.32 Mil above average of 16.06 Mil
Range: 7958.79 - 8095.91
NASDAQ COMPOSITE
5153.580078 -35.56 (-0.69%)
Volume: 1878.65 Mil above average of 1753.05 Mil
Range: 5112.319824 - 5201.129883
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Market Internal
NYSE :Higher than average volume @ 1065.1M vs 867.4M
Decliners outpaced Advancers(adv/dec): 701M/2258M
New lows outpaced highs(high/low): 23/77
NASDAQ :
Higher than average volume @ 1875.8M vs 1734.6M
Decliners outpaced Advancers(adv/dec): 847M/1942M
New lows outpaced highs(high/low): 38/157
Decliners outpaced Advancers by 2.71 to 1 on higher volumes 2940.9 (+13.02%) than avg 2602 (+0.21%)
VOLATILITY S&P500 (VIX) :
18.56 +1.50 (+8.79%)
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Bonds, Currencies & Commodities
from Briefing.comBonds
Treasuries Jump on Short-Covering as Stocks Swoon
- U.S. Treasuries reversed early losses today to end with modest gains as the S&P 500 fell to a three-month low, now losing 0.99% to 2,105.2. Today's weakness in stocks is being attributed to narrowing polls in the U.S. presidential election although the 538 blog still gives Clinton a 72% probability of victory. Tepid earnings growth and recent weakness in oil prices are weighing on share prices too. The U.S. economic data releases today were a bit negative on balance and weaker construction spending for September led the Atlanta Fed's GDPNow model to reduce its forecast for Q4 GDP growth to 2.3% from 2.7% on Monday. Eurozone sovereign debt yields from France to Italy touched multi-month highs today at the 10-year maturity on worries about the future of the European Central Bank's monetary easing measures. Traders now look ahead to Wednesday's ADP Employment Change for October and the FOMC's rate decision and accompanying statement. The U.S. Dollar Index is down 0.74% to 97.72
- Yield Check:
- 2-yr: -2 bps to 0.83%
- 5-yr: -2 bps to 1.29%
- 10-yr: unch at 1.82%
- 30-yr: unch at 2.58%
- News:
- The ISM Manufacturing Index rose to 51.9 for October from 51.5 in the prior month. The Briefing.com consensus was 51.7
- New orders fell to 52.1 from 55.1; production climbed to 54.6 from 52.8; export orders rose to 52.5 from 52.0; unfilled orders fell to 45.5 from 49.5; the employment subindex rose to a four-month high of 52.9; inventories fell to 47.5 from 49.5; prices paid rose to 54.5 from 53.0, corroborating the strength in inflation from Markit's report
- U.S. construction spending fell 0.4% m/m in September after falling 0.5% in August (revised up from -0.7%). The Briefing.com consensus was +0.5%
- The key takeaway from the report is that nonresidential spending continues to remain weak and a drag on the U.S. economy
- The downturn in September was driven entirely by a 0.9% decline in nonresidential spending, which was down 0.7% year-over-year. Total residential spending was up 0.4% and is up 0.6% year-over-year
- Markit's U.S. Manufacturing PMI was revised up to a one-year high of 53.4 for October from the preliminary reading of 53.2. The index printed 51.5 in September
- The GDPNow model forecast for Q4 U.S. real GDP growth is down to 2.3% today from 2.7% on Monday
- The forecasts of the Q4 growth rates of real consumer spending and real nonresidential equipment investment declined from 2.4% to 2.1% and 4.3% to 2.7%, respectively
- The forecasts of the growth rates of real residential investment and real nonresidential structures investment declined from 3.2% to 2.2% and 0.5% to -0.7%, respectively
- The ISM Manufacturing Index rose to 51.9 for October from 51.5 in the prior month. The Briefing.com consensus was 51.7
- Commodities:
- WTI crude: -0.34% to $46.70/bbl.
- Gold: +1.55% to $1,292.8/troy oz.
- Copper: +0.98% to $2.2265/lb.
- Currencies:
- EUR/USD: +0.82% to 1.1064
- USD/JPY: -0.85% to 103.98
- Data out Wednesday:
- MBA Mortgage Index for the week ending 10/29 (07:00 ET)
- October ADP Employment Change (08:15 ET)
- Crude Inventories for the week ending 10/29 (10:30 ET)
- November FOMC Rate Decision (14:00 ET)
Currencies
Commodities
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Preview: Wednesday, 2 November 2016
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Nov 02 | 07:00 | MBA Mortgage Index | 10/29 | NA | NA | -4.1% | ||
| Nov 02 | 08:15 | ADP Employment Change | Oct | 172K | 165K | 154K | ||
| Nov 02 | 10:30 | Crude Inventories | 10/29 | NA | NA | -0.553M | ||
| Nov 02 | 14:00 | FOMC Rate Decision | Nov | 0.375% | 0.375% | 0.375% |
Other Events of Interest
Earnings
Commentary
It feels like the factor that moved today's market was the election polls, fears of a possible Trump presidency is building. I think the market over-sold today, so I am expecting a slight recovery tomorrow.
Direction: UP
Direction: UP
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