Market Summary
from Briefing.comIndustry Watch
Strong: Energy, Financials, Industrials, Materials
Weak: Health Care, Real Estate, Technology, Telecom Services, Utilities
- Agreement to lower oil supply to 32.5 million barrels/day reached at OPEC meeting in Vienna
- Economic data remains supportive of December rate hike
- Month-end flows likely to boost volume
[BRIEFING.COM] The stock market closed a strong month on a sloppy note as the S&P 500 (-0.3%) spent the day in a retreat from its opening high. The benchmark index narrowed its November gain to 3.4% while the Nasdaq Composite (-1.1%) underperformed, but still added 2.6% for the month. The Dow Jones Industrial Average (UNCH) outperformed today, staying true to its November (+5.4%) form.
Equity indices entered the day with an assortment of positive headlines to rally behind, but what we saw instead, was a continuation of the selling that showed up during the last hour of yesterday's session.
The positive headlines from this morning included:
Energy was one of just four pockets of relative strength on the sector leaderboard. Financials (+1.3%) and materials (+1.1%) also posted solid gains while industrials (-0.1%) ended just ahead of the S&P 500 thanks to strength in transport stocks after rail carrier CSX (CSX 35.83, +1.03) raised its guidance.
The financial sector extended its November gain to 13.7%, as the month-long theme of yield curve steepening continued. Selling in the 10-yr note sent its yield higher by eight basis points to 2.37% while the 2-yr yield rose two basis points to 1.11%. For the month, the 10-yr yield spiked 54 basis points while the 2-yr yield jumped 26 basis points.
Today's sharp uptick in Treasury yields weighed on rate-sensitive sectors. Utilities (-3.2%) retreated throughout the day while telecom services (-2.1%), consumer staples (-1.7%), and real estate (-1.2%) were under significant pressure from the start.
Elsewhere, the consumer discretionary sector (-0.9%) was pressured by losses in apparel retailers and homebuilders. The iShares Dow Jones US Home Construction ETF (ITB 27.34, -0.59) fell 2.1% after a disappointing Pending Home Sales report (+0.1%; Briefing.com consensus +0.7%), which made for a soft spot in today's batch of economic data. On the retail side, American Eagle Outfitters (AEO 16.56, -2.35) plunged 12.4% in reaction to disappointing guidance for the holiday period.
Two other influential sectors—health care (-1.0%) and technology (-1.2%)—kept the market under pressure throughout the day, and their underperformance was most notable when looking at the Nasdaq. Biotechnology was particularly weak, sending the iShares Nasdaq Biotechnology ETF (IBB 274.07, -6.24) lower by 2.2%. The biotech ETF narrowed its November gain to 6.8%.
Month-end flows led to increased participation as more than 1.5 billion shares changed hands at the NYSE floor.
Economic data included MBA Mortgage Index, ADP Employment, Personal Income/Spending, Chicago PMI, and Pending Home Sales:
Equity indices entered the day with an assortment of positive headlines to rally behind, but what we saw instead, was a continuation of the selling that showed up during the last hour of yesterday's session.
The positive headlines from this morning included:
- An official OPEC agreement to lower oil production to 32.5 million barrels per day
- Better than expected economic data, which supports the narrative that a December rate hike makes sense and is not being rushed
- News that Steve Mnuchin, who is known to be business-friendly, was nominated as Secretary of the Treasury
- Report that the European Central Bank is likely to extend its quantitative easing program past March
Energy was one of just four pockets of relative strength on the sector leaderboard. Financials (+1.3%) and materials (+1.1%) also posted solid gains while industrials (-0.1%) ended just ahead of the S&P 500 thanks to strength in transport stocks after rail carrier CSX (CSX 35.83, +1.03) raised its guidance.
The financial sector extended its November gain to 13.7%, as the month-long theme of yield curve steepening continued. Selling in the 10-yr note sent its yield higher by eight basis points to 2.37% while the 2-yr yield rose two basis points to 1.11%. For the month, the 10-yr yield spiked 54 basis points while the 2-yr yield jumped 26 basis points.
Today's sharp uptick in Treasury yields weighed on rate-sensitive sectors. Utilities (-3.2%) retreated throughout the day while telecom services (-2.1%), consumer staples (-1.7%), and real estate (-1.2%) were under significant pressure from the start.
Elsewhere, the consumer discretionary sector (-0.9%) was pressured by losses in apparel retailers and homebuilders. The iShares Dow Jones US Home Construction ETF (ITB 27.34, -0.59) fell 2.1% after a disappointing Pending Home Sales report (+0.1%; Briefing.com consensus +0.7%), which made for a soft spot in today's batch of economic data. On the retail side, American Eagle Outfitters (AEO 16.56, -2.35) plunged 12.4% in reaction to disappointing guidance for the holiday period.
Two other influential sectors—health care (-1.0%) and technology (-1.2%)—kept the market under pressure throughout the day, and their underperformance was most notable when looking at the Nasdaq. Biotechnology was particularly weak, sending the iShares Nasdaq Biotechnology ETF (IBB 274.07, -6.24) lower by 2.2%. The biotech ETF narrowed its November gain to 6.8%.
Month-end flows led to increased participation as more than 1.5 billion shares changed hands at the NYSE floor.
Economic data included MBA Mortgage Index, ADP Employment, Personal Income/Spending, Chicago PMI, and Pending Home Sales:
- The ADP National Employment Report showed an increase of 216,000 in November (Briefing.com consensus 160,000) while the October reading was revised down to 119,000 from 147,000.
- Personal income increased 0.6% in October (Briefing.com consensus +0.4%), bolstered by a 0.5% increase in compensation of employees and a 1.8% jump in personal interest income.
- Personal spending was up 0.3%, and while that was below the Briefing.com consensus estimate calling for 0.5% growth, it was essentially in-line with expectations when taking into account that personal spending growth in September was revised up to 0.7% from 0.5%.
- Core PCE Prices increased 0.1%, in-line with the Briefing.com consensus.
- The MNI Chicago Business Barometer checked in at 57.6 for November (Briefing.com consensus 52.0) versus 50.6 in October. The November reading marked the highest reading for the barometer since January 2015.
- New Orders increased to 63.2 from 52.5
- Pending Home Sales ticked up 0.1% in October (Briefing.com consensus 0.7%) and the September reading was revised down to 1.4% from 1.5%.
- The weekly MBA Mortgage Index fell 9.4% after rising 5.5% last week.
- Russell 2000 +16.3% YTD
- Dow Jones Industrial Average +9.8% YTD
- S&P 500 +7.6% YTD
- Nasdaq Composite +6.3% YTD
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Economic Data
from Briefing.com| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Nov 30 | 07:00 | MBA Mortgage Index | 11/26 | -9.4% | NA | NA | 5.5% | |
| Nov 30 | 08:15 | ADP Employment Change | Nov | 216K | 153K | 160K | 119K | 147K |
| Nov 30 | 08:30 | Personal Income | Oct | 0.6% | 0.3% | 0.4% | 0.4% | 0.3% |
| Nov 30 | 08:30 | Personal Spending | Oct | 0.3% | 0.4% | 0.5% | 0.7% | 0.5% |
| Nov 30 | 08:30 | Core PCE Price Index | Oct | 0.1% | 0.1% | 0.1% | 0.1% | -- |
| Nov 30 | 09:45 | Chicago PMI | Nov | 57.6 | 51.4 | 52.0 | 50.6 | -- |
| Nov 30 | 10:00 | Pending Home Sales | Oct | 0.1% | 1.0% | 0.7% | 1.4% | 1.5% |
| Nov 30 | 10:30 | Crude Inventories | 11/26 | -0.884M | NA | NA | -1.255M | |
| Nov 30 | 14:00 | Fed's Beige Book | Nov | NA | NA | NA |
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Technical Update
DOW JONES INDUSTRIAL AVERAGE19123.58 +1.98 (+0.01%)
Volume: 164.57 Mil above average of 91.45 Mil
Range: 19123.38 - 19225.29
S&P500 INDEX
2198.81 -5.85 (-0.27%)
Volume: 1055.35 Mil above average of 593.52 Mil
Range: 2198.81 - 2214.1
DOW JONES TRANSPORTATION AVERAGE
8981.65 +38.07 (+0.43%)
Volume: 23.19 Mil above average of 16.68 Mil
Range: 8906.36 - 9042.65
NASDAQ COMPOSITE
5323.680176 -56.24 (-1.05%)
Volume: 2064.43 Mil above average of 1826.71 Mil
Range: 5323.680176 - 5393.149902
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Market Internal
NYSE :Higher than average volume @ 1590.5M vs 897.9M
Decliners outpaced Advancers(adv/dec): 1178M/1796M
New highs outpaced low(high/low): 193/48
NASDAQ :
Higher than average volume @ 2029.6M vs 1812.6M
Decliners outpaced Advancers(adv/dec): 1011M/1825M
New highs outpaced low(high/low): 223/52
Decliners outpaced Advancers by 1.65 to 1 on higher volumes 3620.1 (+33.56%) than avg 2710 (-1.74%)
VOLATILITY S&P500 (VIX) :
13.33 +0.43 (+3.33%)
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Bonds, Currencies & Commodities
from Briefing.comBonds
Treasuries Drop Sharply but Recoup Some Losses
- U.S. Treasuries traded broadly lower today after OPEC's supply-cut agreement came into focus but ended well off of session lows as U.S. equities pushed lower and generated a flight-to-quality bid in government bonds. The U.S. economic data was better than expected but sluggish personal spending growth in October caused a sharp reduction in U.S. GDP growth estimates for the fourth quarter. The ADP Employment Change surprised on the upside for November (216K vs. Briefing.com consensus 160K) but included a sharp downward revision to October's reading. Steven Mnuchin is set to be Donald Trump's nominee for Treasury Secretary and he said today that the priorities for the new administration will be corporate tax reform and deregulation. The S&P 500 now trades up 0.03% to 2,205.2 and the U.S. Dollar Index is up 0.54% to 101.48
- Yield Check:
- 2-yr: +2 bps to 1.11%
- 5-yr: +5 bps to 1.82%
- 10-yr: +8 bps to 2.37%
- 30-yr: +7 bps to 3.02%
- News:
- U.S. personal income rose 0.6% m/m in October. The Briefing.com consensus was 0.4% and September's growth was 0.3%
- Personal spending increased by just 0.3% m/m in October, missing the Briefing.com consensus of 0.5%. September's growth was 0.5%
- Core PCE Prices grew 0.1% m/m, in line with the Briefing.com consensus and September's growth rate
- ADP estimated that the U.S. economy added 216K nonfarm jobs in November, well above the Briefing.com consensus of 160K. October's growth was revised down to 119K from 147K
- Goods-producing jobs fell by 11K in November
- Services-providing jobs grew by 228K in November
- U.S. pending home sales grew just 0.1% m/m in October (1.8% y/y), missing the Briefing.com consensus of 0.7%. September's growth was 1.5%
- The Chicago PMI jumped to 57.6 for November from 50.6 for October, beating the Briefing.com consensus of 52.0. November's reading was the highest since January 2015
- Dallas Fed President Kaplan (FOMC voter in 2017) said today that he favors taking action to remove some amount of accommodation but that rate rises should be undertaken "gradually and patiently
- Donald Trump's Treasury Secretary nominee, Steven Mnuchin, said today that he will consider issuing debt with maturities longer than 30 years
- The Fed's Beige Book said that the U.S. economy continued to expand across most of the 12 regions from early October through mid-November
- Demand for manufactured products was mixed during the current reporting period, with the strong dollar being cited as a headwind to more robust demand in a few Districts
- Modest to moderate increases in capital investment are expected in several other Districts
- A tightening in labor market conditions was reported by seven Districts, with modest employment growth on balance
- U.S. personal income rose 0.6% m/m in October. The Briefing.com consensus was 0.4% and September's growth was 0.3%
- Commodities:
- WTI crude: +8.27% to $48.97/bbl.
- Gold: -1.34% to $1,172/troy oz.
- Copper: +0.84% to 2.632/lb.
- Currencies:
- EUR/USD: -0.54% to 1.0599
- USD/JPY: +1.84% to 114.30
- Data out Thursday:
- November Challenger Job Cuts (07:30 ET)
- Initial Jobless Claims for the week ending 11/26 and Continuing Jobless Claims for the week ending 11/19 (08:30 ET)
- October Construction Spending (10:00 ET)
- November ISM Manufacturing Index (10:00 ET)
- Natural Gas Inventories for the week ending 11/26 (10:30 ET)
- November Auto and Truck Sales (14:00 ET)
- Fed Speakers:
- Cleveland Fed President Mester (FOMC voter in 2016) (08:30 ET)
- Dallas Fed President Kaplan (FOMC voter in 2017) (09:00 ET)
Currencies
Commodities
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Preview: Thursday, 1 December 2016
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Dec 01 | 07:30 | Challenger Job Cuts | Nov | NA | NA | -24.7% | ||
| Dec 01 | 08:30 | Initial Claims | 11/26 | 255K | 253K | 251K | ||
| Dec 01 | 08:30 | Continuing Claims | 11/19 | NA | NA | 2043K | ||
| Dec 01 | 10:00 | Construction Spending | Oct | 0.3% | 0.6% | -0.4% | ||
| Dec 01 | 10:00 | ISM Index | Nov | 51.5 | 52.1 | 51.9 | ||
| Dec 01 | 10:30 | Natural Gas Inventories | 11/26 | NA | NA | -2 bcf | ||
| Dec 01 | 14:00 | Auto Sales | Nov | NA | NA | 5.12M | ||
| Dec 01 | 14:00 | Truck Sales | Nov | NA | NA | 9.18M |
Other Events of Interest
Earnings
Commentary
-
Direction for 1 December 2016:
Direction for 1 December 2016:
No comments:
Post a Comment