Market Summary
from Briefing.comIndustry Watch
Strong: Energy, Technology, Telecom Services, Utilities, Consumer Staples
Weak:
- Global bonds make up some ground, driving yields lower
- Oil rises on renewed OPEC deal speculation
- Germany's Q3 GDP +1.5% year-over-year (consensus 1.8%; last 3.1%)
- Berkshire Hathaway (BRK.B) filing reveals news stakes in airline industry: AAL, DAL, UAL (also adds that LUV was bought after end of quarter)
- Boston Fed President Rosengren (FOMC voter): conditions for a hike in December are basically there; expects Fed to reach its inflation target in 2017
- Heavily-weighted technology outperforms
[BRIEFING.COM] The stock market ended the Tuesday affair on a higher note as investors continued to adjust their post-election positioning. The Nasdaq Composite (+1.1%) finished well ahead of the S&P 500 (+0.8%) while the Dow Jones Industrial Average (+0.3%) lagged, but still notched its seventh consecutive gain. The three indices have rallied between 1.7% and 4.3% so far in November.
The Dow Jones Industrial Average (+0.2%) began the day under pressure as some mild profit taking developed. Large cap names that make up the price-weighted average have seen a stream of inflows in recent days as speculation mounts regarding increased US fiscal spending. This, in turn, has driven up inflation expectations.
The reflationary trade has boosted sectors more directly linked to the potential implementation of large-scale public works projects -- financials (+0.1%; month-to-date: +12.2%), industrials (+0.3%; month-to-date: +7.3%), and materials (+0.4%; month-to-date: +3.5%) -- while pressuring rate-sensitive groups -- telecom services (+2.1%; month-to-date: -1.2%) and utilities (+1.7%; month-to-date: -5.6%). Today's action, however, saw a bounce for sectors that were oversold on a short term basis.
The bond market also enjoyed a reprieve from short-term oversold conditions. The yield on the 2-yr note finished flat at 1.00% while the yield on the benchmark 10-yr note declined three basis points to 2.23%. The yield on the 2-yr note is up 15 basis points from October's settlement while the yield on the benchmark 10-yr note has gained 40 basis points so far in November. The Treasury complex shrugged off largely upbeat economic data and somewhat hawkish jawboning from Federal Reserve officials.
The energy sector (+2.7%) finished in the lead as crude oil futures rebounded. WTI crude finished the day higher by 5.9% ($45.87/bbl; +$2.57) ahead of this evening's inventory data from the American Petroleum Institute. The Department of Energy will also release weekly stockpile data tomorrow at 10:30 ET.
In the technology sector (+1.3%), large cap tech names rebounded from recent selling interest. Alphabet (GOOG 758.49, +22.41) and Facebook (FB 117.20, +2.12) gained a respective 3.0% and 1.8%. The two have been under pressure in recent days as market leadership shifted away from F.A.N.G. names. Top-weighted Apple (AAPL 107.11, +1.40) added 1.3%, narrowing its post-election loss to 3.6%. Separately, the PHLX Semiconductor Index settled higher by 1.9%.
The economically-sensitive financial sector (+0.1%) finished at the bottom of the leaderboard, but still extended its November gain to 12.2%. The sector has been bolstered by the reflationary trade in recent sessions as sharp steepening in the yield curve boosted the group's earnings prospects. Furthermore, speculation has arisen that the sector may face less regulation under President-elect Trump's administration. The SPDR S&P Bank ETF (KBE 40.20, +0.20) finished higher by 0.5% after beginning the day with a 2.4% loss. The broader sector is up 2.3% so far this week.
Biotechnology pulled back from its recent gain as the iShares Nasdaq Biotechnology ETF (IBB 290.91, -2.18) slipped 0.7%. The sub-industry has gained in recent days as investors dial back expectations for drug pricing regulations under a GOP-led Congress and Trump White House. The broader health care sector has gained 4.5% this month, but remains down 2.4% so far in 2016.
Today's trading volume was above the average of 986 million as more than 1.1 billion shares changed hands at the NYSE floor.
Today's economic data included Retail Sales for October, Import/Export Prices for October, Empire Manufacturing for November, and Business Inventories for September:
Tomorrow's economic data will include the 7:00 ET release of the weekly MBA Mortgage Index and the 8:30 ET release of October PPI (Briefing.com consensus +0.3%). Meanwhile, October Industrial Production (Briefing.com consensus +0.2%) and Capacity Utilization (Briefing.com consensus 75.5%) will cross the wires at 9:15 ET. The day's data will be capped off with the November NAHB Housing Market Index (Briefing.com consensus 64) and September Net Long-Term TIC Flows, which will be released at 10:00 ET and 16:00 ET, respectively.
The Dow Jones Industrial Average (+0.2%) began the day under pressure as some mild profit taking developed. Large cap names that make up the price-weighted average have seen a stream of inflows in recent days as speculation mounts regarding increased US fiscal spending. This, in turn, has driven up inflation expectations.
The reflationary trade has boosted sectors more directly linked to the potential implementation of large-scale public works projects -- financials (+0.1%; month-to-date: +12.2%), industrials (+0.3%; month-to-date: +7.3%), and materials (+0.4%; month-to-date: +3.5%) -- while pressuring rate-sensitive groups -- telecom services (+2.1%; month-to-date: -1.2%) and utilities (+1.7%; month-to-date: -5.6%). Today's action, however, saw a bounce for sectors that were oversold on a short term basis.
The bond market also enjoyed a reprieve from short-term oversold conditions. The yield on the 2-yr note finished flat at 1.00% while the yield on the benchmark 10-yr note declined three basis points to 2.23%. The yield on the 2-yr note is up 15 basis points from October's settlement while the yield on the benchmark 10-yr note has gained 40 basis points so far in November. The Treasury complex shrugged off largely upbeat economic data and somewhat hawkish jawboning from Federal Reserve officials.
The energy sector (+2.7%) finished in the lead as crude oil futures rebounded. WTI crude finished the day higher by 5.9% ($45.87/bbl; +$2.57) ahead of this evening's inventory data from the American Petroleum Institute. The Department of Energy will also release weekly stockpile data tomorrow at 10:30 ET.
In the technology sector (+1.3%), large cap tech names rebounded from recent selling interest. Alphabet (GOOG 758.49, +22.41) and Facebook (FB 117.20, +2.12) gained a respective 3.0% and 1.8%. The two have been under pressure in recent days as market leadership shifted away from F.A.N.G. names. Top-weighted Apple (AAPL 107.11, +1.40) added 1.3%, narrowing its post-election loss to 3.6%. Separately, the PHLX Semiconductor Index settled higher by 1.9%.
The economically-sensitive financial sector (+0.1%) finished at the bottom of the leaderboard, but still extended its November gain to 12.2%. The sector has been bolstered by the reflationary trade in recent sessions as sharp steepening in the yield curve boosted the group's earnings prospects. Furthermore, speculation has arisen that the sector may face less regulation under President-elect Trump's administration. The SPDR S&P Bank ETF (KBE 40.20, +0.20) finished higher by 0.5% after beginning the day with a 2.4% loss. The broader sector is up 2.3% so far this week.
Biotechnology pulled back from its recent gain as the iShares Nasdaq Biotechnology ETF (IBB 290.91, -2.18) slipped 0.7%. The sub-industry has gained in recent days as investors dial back expectations for drug pricing regulations under a GOP-led Congress and Trump White House. The broader health care sector has gained 4.5% this month, but remains down 2.4% so far in 2016.
Today's trading volume was above the average of 986 million as more than 1.1 billion shares changed hands at the NYSE floor.
Today's economic data included Retail Sales for October, Import/Export Prices for October, Empire Manufacturing for November, and Business Inventories for September:
- Retail sales increased 0.8% in October (Briefing.com consensus +0.6%) on top of an upwardly revised 1.0% increase (from +0.6%) for September.
- Excluding autos, retail sales also jumped 0.8% (Briefing.com consensus +0.5%) on top of an upwardly revised 0.7% increase (from +0.5%) for September.
- Import prices increased 0.5% in October, but were down 0.1% excluding fuel. Export prices increased 0.2% in October and they were also up 0.2%, excluding agriculture.
- October marked the seventh time in the last eight months that import prices have risen. Export price have risen in six of the past seven months.
- The Empire Manufacturing Survey for November checked in at 1.5 (Briefing.com consensus -0.5) versus -6.8 in October.
- Total business inventories increased 0.1% in September (Briefing.com consensus +0.2%) after increasing 0.2% in August.
Tomorrow's economic data will include the 7:00 ET release of the weekly MBA Mortgage Index and the 8:30 ET release of October PPI (Briefing.com consensus +0.3%). Meanwhile, October Industrial Production (Briefing.com consensus +0.2%) and Capacity Utilization (Briefing.com consensus 75.5%) will cross the wires at 9:15 ET. The day's data will be capped off with the November NAHB Housing Market Index (Briefing.com consensus 64) and September Net Long-Term TIC Flows, which will be released at 10:00 ET and 16:00 ET, respectively.
- Russell 2000: +14.8% YTD
- Dow Jones: +8.6% YTD
- S&P 500: +6.7% YTD
- Nasdaq Composite: +5.4% 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 16 | 07:00 | MBA Mortgage Index | 11/12 | -9.2% | NA | NA | -1.2% | |
| Nov 16 | 08:30 | PPI | Oct | 0.0% | 0.3% | 0.3% | 0.3% | -- |
| Nov 16 | 08:30 | Core PPI | Oct | -0.2% | 0.2% | 0.2% | 0.2% | -- |
| Nov 16 | 09:15 | Industrial Production | Oct | 0.0% | 0.1% | 0.2% | -0.2% | 0.1% |
| Nov 16 | 09:15 | Capacity Utilization | Oct | 75.3% | 75.6% | 75.5% | 75.4% | -- |
| Nov 16 | 10:00 | NAHB Housing Market Index | Nov | 63 | 65 | 64 | 63 | -- |
| Nov 16 | 10:30 | Crude Inventories | 11/12 | 5.274M | NA | NA | 2.432M | |
| Nov 16 | 16:00 | Net Long-Term TIC Flows | Sep | -$26.2B | NA | NA | $45.5B | $48.3B |
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Technical Update
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Market Internal
NYSE :Lower than average volume @ 875.8M vs 930.3M
Advancers outpaced Decliners(adv/dec): 1574M/1414M
New highs outpaced low(high/low): 98/18
NASDAQ :
Higher than average volume @ 2044.1M vs 1855.6M
Advancers outpaced Decliners(adv/dec): 1487M/1345M
New highs outpaced low(high/low): 204/33
Advancers outpaced Decliners by 1.11 to 1 on higher volumes 2919.9 (+4.81%) than avg 2786 (-0.20%)
VOLATILITY S&P500 (VIX) :
13.72 +0.35 (+2.62%)
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Bonds, Currencies & Commodities
from Briefing.comBonds
Treasuries Find Relief Rally Despite Strong Retail Sales
- The U.S. Treasury market made modest gains today as any bargain hunting and short covering activity was limited by a stronger-than-expected U.S. Retail Sales report for October. The headline number beat estimates (0.8% m/m vs. Briefing.com consensus 0.5%) but so did the control group, which is a direct input to the GDP calculation. The Atlanta Fed's GDPNow model forecast for Q4 U.S. growth was revised up to 3.3% from 3.1% last week. Boston Fed President Rosengren, who votes on the FOMC this year, said that the FOMC won't easily be swayed from voting to hike rates on December 14. Fed Vice Chair Fischer said that the recent jump in bond yields was not particularly troubling but Fed Governor Tarullo said he saw grounds for caution on rate hikes. As members of the Board of Governors, Fischer and Tarullo always vote on the FOMC. The S&P 500 now trades up 0.64% to 2,178 and the U.S. Dollar Index is up 0.11% to 100.22
- Yield Check:
- 2-yr: unch at 1.00%
- 5-yr: -1 bp to 1.68%
- 10-yr: -3 bps to 2.23%
- 30-yr: -5 bps to 2.96%
- News:
- U.S. retail sales beat estimates in October. The headline retail sales growth rate was 0.8% m/m, beating the Briefing.com consensus of 0.6%. September's growth was revised up to 1.0% from the initial reading of 0.6%
- Retail sales excluding automobiles grew 0.8% m/m, exceeding the Briefing.com consensus of 0.5%. September's number was revised up to 0.7% from 0.5%
- The retail sales control group is the one used in the GDP calculation and excludes volatile categories like cars, gasoline, and building materials. That measure rose by 0.8% m/m, beating estimates and September's 0.3% growth
- Import prices excluding oil fell 0.1% m/m in October after remaining unchanged in September
- Export prices excluding agriculture rose 0.2% m/m in October after jumping by 0.4% in September
- The Empire Manufacturing Index rose more than expected to 1.5 for November from -6.8 for October. The Briefing.com consensus was -0.5
- Fed Governor Daniel Tarullo, one of the most dovish members of the FOMC, said this morning that it makes sense to have a discussion about hiking rates but he still sees grounds for caution
- Boston Fed President Eric Rosengren, who dissented in favor of a rate hike in September, said today that significantly bad news would be necessary to sway the Fed away from hiking rates at the December 10 FOMC meeting
- U.S. business inventories grew by just 0.1% m/m in September, missing the Briefing.com consensus of 0.2%. September's growth was also 0.2%
- U.S. retail sales beat estimates in October. The headline retail sales growth rate was 0.8% m/m, beating the Briefing.com consensus of 0.6%. September's growth was revised up to 1.0% from the initial reading of 0.6%
- Commodities:
- WTI crude: +5.79% to $45.83/bbl.
- Gold: +0.20% to $1,224.2/troy oz.
- Copper: -0.63% to $2.505/lb.
- Currencies:
- EUR/USD: -0.41% to 1.0721
- USD/JPY: +1.29% to 109.27
- Data out Wednesday:
- MBA Mortgage Index for the week ending 11/12 (07:00 ET)
- October PPI and Core PPI (08:30 ET)
- October Industrial Production and Capacity Utilization (09:15 ET)
- November NAHB Housing Market Index (10:00 ET)
- Crude Inventories for the week ending 11/12 (10:30 ET)
- September Net Long-Term TIC Flows (16:00 ET)
- Fed Speakers:
- St. Louis Fed President Bullard (FOMC voter) (03:00 ET)
- Minneapolis Fed President Kashkari (will vote in 2017) (07:30 ET)
- Philadelphia Fed President Harker (will vote in 2017) (17:30 ET)
Currencies
Commodities
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Preview: Thursday, 17 November 2016
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Nov 17 | 08:30 | CPI | Oct | 0.4% | 0.4% | 0.3% | -- | |
| Nov 17 | 08:30 | Core CPI | Oct | 0.2% | 0.2% | 0.1% | -- | |
| Nov 17 | 08:30 | Housing Starts | Oct | 1160K | 1178K | 1054K | 1047K | |
| Nov 17 | 08:30 | Building Permits | Oct | 1210K | 1200K | 1225K | -- | |
| Nov 17 | 08:30 | Initial Claims | 11/12 | 258K | 257K | 254K | -- | |
| Nov 17 | 08:30 | Continuing Claims | 11/05 | NA | NA | 2043K | 2041K | |
| Nov 17 | 08:30 | Philadelphia Fed | Nov | 8.5 | 7.0 | 9.7 | -- | |
| Nov 17 | 10:30 | Natural Gas Inventories | 11/12 | NA | NA | 54 bcf |
Other Events of Interest
Earnings
Commentary
Will we see a 8th candle reversal on the DOW? Market Internals are still pretty much bullish, except the lower than average volumes.
Direction for 17 November 2016: UP
Direction for 17 November 2016: UP
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