Market Summary
from Briefing.comIndustry Watch
Strong: Utilities, Consumer Staples
Weak: Energy, Materials
- Investors digest the implications of President Trump's executive order, which temporarily suspends the U.S. refugee program and bars nationals of seven countries-- Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen -- from entering the U.S.
- December Personal Income data came in relatively close to consensus expectations.
[BRIEFING.COM] Investors decided to err on the side of caution to open a week full of earnings reports and influential economic data. The S&P 500 finished the day lower by 0.6%, while the Nasdaq (-0.8%) closed just a tick below the benchmark index.
Equity indices faced broad-based selling pressure from the start of Monday's session, with many fingers pointing to President Trump's executive order, which suspended the U.S. refugee program and temporarily restricted nationals of seven countries--Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen--from entering the United States, as the driver of the bearish tone.
It is a defensible position, as that order has engendered some concerns about protectionism taking root and has detracted from the market's preferred policy focus of corporate tax reform, but the market will face a full event calendar this week, so some caution is warranted.
The Federal Reserve will release its latest policy statement on Wednesday, which, combined with Friday's release of the January Employment Situation report (Briefing.com consensus 170K), could build a case for a rate hike at the subsequent FOMC meeting. In addition, a full slate of quarterly reports awaits with Apple (AAPL 121.63, -0.32) scheduled to release its results after Tuesday's closing bell.
Today's risk-off tone was most apparent in the stock market while Treasuries finished the day little changed with the benchmark 10-yr yield remaining at 2.48%. The U.S. Dollar Index finished just below its flat line with a loss of 0.1%, masking the dollar's 1.2% decline against the Japanese yen (113.73). It is worth noting the Bank of Japan will release its latest policy statement overnight.
Nine of eleven spaces finished the day in negative territory. Countercyclical sectors populated the upper half of Monday's leaderboard, with consumer staples (+0.1%) eking out a slim gain. The consumer discretionary sector (-0.1%) was the best performer on the cyclical side, finishing just a tick from its flat line. Walt Disney (DIS 110.94, +1.64) underpinned the sector's performance, adding 1.5%, after the company's stock was upgraded to 'Overweight' from 'Equal-Weight' at Morgan Stanley.
The energy sector occupied the bottom spot on the leaderboard, finishing 1.8% lower after pressure on multiple fronts. On the earnings side, Enterprise Products' (EPD 28.45, -0.64) mixed earnings report was met with a downbeat response, pushing the company's stock lower by 2.2%. Crude oil also hurt the energy space, closing its trading day 1.1% lower at $52.62/bbl.
The top-weighted technology sector (-0.8%) finished a tick lower than the benchmark index with top components like Alphabet (GOOGL 823.83, -21.20), Microsoft (MSFT 65.13, -0.65), and Facebook (FB 130.98, -1.20) falling between 0.9% and 2.5%.
Today's economic data included December Personal Income/Spending and December Pending Home Sales:
Equity indices faced broad-based selling pressure from the start of Monday's session, with many fingers pointing to President Trump's executive order, which suspended the U.S. refugee program and temporarily restricted nationals of seven countries--Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen--from entering the United States, as the driver of the bearish tone.
It is a defensible position, as that order has engendered some concerns about protectionism taking root and has detracted from the market's preferred policy focus of corporate tax reform, but the market will face a full event calendar this week, so some caution is warranted.
The Federal Reserve will release its latest policy statement on Wednesday, which, combined with Friday's release of the January Employment Situation report (Briefing.com consensus 170K), could build a case for a rate hike at the subsequent FOMC meeting. In addition, a full slate of quarterly reports awaits with Apple (AAPL 121.63, -0.32) scheduled to release its results after Tuesday's closing bell.
Today's risk-off tone was most apparent in the stock market while Treasuries finished the day little changed with the benchmark 10-yr yield remaining at 2.48%. The U.S. Dollar Index finished just below its flat line with a loss of 0.1%, masking the dollar's 1.2% decline against the Japanese yen (113.73). It is worth noting the Bank of Japan will release its latest policy statement overnight.
Nine of eleven spaces finished the day in negative territory. Countercyclical sectors populated the upper half of Monday's leaderboard, with consumer staples (+0.1%) eking out a slim gain. The consumer discretionary sector (-0.1%) was the best performer on the cyclical side, finishing just a tick from its flat line. Walt Disney (DIS 110.94, +1.64) underpinned the sector's performance, adding 1.5%, after the company's stock was upgraded to 'Overweight' from 'Equal-Weight' at Morgan Stanley.
The energy sector occupied the bottom spot on the leaderboard, finishing 1.8% lower after pressure on multiple fronts. On the earnings side, Enterprise Products' (EPD 28.45, -0.64) mixed earnings report was met with a downbeat response, pushing the company's stock lower by 2.2%. Crude oil also hurt the energy space, closing its trading day 1.1% lower at $52.62/bbl.
The top-weighted technology sector (-0.8%) finished a tick lower than the benchmark index with top components like Alphabet (GOOGL 823.83, -21.20), Microsoft (MSFT 65.13, -0.65), and Facebook (FB 130.98, -1.20) falling between 0.9% and 2.5%.
Today's economic data included December Personal Income/Spending and December Pending Home Sales:
- December personal income rose 0.3% while the Briefing.com consensus expected an increase of 0.4%. Meanwhile, December personal spending increased 0.5% while the Briefing.com consensus expected a reading of 0.4%. The November Personal Spending reading was left unrevised at 0.2% while November Personal Income was revised to 0.1% from 0.0%. Core PCE prices for December rose 0.1% (Briefing.com consensus 0.2%), while the November reading was left unrevised at 0.0%.
- With spending rising faster than income, the drop in the personal savings rate suggests consumers were spending out of savings -- something that wouldn't typically be done unless it was out of necessity or consumers were feeling better about their income prospects.
- Pending Home Sales for December rose 1.6% while the Briefing.com consensus expected an increase of 1.3%. Today's reading follows a 2.5% downtick in November.
- Russell 2000 -0.3% YTD
- Dow Jones Industrial Average +1.1% YTD
- S&P 500 1.9% YTD
- Nasdaq Composite 4.3% YTD
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Economic Data
from Briefing.com| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 30 | 08:30 | Personal Income | Dec | 0.3% | 0.4% | 0.4% | 0.1% | 0.0% |
| Jan 30 | 08:30 | Personal Spending | Dec | 0.5% | 0.4% | 0.4% | 0.2% | -- |
| Jan 30 | 08:30 | PCE Prices - Core | Dec | 0.1% | 0.2% | 0.2% | 0.0% | -- |
| Jan 30 | 10:00 | Pending Home Sales | Dec | 1.6% | 1.0% | 1.3% | -2.5% |
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Technical Update
DOW JONES INDUSTRIAL AVERAGE19971.13 -122.65 (-0.61%)
Volume: 317.28 Mil above average of 255.12 Mil
Range: 19870.39 - 20028.62
S&P 500 INDEX
2280.9 -13.79 (-0.60%)
Volume: 2108.08 Mil above average of 1693.50 Mil
Range: 2268.04 - 2286.01
DOW JONES TRANSPORTATION AVERAGE
9329.34 -114.94 (-1.22%)
Volume: 89.21 Mil above average of 49.86 Mil
Range: 9216.29 - 9368.54
NASDAQ COMPOSITE
5660.779785 +5.60 (+0.10%)
Volume: 1663.40 Mil below average of 1808.37 Mil
Range: 5643.899902 - 5667.450195
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Market Internal
NYSE :Higher than average volume @ 873.1M vs 861.5M
Decliners outpaced Advancers(adv/dec): 887M/2082M
New highs outpaced low(high/low): 41/25
NASDAQ :
Lower than average volume @ 1763.6M vs 1777.1M
Decliners outpaced Advancers(adv/dec): 682M/2220M
New highs outpaced low(high/low): 56/46
Decliners outpaced Advancers by 2.74 to 1 on lower volumes 2636.7 ( -0.07%) than avg 2639 (-1.56%)
VOLATILITY S&P500 (VIX) :
11.88 +1.30 (+12.29%)
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Bonds
from Briefing.comMarket Moving Factors
- December Personal Income: Actual 0.3%, Briefing.com consensus 0.4%, Prior 0.1% (revised from 0.0%)
- Personal Spending: Actual 0.5%, Briefing.com consensus 0.4%, Prior 0.2%
- PCE Prices -- Core: Actual 0.1%, Briefing.com consensus 0.2%, Prior 0.0%
- December Pending Home Sales: Actual 1.6%, Briefing.com consensus 1.3%, Prior -2.5%
- Greece's 10-year note yield hits 7.60% from an intraday low of 7.10% after IMF says debt burden unsustainable
Treasuries Trade Slightly Higher
- U.S. Treasuries traded mostly higher today but the 30-year bond lagged behind despite a 0.83% drop in the S&P 500 to 2,275.4. Market participants said that part of the steepening in the yield curve was due to Microsoft's announcement of a $17 bln debt offering across 7-maturities from 3-40 years. Personal income growth for December came up a bit short (0.3% m/m) and personal spending growth was ahead of estimates (0.5% m/m) but both of these numbers were imputed from the Q4 GDP report last week. Core PCE Prices are now growing at 1.7% y/y. The U.S. Dollar Index now trades down 0.11% to 100.42. The Bank of Japan meets tonight and a raft of Japanese and eurozone economic data is due out
- Yield Check:
- 2-yr: -2 bps to 1.20%
- 5-yr: -1 bp to 1.94%
- 10-yr: unch at 2.48%
- 30-yr: +2 bps to 3.08%
- News:
- U.S. personal incomes reportedly grew 0.3% m/m in December. That was short of the Briefing.com consensus for 0.4% growth but much better than the 0.1% change for November (revised up from 0.0%)
- Personal spending grew by 0.5% m/m in December, topping both the Briefing.com consensus (0.4%) and November's 0.2% growth
- Core PCE Prices were up just 0.1% m/m, missing the Briefing.com consensus of 0.2%. Core PCE Prices were unchanged in November
- The item of note was the PCE Price Index, which was up 1.6% year-over-year versus a 1.4% increase seen in November. That is tracking toward the Fed's longer-run target of 2.0%, which is what Fed officials will want to see to justify further rate hikes. The core PCE Price Index, which increased 0.1% in December (Briefing.com consensus +0.2%), was up 1.7% year-over-year, unchanged from November
- Pending home sales rose by 1.6% m/m in December, beating out the Briefing.com consensus for 1.3% growth. Sales were down 2.5% in November
- Sovereign debt yields of eurozone periphery countries traded sharply higher today after the IMF said that Greece's public debt burden was unsustainable. The IMF's participation is considered a prerequisite by some eurozone countries for their agreement to continued debt relief for Greece
- U.S. personal incomes reportedly grew 0.3% m/m in December. That was short of the Briefing.com consensus for 0.4% growth but much better than the 0.1% change for November (revised up from 0.0%)
- Commodities:
- WTI crude: -1.03% to $52.62/bbl.
- Gold: +0.54% to $1,194.8/troy oz.
- Copper: -0.87% to $2.666/lb.
- Currencies:
- EUR/USD: -0.02% to 1.0696
- USD/JPY: -1.29% to 113.59
- Data out Tuesday:
- Q4 Employment Cost Index (08:30 ET)
- November S&P Case-Shiller Home Price Index (09:00 ET)
- January Chicago PMI (09:45 ET)
- January Consumer Confidence (10:00 ET)
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Preview: Tuesday, 31 January 2017
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 31 | 08:30 | Employment Cost Index | Q4 | 0.6% | 0.6% | 0.6% | -- | |
| Jan 31 | 09:00 | S&P Case Shiller Home Price Index | Nov | 5.1% | 5.0% | 5.1% | ||
| Jan 31 | 09:45 | Chicago PMI | Jan | 55.5 | 55.0 | 53.9 | 54.6 | |
| Jan 31 | 10:00 | Consumer Confidence | Jan | 114.0 | 112.5 | 113.3 | 113.7 |
Commentary
A bearish day, down and go no where. market reacted to trump's suspension of the U.S. refugee program. The sentiment would probably carry into tomorrow.
Direction for Tuesday, 31 January 2017: Down
Daily Accuracy: 10/17 59%
Direction for Tuesday, 31 January 2017: Down
Daily Accuracy: 10/17 59%
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