Market Summary
from Briefing.comIndustry Watch
Strong: Technology, Telecom Services, Real Estate
Weak: Financials, Energy, Industrials
- Uncertainty is in the air related to the change of administrations in Washington
[BRIEFING.COM] Equity indices opened the week on a down note, unable to overcome the uncertainty surrounding the transfer of political power in Washington D.C. An afternoon rebound helped the market erase a portion of its loss, but the S&P 500 still finished lower by 0.3% while the Nasdaq (unch) finished just below its flat line.
The trading session was defined by risk-off action, leading to a downtick in the U.S. dollar and an uptick in the Treasury market. The 10-yr yield finished seven basis points lower at 2.40%, while the U.S. Dollar Index (100.14, -0.63) closed down 0.6%, a level not seen since early December.
However, the dollar's relative weakness was not enough to offset concerns about a bump in U.S. crude oil production, which pushed WTI crude down 0.9% to $52.75/bbl. Naturally, the energy sector followed, closing lower by 1.1% to finish at the bottom of today's leaderboard.
Crude oil doesn't deserve all of the blame, as Halliburton (HAL 54.80, -1.65) also contributed to the energy sector's decline, losing 2.9% after missing revenue estimates. McDonald's (MCD 121.38, -0.88) also reported quarterly results this morning. The company beat estimates, but shares declined 0.9% amid concerns about the strength of first-quarter results.
Yet, despite McDonald's downbeat report, the consumer discretionary sector (+0.1%) outperformed the broader market, finishing just above its flat line. Homebuilders had a hand in the sector's resistance to selling pressure, evidenced by the 0.4% jump in the iShares U.S. Home Construction ETF (ITB 27.91, +0.12). Also of note, the sector's top component, Amazon (AMZN 817.88, +9.55) finished higher by 1.2% after the New York Post reported that the company will be entering the auto parts retail space.
The technology sector was also able to resist the market's bearish trend, finishing with a modest 0.1% gain. Top components like Facebook (FB 128.93, +1.89), Alphabet (GOOGL 844.43, +16.26), Cisco Systems (CSCO 30.27, +0.17), and Visa (V 82.15, +0.31) were able to outpace losses from the semiconductor industry. The PHLX Semiconductor Index finished the day lower by 0.7%.
On the non-cyclical side, real estate (+0.6%) finished at the top of the leaderboard, while telecom services (+0.5%) and consumer staples (-0.1%) also outperformed. Conversely, utilities (-0.5%) and health care (-0.5%) had a rough showing. In top news from the health care space, a federal court ruling blocked Humana's (HUM 205.02, +4.49) pending merger with Aetna (AET 119.20, -3.33). Humana jumped 2.2% on the ruling, while Aetna lost 2.7%.
Looking ahead, the earnings season kicks into gear this week with around 20.0% of the S&P 500 set to report quarterly results. Yahoo! (YHOO 42.40, +0.35) is scheduled to report after today's close, while Dow components 3M (MMM 178.51, +0.02), DuPont (DD 72.78, -0.25), and Johnson & Johnson (JNJ 113.94, -0.21) will report on Tuesday morning.
Investors did not receive any economic data on Monday, with the first report of the week, December Existing Home Sales (Briefing.com consensus 5.55 million), scheduled for tomorrow morning at 10:00 am ET.
The trading session was defined by risk-off action, leading to a downtick in the U.S. dollar and an uptick in the Treasury market. The 10-yr yield finished seven basis points lower at 2.40%, while the U.S. Dollar Index (100.14, -0.63) closed down 0.6%, a level not seen since early December.
However, the dollar's relative weakness was not enough to offset concerns about a bump in U.S. crude oil production, which pushed WTI crude down 0.9% to $52.75/bbl. Naturally, the energy sector followed, closing lower by 1.1% to finish at the bottom of today's leaderboard.
Crude oil doesn't deserve all of the blame, as Halliburton (HAL 54.80, -1.65) also contributed to the energy sector's decline, losing 2.9% after missing revenue estimates. McDonald's (MCD 121.38, -0.88) also reported quarterly results this morning. The company beat estimates, but shares declined 0.9% amid concerns about the strength of first-quarter results.
Yet, despite McDonald's downbeat report, the consumer discretionary sector (+0.1%) outperformed the broader market, finishing just above its flat line. Homebuilders had a hand in the sector's resistance to selling pressure, evidenced by the 0.4% jump in the iShares U.S. Home Construction ETF (ITB 27.91, +0.12). Also of note, the sector's top component, Amazon (AMZN 817.88, +9.55) finished higher by 1.2% after the New York Post reported that the company will be entering the auto parts retail space.
The technology sector was also able to resist the market's bearish trend, finishing with a modest 0.1% gain. Top components like Facebook (FB 128.93, +1.89), Alphabet (GOOGL 844.43, +16.26), Cisco Systems (CSCO 30.27, +0.17), and Visa (V 82.15, +0.31) were able to outpace losses from the semiconductor industry. The PHLX Semiconductor Index finished the day lower by 0.7%.
On the non-cyclical side, real estate (+0.6%) finished at the top of the leaderboard, while telecom services (+0.5%) and consumer staples (-0.1%) also outperformed. Conversely, utilities (-0.5%) and health care (-0.5%) had a rough showing. In top news from the health care space, a federal court ruling blocked Humana's (HUM 205.02, +4.49) pending merger with Aetna (AET 119.20, -3.33). Humana jumped 2.2% on the ruling, while Aetna lost 2.7%.
Looking ahead, the earnings season kicks into gear this week with around 20.0% of the S&P 500 set to report quarterly results. Yahoo! (YHOO 42.40, +0.35) is scheduled to report after today's close, while Dow components 3M (MMM 178.51, +0.02), DuPont (DD 72.78, -0.25), and Johnson & Johnson (JNJ 113.94, -0.21) will report on Tuesday morning.
Investors did not receive any economic data on Monday, with the first report of the week, December Existing Home Sales (Briefing.com consensus 5.55 million), scheduled for tomorrow morning at 10:00 am ET.
- Russell 2000 -0.7% YTD
- Dow Jones Industrial Average +0.2% YTD
- S&P 500 +1.2% YTD
- Nasdaq Composite +3.2% YTD
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Economic Data
from Briefing.comNo Data
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Technical Update
DOW JONES INDUSTRIAL AVERAGE19799.85 -27.40 (-0.14%)
Volume: 326.69 Mil above average of 232.40 Mil
Range: 19732.36 - 19833.98
S&P 500 INDEX
2265.2 -6.11 (-0.27%)
Volume: 1990.55 Mil above average of 1554.82 Mil
Range: 2257.02 - 2271.78
DOW JONES TRANSPORTATION AVERAGE
9138.19 -86.38 (-0.94%)
Volume: 68.09 Mil above average of 44.22 Mil
Range: 9091.17 - 9219.44
NASDAQ COMPOSITE
5552.939941 -2.39 (-0.04%)
Volume: 1650.29 Mil below average of 1872.51 Mil
Range: 5522.689941 - 5564.140137
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Market Internal
NYSE :Lower than average volume @ 754.7M vs 891.8M
Advancers outpaced Decliners(adv/dec): 1591M/1328M
New highs outpaced low(high/low): 78/13
NASDAQ :
Lower than average volume @ 1634.5M vs 1828.8M
Decliners outpaced Advancers(adv/dec): 1173M/1668M
New highs outpaced low(high/low): 102/47
Decliners outpaced Advancers by 1.08 to 1 on lower volumes 2389.2 ( -12.18%) than avg 2721 (-0.22%)
VOLATILITY S&P500 (VIX) :
11.77 +0.23 (+1.99%)
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Bonds
from Briefing.comMarket Moving Factors
- Dollar, pound, Swissy, and gold touch multi-week highs
- Richmond Fed President Lacker (non-voter, set to retire in October): says Fed at risk of getting behind curve on inflation (Lacker is the most hawkish participant of FOMC)
Treasuries Rally as Stocks Stumble and Greenback Drops
- U.S. Treasuries rallied sharply today as real money buyers appeared to soak up selling pressure from heavily short hedge funds. Three attempts at a rally -- both overnight and twice after the open -- were rejected but the fourth rally succeeded and Treasuries now sit back in the middle of last week's ranges. We have been looking for consolidation in Treasury yields after a huge move up in the second half of 2016 and are encouraged by the whipsawing action. The U.S. Dollar Index fell 0.60% to 100.14 as Treasury yields fell and traders positioned for a wave of economic news from Europe on Tuesday. Preliminary readings for purchasing managers' indices in the eurozone are due out and the U.K.'s Supreme Court will rule on whether Parliament must vote to trigger the actual Brexit event. There was no U.S. economic data today but Richmond Fed President Lacker said that the Fed "is at risk of getting behind the curve" on inflation. Lacker does not vote this year, is set to retire on October 1, and is an uber-hawk so his remarks should be taken with a cup of salt. Tuesday's U.S. session will feature existing home sales data and the first auction of the week -- $26 bln of 2-year notes. The S&P 500 is down 0.27% to 2,265.2
- Yield Check:
- 2-yr: -5 bps to 1.14%
- 5-yr: -7 bps to 1.86%
- 10-yr: -7 bps to 2.40%
- 30-yr: -6 bps to 2.99%
- News:
- President Trump signed an executive order today to withdraw from Trans-Pacific Partnership negotiations and pledged to renegotiate NAFA (the Norther-American Free Trade Agreement)
- Richmond Fed President Lacker (non-FOMC voter) said that he feared the Fed is getting behind the curve and that he supported hiking rates to remove accommodation
- Commodities:
- WTI crude: -0.79% to $52.80/bbl.
- Gold: +0.88% to $1,215.5/troy oz.
- Copper: +0.78% to $2.645/lb.
- Currencies:
- EUR/USD: +0.43% to 1.0749
- USD/JPY: -1.33% to 113.01
- Data out Tuesday:
- December Existing Home Sales (10:00 ET)
- Treasury Auction:
- $26 bln 2-year Treasury auction (results at 13:00 ET)
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Preview: Tuesday, 24 January 2017
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 24 | 10:00 | Existing Home Sales | Dec | 5.58M | 5.55M | 5.61M |
Commentary
Market sentiment still feels more bearish amidst the uncertainty, VIX ticking down, Bond yields decreasing.
Direction for Tuesday, 24 January 2017: Down
Daily Accuracy: 7/11 64%
Direction for Tuesday, 24 January 2017: Down
Daily Accuracy: 7/11 64%
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