Market Summary
from Briefing.comIndustry Watch
Strong: Industrials, Telecom Services
Weak: Financials, Energy, Materials, Health Care, Utilities, Real Estate
- A wait-and-see attitude in front of Inauguration Day.
- The latest Initial Claims, Housing Starts, and Philadelphia Fed Index reports all lend support to improved growth outlook.
[BRIEFING.COM] A wait-and-see attitude lingered throughout today's trading session, but the rubber will finally meet the road tomorrow when Donald Trump becomes the 45th President of the United States and gets a chance to deliver on promises that drove the stock market to a fresh record high. The S&P 500 and the Nasdaq closed lower by 0.4% and 0.3%, respectively.
The stock market enjoyed a huge post-election advance, rallying on the vision that Donald Trump promised his electorate; deregulation of the financial industry and increased infrastructure spending. But with over two months to price-in those hopes, investors haven't had much to do as of late but sit back and wait.
This notion has been most apparent in the financial sector (-0.6%), which has been weak despite a growing batch of better-than-expected earnings reports. But in the same breath, after the sector's huge 20.5% Q4 advance, earnings reports are more likely to invoke a "sell-the-news" response.
However, that's not to say the stock market hasn't had its opportunities to move, as the news flow has been steady. For instance, the European Central Bank announced its latest policy decision this morning. The market response was muted, however, as the ECB left rates and the stimulus program unchanged and ECB President Mario Draghi struck a dovish tone in his post-decision press conference. The euro slid in reaction to Mr. Draghi's remarks, but retraced that decline to end higher by 0.3% against the dollar at 1.0660.
Economic data also had its chance to move the market, but a better than expected Housing Starts report (1226K; Briefing.com consensus 1193K) could not prevent homebuilders from retreating. The iShares Dow Jones US Home Construction ETF (ITB 27.63, -0.32) lost 1.1%. Separately, initial claims and the Philadelphia Fed survey were met with a muted reaction.
Conversely, corporate news did have some market-moving impact, pushing the industrial sector (+0.6%) atop of the day's leaderboard. Railroads traded up after Union Pacific (UNP 106.24, +2.47) reported above-consensus earnings and Canadian Pacific (CP 150.31, +5.09) CEO Hunter Harrison left the company to pursue changes at CSX (CSX 45.51, +8.63). Shares of CSX spiked 23.4% after The Wall Street Journal reported Mr. Harrison will partner up with activist investor Paul Hilal.
At the opposite end of today's leaderboard were utilities (-0.9%) and real estate (-1.0%), suffering from an uptick in Treasury yields. Treasuries were in negative territory for the entire session, but the benchmark 10-yr yield retreated from its high by the close, ending higher by four basis points at 2.47%.
Energy (-0.7%) finished only slightly better, ignoring crude oil's modest gain. The commodity finished up 0.5% at $51.27/bbl despite the Energy Information Administration reporting that crude oil inventories had a build of 2.3 million barrels while the consensus called for a draw of 0.342 million barrels.
The top-weighted technology sector (-0.3%) also finished in the red, but ahead of the broader market. Consumer discretionary finished in a similar spot (-0.3%) despite an uptick from its largest component, Amazon (AMZN 809.04, +1.56). The sector was pulled down by retailers who sent the SPDR S&P 500 Retail ETF (XRT 43.52, -0.80) lower by 1.8% on continued weakness following disappointing holiday sales.
Today's economic data included Initial Claims, Housing Starts, and Philadelphia Fed Survey:
The stock market enjoyed a huge post-election advance, rallying on the vision that Donald Trump promised his electorate; deregulation of the financial industry and increased infrastructure spending. But with over two months to price-in those hopes, investors haven't had much to do as of late but sit back and wait.
This notion has been most apparent in the financial sector (-0.6%), which has been weak despite a growing batch of better-than-expected earnings reports. But in the same breath, after the sector's huge 20.5% Q4 advance, earnings reports are more likely to invoke a "sell-the-news" response.
However, that's not to say the stock market hasn't had its opportunities to move, as the news flow has been steady. For instance, the European Central Bank announced its latest policy decision this morning. The market response was muted, however, as the ECB left rates and the stimulus program unchanged and ECB President Mario Draghi struck a dovish tone in his post-decision press conference. The euro slid in reaction to Mr. Draghi's remarks, but retraced that decline to end higher by 0.3% against the dollar at 1.0660.
Economic data also had its chance to move the market, but a better than expected Housing Starts report (1226K; Briefing.com consensus 1193K) could not prevent homebuilders from retreating. The iShares Dow Jones US Home Construction ETF (ITB 27.63, -0.32) lost 1.1%. Separately, initial claims and the Philadelphia Fed survey were met with a muted reaction.
Conversely, corporate news did have some market-moving impact, pushing the industrial sector (+0.6%) atop of the day's leaderboard. Railroads traded up after Union Pacific (UNP 106.24, +2.47) reported above-consensus earnings and Canadian Pacific (CP 150.31, +5.09) CEO Hunter Harrison left the company to pursue changes at CSX (CSX 45.51, +8.63). Shares of CSX spiked 23.4% after The Wall Street Journal reported Mr. Harrison will partner up with activist investor Paul Hilal.
At the opposite end of today's leaderboard were utilities (-0.9%) and real estate (-1.0%), suffering from an uptick in Treasury yields. Treasuries were in negative territory for the entire session, but the benchmark 10-yr yield retreated from its high by the close, ending higher by four basis points at 2.47%.
Energy (-0.7%) finished only slightly better, ignoring crude oil's modest gain. The commodity finished up 0.5% at $51.27/bbl despite the Energy Information Administration reporting that crude oil inventories had a build of 2.3 million barrels while the consensus called for a draw of 0.342 million barrels.
The top-weighted technology sector (-0.3%) also finished in the red, but ahead of the broader market. Consumer discretionary finished in a similar spot (-0.3%) despite an uptick from its largest component, Amazon (AMZN 809.04, +1.56). The sector was pulled down by retailers who sent the SPDR S&P 500 Retail ETF (XRT 43.52, -0.80) lower by 1.8% on continued weakness following disappointing holiday sales.
Today's economic data included Initial Claims, Housing Starts, and Philadelphia Fed Survey:
- The latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 252,000. Today's tally was below the revised prior week count of 249,000 (from 247,000). As for continuing claims, they declined to 2.046 million from the revised count of 2.093 million (from 2.087 million).
- The key takeaway from the report is that it will drive heightened expectations for nonfarm payroll growth in January as this claims report covers the period in which the household and establishment survey for the Employment Situation report are conducted.
- Housing starts increased to a seasonally adjusted annualized rate of 1.226 million units in December, up from a revised 1.102 million units in November (from 1.09 million). The Briefing.com consensus expected starts to increase to 1.193 million units. Building permits decreased to a seasonally adjusted 1.210 million in December from an upwardly revised 1.212 million (from 1.201 million) for November. The Briefing.com consensus expected a reading of 1.217 million.
- The key takeaway from the report is that residential construction will be computed as a positive input in Q4 GDP forecasts as the fourth quarter average for privately-owned housing units under construction was 1.8% above the third quarter average.
- The Philadelphia Fed Survey for January rose to 23.6 from a revised 19.7 (from 21.5) while economists polled by Briefing.com had expected a reading of 15.3.
- The key takeaway from the report is that it's a first quarter number and it suggests manufacturing activity in the Philadelphia Fed region expanded at an encouraging pace to begin the year.
- Russell 2000 -0.8% YTD
- Dow Jones Industrial Average -0.2% YTD
- S&P 500 +1.1% YTD
- Nasdaq Composite +3.0% YTD
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Economic Data
from Briefing.com| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 19 | 08:30 | Initial Claims | 01/14 | 234K | 246K | 252K | 249K | 247K |
| Jan 19 | 08:30 | Continuing Claims | 01/07 | 2046K | NA | NA | 2093K | 2087K |
| Jan 19 | 08:30 | Housing Starts | Dec | 1226K | 1200K | 1193K | 1102K | 1090K |
| Jan 19 | 08:30 | Building Permits | Dec | 1210K | 1230K | 1217K | 1212K | 1201K |
| Jan 19 | 08:30 | Philadelphia Fed | Jan | 23.6 | 16.0 | 15.3 | 19.7 | 21.5 |
| Jan 19 | 10:30 | Natural Gas Inventories | 01/14 | -243 bcf | NA | NA | -151 bcf | |
| Jan 19 | 11:00 | Crude Inventories | 01/13 | +2.300M | NA | NA | +4.100M |
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Technical Update
DOW JONES INDUSTRIAL AVERAGE19732.4 -72.32 (-0.37%)
Volume: 301.75 Mil above average of 221.48 Mil
Range: 19677.94 - 19824.14
S&P 500 INDEX
2263.69 -8.20 (-0.36%)
Volume: 2041.28 Mil above average of 1492.43 Mil
Range: 2258.41 - 2274.33
DOW JONES TRANSPORTATION AVERAGE
9163.96 +23.09 (+0.25%)
Volume: 150.92 Mil above average of 39.97 Mil
Range: 9122.04 - 9265.19
NASDAQ COMPOSITE
5540.080078 -15.57 (-0.28%)
Volume: 1805.71 Mil below average of 1877.70 Mil
Range: 5528.370117 - 5571.529785
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Market Internal
NYSE :Lower than average volume @ 755.2M vs 894.7M
Decliners outpaced Advancers(adv/dec): 737M/2202M
New highs outpaced low(high/low): 71/21
NASDAQ :
Lower than average volume @ 1797.9M vs 1842.7M
Decliners outpaced Advancers(adv/dec): 808M/2057M
New highs outpaced low(high/low): 92/38
Decliners outpaced Advancers by 2.76 to 1 on lower volumes 2553.1 ( -6.73%) than avg 2737 (-0.37%)
VOLATILITY S&P500 (VIX) :
12.78 +0.30 (+2.40%)
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Bonds
from Briefing.comMarket Moving Factors
- ECB Rate Decision: Rates unchanged, as expected; Marginal Lending facility 0.25%, Main refinancing operations 0.00%, Deposit facility -0.40%
- The Governing Council continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases
- Initial Jobless Claims for the week ending 1/14: Actual 234K, Briefing.com consensus 252K, Prior 247K
- Continuing Jobless Claims for the week ending 1/7: Actual 2046K, Prior 2087K
- December Housing Starts: Actual 1226K, Briefing.com consensus 1193K, Prior 1102K (revised from 1090K)
- Building Permits: Actual 1210K, Briefing.com consensus 1217K, Prior 1212K (revised from 1201K)
- January Philadelphia Fed: Actual 23.6K, Briefing.com consensus 15.3, Prior 21.5
- Senate Finance Committee confirmation hearings for Steven Mnuchin (ongoing)
- Natural Gas Inventories for the week ending 1/14: Actual -243 bcf, Expected -231 bcf, Prior -151 bcf
- Crude Inventories for the week ending 1/14: Actual +2.3 mln barrels, Expected -0.34 mln, Prior +4.1 mln
- $13 bln 10-year TIPS auction: High yield 0.436% (when-issued 0.465%), Bid-to-cover 2.45, Indirect bid: 77.1%, Direct bid 7.0%
- Fed Chair Yellen (FOMC voter) (20:00 ET)
Treasuries Recoup Some Losses in Afternoon Trading
- U.S. Treasuries declined for the second-straight session but recovered considerable ground late in the day as the S&P 500 widened its loss and the dollar gave up more ground. The ECB rate decision and accompanying statement was just what the market expected this morning and ECB President Draghi threw no curve balls at his press conference. In U.S. economic data, housing starts beat economists' estimates and saw an upward revision to the prior month's data. The Philly Fed Index of manufacturing activity in mid-Atlantic states registered a two-year high. Initial jobless claims fell to a 43-year low for the week ending January 14 and that week covered the survey period for the Department of Labor's monthly Employment Situation Report. The $13 bln 10-year TIPS auction was met with very strong demand, stopping through by almost three basis points. The S&P 500 now sits 0.35% lower at 2,263.9 and the U.S. Dollar Index is up 0.24% to 101.17
- Yield Check:
- 2-yr: +1 bp to 1.23%
- 5-yr: +2 bps to 1.96%
- 10-yr: +4 bps to 2.47%
- 30-yr: +3 bps to 3.04%
- News:
- The ECB's Governing Council kept monetary policy on hold today (deposit rate at -0.40%, monthly asset purchases at EUR80 bln but falling to EUR60 bln from April through year-end)
- In the accompanying statement, the GC said that it "...continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases"
- ECB President Draghi was careful not to sound at all complacent on the inflation front in his press conference
- Housing starts numbered 1226K last month, exceeding the Briefing.com consensus of 1193K. November's number was revised up to 1102K from 1090K
- Multi-unit starts rose 57.3%. Single-family starts were down 4.0% in December.
- Building permits totaled 1210K in December, falling short of the Briefing.com consensus for 1217K permits. November saw 1212K new building permits, revised up from 1201K
- U.S. initial jobless claims fell to 234K for the week ending January 14 from the prior reading of 247K. The Briefing.com consensus was 252K
- Continuing claims fell to 2046K from 2093K
- The key takeaway from the report is that claims report covers the period in which the household and establishment survey for the Employment Situation report are conducted, so expectations for January's nonfarm payroll growth should be revised higher
- The Philadelphia Fed's manufacturing activity survey showed that the mid-Atlantic factory sector is growing at its fastest pace in two years. The index rose to 23.6 for January from 19.7 in December, beating the Briefing.com consensus for a dip to 15.3
- The index for new orders increased to 26.0 from 13.9 while the prices paid index increased 4.4 points to 32.5
- China's holdings of U.S. Treasuries dropped by $66.4 bln in November 2016 to total $1.05 tln
- The $13 bln 10-yr TIPS auction stopped through by almost three basis points, indicating very strong demand
- High yield: 0.436%
- Bid-to-cover: 2.45
- Indirect bid: 77.1% (previous 72.5%)
- Direct bid: 7.0% (previous 9.3%)
- The ECB's Governing Council kept monetary policy on hold today (deposit rate at -0.40%, monthly asset purchases at EUR80 bln but falling to EUR60 bln from April through year-end)
- Commodities:
- WTI crude: +0.53% to $51.35/bbl.
- Gold: -0.60% to $1,204.8/troy oz.
- Copper: -0.25% to $2.61/lb.
- Currencies:
- EUR/USD: +0.21% to $1.0656
- USD/JPY: 114.86
- Fed Speakers for Friday:
- Philadelphia Fed President Harker (FOMC voter) (09:00 ET)
- San Francisco Fed President Williams (non-FOMC voter) (13:00 ET)
~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Preview: Friday, 20 January 2017
Economic Data
No DataCommentary
Tomorrow is Trump's inauguration day. It's hard to know how the market will react given his decrease popularity since being elected.
Direction for Friday, 20 January 2017: Abstain
Daily Accuracy: 6/10 60%
Direction for Friday, 20 January 2017: Abstain
Daily Accuracy: 6/10 60%
No comments:
Post a Comment