Market Summary
from Briefing.comIndustry Watch
Strong: Health Care, Financials, Industrials, Materials, Energy
Weak: Utilities, Real Estate, Consumer Staples
- Donald Trump is elected the 45th President of the United States
- The GOP maintains control of both houses of Congress
- Bond yields rise amid fiscal stimulus hopes
- Crude oil gains on mixed EIA inventory data
- Heavily-weighted health care, financials, and industrials outperform
[BRIEFING.COM] The stock market ended the Wednesday affair on a broadly higher note as participants re-positioned to account for a Donald Trump presidency. Mr. Trump recorded an upset victory against Democratic presidential nominee Hillary Clinton last evening. The Dow Jones Industrial Average (+1.4%) finished ahead of both the S&P 500 (+1.1%) and the Nasdaq Composite (+1.1%).
Global markets endured a volatile overnight session as unexpected results in the US presidential race caught investors offside. Political pundits and recent polling data were proved wrong as Mr. Trump clinched the 270 electoral votes necessary to become the 45th President of the United States. The Republican nominee also helped ensure that the GOP maintained control of both houses of Congress.
The upset victory was largely unexpected, throwing a proverbial wrench in the market's expectations for the election. Index futures initially plunged on the news as rising uncertainty fueled a risk off posture. Futures on the benchmark index initially fell 5.0%, triggering a trading halt.
The broader market was able to stabilize in the early morning as President-elect Trump helped calm investors. Mr. Trump indicated in his acceptance speech that the country must come together after a fractious election and relationships must be forged overseas. The President-elect also underscored that infrastructure spending will play a large role in his administration.
Equity indices showed marked resilience as the group erased marginal losses by mid-morning. Resilience in the broader market continued to stoke risk appetite as investors worked to price-in expectations of aggressive infrastructure spending and responded to a lower likelihood for price controls in the health care space.
The benchmark index ended near its best level of the day as seven sectors finished in positive territory. The heavyweight financial (+4.1%) and health care (+3.4%) sectors led the pack while industrials (+2.4%) and materials (+2.1%) also outperformed. On the other hand, rate-sensitive utilities (-3.7%) and real estate (-2.3%) finished with the largest losses.
The economically-sensitive financial sector (+4.1%) outperformed as rapid steepening in the yield curve bolstered the earnings prospects for banking names. The sub-group was also on the rise amid hopes for reduced regulations under a Trump administration. Dow components Goldman Sachs (GS 192.63, +10.71) and JPMorgan Chase (JPM 73.25, +3.22) finished higher by 5.9% and 4.6%, respectively.
Biotechnology and pharmaceutical names led in the health care sector (+3.4%) as the groups shrugged off recent concerns regarding potential drug pricing measures. The iShares Nasdaq Biotechnology ETF (IBB 284.99, +23.27) ended higher by 8.9% while Dow component Pfizer (PFE 32.12, +2.12, +7.1%) finished at the top of the price-weighted average. On the flipside, managed health care names were under pressure as participants speculated about a potential repeal of the Affordable Care Act by the next administration. Dow component UnitedHealth (UNH 141.90, -1.00) fell 0.7%, rounding out the index.
In the industrial sector (+2.4%), defense and machinery names displayed relative strength as investors expressed some optimism for potential infrastructure projects and defense spending. Lockheed Martin (LMT 253.46, +14.27) and Caterpillar (CAT 91.20, +6.52) rose 6.0% and 7.7%, respectively.
The energy sector gained 1.5% as crude oil snapped a recent losing streak. The energy component rose following a mixed inventory report from the Department of Energy. The EIA reported that crude oil inventories increased by 2.43 million barrels (consensus: +1.33 million) while gasoline stockpiles fell by 2.84 million barrels (consensus: -1.03 million). WTI crude finished higher by 0.6% ($45.20/bbl; +$0.25).
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 (0.90%) while the yield on the 10-yr note surged 22 basis points (2.08%).
Today's trading volume was above the average of 877 million as more than 1.39 billion shares changed hands at the NYSE floor.
Today's economic data was limited to the weekly MBA Mortgage Index and the Wholesale Inventory Report for September:
Global markets endured a volatile overnight session as unexpected results in the US presidential race caught investors offside. Political pundits and recent polling data were proved wrong as Mr. Trump clinched the 270 electoral votes necessary to become the 45th President of the United States. The Republican nominee also helped ensure that the GOP maintained control of both houses of Congress.
The upset victory was largely unexpected, throwing a proverbial wrench in the market's expectations for the election. Index futures initially plunged on the news as rising uncertainty fueled a risk off posture. Futures on the benchmark index initially fell 5.0%, triggering a trading halt.
The broader market was able to stabilize in the early morning as President-elect Trump helped calm investors. Mr. Trump indicated in his acceptance speech that the country must come together after a fractious election and relationships must be forged overseas. The President-elect also underscored that infrastructure spending will play a large role in his administration.
Equity indices showed marked resilience as the group erased marginal losses by mid-morning. Resilience in the broader market continued to stoke risk appetite as investors worked to price-in expectations of aggressive infrastructure spending and responded to a lower likelihood for price controls in the health care space.
The benchmark index ended near its best level of the day as seven sectors finished in positive territory. The heavyweight financial (+4.1%) and health care (+3.4%) sectors led the pack while industrials (+2.4%) and materials (+2.1%) also outperformed. On the other hand, rate-sensitive utilities (-3.7%) and real estate (-2.3%) finished with the largest losses.
The economically-sensitive financial sector (+4.1%) outperformed as rapid steepening in the yield curve bolstered the earnings prospects for banking names. The sub-group was also on the rise amid hopes for reduced regulations under a Trump administration. Dow components Goldman Sachs (GS 192.63, +10.71) and JPMorgan Chase (JPM 73.25, +3.22) finished higher by 5.9% and 4.6%, respectively.
Biotechnology and pharmaceutical names led in the health care sector (+3.4%) as the groups shrugged off recent concerns regarding potential drug pricing measures. The iShares Nasdaq Biotechnology ETF (IBB 284.99, +23.27) ended higher by 8.9% while Dow component Pfizer (PFE 32.12, +2.12, +7.1%) finished at the top of the price-weighted average. On the flipside, managed health care names were under pressure as participants speculated about a potential repeal of the Affordable Care Act by the next administration. Dow component UnitedHealth (UNH 141.90, -1.00) fell 0.7%, rounding out the index.
In the industrial sector (+2.4%), defense and machinery names displayed relative strength as investors expressed some optimism for potential infrastructure projects and defense spending. Lockheed Martin (LMT 253.46, +14.27) and Caterpillar (CAT 91.20, +6.52) rose 6.0% and 7.7%, respectively.
The energy sector gained 1.5% as crude oil snapped a recent losing streak. The energy component rose following a mixed inventory report from the Department of Energy. The EIA reported that crude oil inventories increased by 2.43 million barrels (consensus: +1.33 million) while gasoline stockpiles fell by 2.84 million barrels (consensus: -1.03 million). WTI crude finished higher by 0.6% ($45.20/bbl; +$0.25).
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 (0.90%) while the yield on the 10-yr note surged 22 basis points (2.08%).
Today's trading volume was above the average of 877 million as more than 1.39 billion shares changed hands at the NYSE floor.
Today's economic data was limited to the weekly MBA Mortgage Index and the Wholesale Inventory Report for September:
- The MBA Mortgage Index indicated that mortgage applications fell 1.2% in the week ending November 5. This followed a 1.2% decline in the prior week.
- Wholesale inventories increased 0.1% month-over-month in September (Briefing.com consensus +0.2%) following an upwardly revised 0.1% decline (from -0.2%) in August.
- Wholesale sales were up 0.2% on the heels of an unrevised 0.7% increase in August.
- Russell 2000: +8.2% YTD
- Dow Jones: +6.7% YTD
- S&P 500: +5.8% YTD
- Nasdaq Composite: +4.9% 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 09 | 07:00 | MBA Mortgage Index | 11/05 | -1.2% | NA | NA | -1.2% | |
| Nov 09 | 10:00 | Wholesale Inventories | Sep | 0.1% | 0.2% | 0.2% | -0.1% | -0.2% |
| Nov 09 | 10:30 | Crude Inventories | 11/05 | 2.432M | NA | NA | 14.420M |
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Technical Update
DOW JONES INDUSTRIAL AVERAGE18589.69 +256.95 (+1.40%)
Volume: 173.11 Mil above average of 92.02 Mil
S&P500 INDEX
2163.26 +23.70 (+1.11%)
Volume: 992.75 Mil above average of 591.50 Mil
Range: 2125.35 - 2170.1
DOW JONES TRANSPORTATION AVERAGE
8397.31 +69.02 (+0.83%)
Volume: 29.45 Mil above average of 16.77 Mil
Range: 8189.62 - 8425.45
NASDAQ COMPOSITE
5251.069824 +57.58 (+1.11%)
Volume: 2824.56 Mil above average of 1820.27 Mil
Range: 5143.859863 - 5258.990234
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Market Internal
NYSE :Higher than average volume @ 1409.1M vs 893.2M
Advancers outpaced Decliners(adv/dec): 1677M/1338M
New highs outpaced low(high/low): 186/109
NASDAQ :
Higher than average volume @ 2807.1M vs 1783.0M
Advancers outpaced Decliners(adv/dec): 2065M/799M
New highs outpaced low(high/low): 212/107
Advancers outpaced Decliners by 1.75 to 1 on higher volumes 4216.2 (+57.55%) than avg 2676 (+0.41%)
VOLATILITY S&P500 (VIX) :
14.38 -4.36 (-23.27%)
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Bonds, Currencies & Commodities
from Briefing.comBonds
Treasuries Swoon as Investors Prepare for Higher Supply
- The 10-year Treasury yield saw its biggest jump in three years today as investors prepared for a President Trump and a supportive Congress to sharply increase U.S. government borrowing. Trump will not even be inaugurated until late January, much less have his plan passed by then, but his campaign proposals were radical enough that traders are selling first and asking questions later. The U.S. Treasury sold $23 bln of 10-year notes at 2.020% and drew the lowest bid-to-cover ratio since 2009. Minneapolis Fed President Kashkari said that Fed policy is supporting equity and real estate prices, which didn't shock many people. The S&P 500 is up 1.21% after losing roughly 6% overnight. The U.S. Dollar Index is up 0.63% to 98.48
- Yield Check:
- 2-yr: +2 bps to 0.89%
- 5-yr: +15 bps to 1.48%
- 10-yr: +22 bps to 2.07%
- 30-yr: +26 bps to 2.87%
- News:
- Donald Trump won Tuesday's presidential election and the Republican party is set to control both the House and Senate
- The Commerce Department reported that wholesale inventories grew just 0.1% m/m in September. The Briefing.com consensus was 0.2% and August's 0.2% decline was revised up to -0.1%
- The key takeaway from the report is that the inventory-to-sales ratio held steady at 1.33, which points to the potential for some improved pricing power if demand picks up; however, there is a still a ways to go there considering that ratio stood closer to 1.20 a few years ago
- $23 bln 10-year Treasury auction
- High yield: 2.020%
- Bid-to-cover: 2.22
- Indirect bid: 52.5%
- Direct bid: 8.3%
- Minneapolis Fed President Neel Kashkari said today that the Fed is creating bubbles and that Fed policy has supported stock and real estate prices
- Kashkari will vote on the FOMC in 2017
- Commodities:
- WTI crude: +0.60% to $45.25/bbl.
- Gold: -0.09% to $1,273.3/troy oz.
- Copper: +3.47% to $2.4625/lb.
- Currencies:
- EUR/USD: -0.75% to $1.0935
- USD/JPY: +0.77% to 105.77
- Data out Thursday:
- Initial Jobless Claims for the week ending 11/5 and Continuing Jobless Claims for the week ending 10/29 (08:30 ET)
- Natural Gas Inventories for the week ending 10/29 (10:30 ET)
- October Treasury Budget (14:00 ET)
- Treasury Auction:
- $15 bln 30-year Treasury auction (results at 13:00 ET)
- Fed Speaker:
- St. Louis Fed President Bullard (FOMC voter) (09:15 ET)
Currencies
Commodities
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Preview: Thursday, 10 November 2016
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Nov 10 | 08:30 | Initial Claims | 11/05 | 265K | 262K | 265K | -- | |
| Nov 10 | 08:30 | Continuing Claims | 10/29 | NA | NA | 2023K | 2026K | |
| Nov 10 | 10:30 | Natural Gas Inventories | 11/05 | NA | NA | 54 bcf | ||
| Nov 10 | 14:00 | Treasury Budget | Oct | NA | NA | -$136.6B |
Other Events of Interest
Earnings
Commentary
Strong market internals with high volume, VIX and bonds shows the market greed.
Direction for 10 Nov 16: UP
Direction for 10 Nov 16: UP
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