Market Summary
from Briefing.comIndustry Watch
Strong: Health Care, Technology, Consumer Staples, Utilities, Real Estate
Weak: Financials, Materials, Industrials, Energy
- Retailers under pressure after cautious guidance from Kohl's (KSS) and Macy's (M)
- Precious metals on the rise
- Dollar Index extends yesterday's pullback
[BRIEFING.COM] The stock market finished Thursday just below its flat line as the S&P 500 shed 0.1%. The Nasdaq outperformed, adding a modest 0.2%.
Stocks were able to overlook the red flags in other markets during the opening hour, but selling interest picked up soon thereafter. The S&P 500 saw a ten-point dip in the late morning amid defensive action in other asset classes. However, the slip, which came ahead of tomorrow's release of the Employment Situation Report for December (Briefing.com consensus 175K), was largely erased by the close.
Cyclical sectors performed slightly worse than their defensive counterparts, as five of the six finished in negative territory. Leading the retreat was the financial sector (-1.0%), which broke its three-session winning streak. Industrials (-0.4%), materials (-0.3%), and energy (-0.3%) also trailed the broader market.
Energy had a poor showing despite crude oil ending the day up 0.9% at $53.87/bbl. The advance occurred as the U.S. dollar retreated for the second consecutive day. The U.S. Dollar Index (101.52, -0.97) finished lower by 1.0%, thanks to strength in the euro (1.0593) and the Japanese yen (115.61). The two currencies increased 1.0% and 1.4% against the dollar, respectively.
The consumer discretionary space (-0.1%) settled in line with the broader market, bouncing back from heavy selling pressure in the morning. The sector started Thursday on the wrong foot after Macy's (M 30.86, -4.98) and Kohl's (KSS 42.01, -9.87) issued disappointing guidance due to weak holiday sales, pushing the SPDR S&P 500 Retail ETF (XRT 44.02, -1.15) lower by 2.6%. However, the sector's top-weighted stock, Amazon (AMZN 780.45, +23.27) had a solid showing, ending the day higher by 3.1%.
The top-weighted technology sector (+0.2%) was the only cyclical group to finish the day in positive territory. However, the win didn't come easy as weakness in chipmakers sent the PHLX Semiconductor Index lower by 0.9%. That soft spot was offset by gains in top components like Apple (AAPL 116.61, +0.59) and Facebook (FB 120.67, +1.98).
On the countercyclical side, health care (+0.5%) finished the day at the top of the leaderboard by capitalizing on biotechnology's positive performance; the iShares Nasdaq Biotechnology ETF (IBB 278.10, +0.87) added 0.3%. Real estate (+0.5%), consumer staples (+0.3%), and utilities (+0.1%) also finished in the green, drawing strength from a decline in yields.
U.S. Treasuries climbed into the late morning and returned to their highs just ahead of the close. The benchmark 10-yr yield fell seven basis points to 2.37%.
Economic data included ADP Employment Change, Initial Claims, and ISM Services:
Stocks were able to overlook the red flags in other markets during the opening hour, but selling interest picked up soon thereafter. The S&P 500 saw a ten-point dip in the late morning amid defensive action in other asset classes. However, the slip, which came ahead of tomorrow's release of the Employment Situation Report for December (Briefing.com consensus 175K), was largely erased by the close.
Cyclical sectors performed slightly worse than their defensive counterparts, as five of the six finished in negative territory. Leading the retreat was the financial sector (-1.0%), which broke its three-session winning streak. Industrials (-0.4%), materials (-0.3%), and energy (-0.3%) also trailed the broader market.
Energy had a poor showing despite crude oil ending the day up 0.9% at $53.87/bbl. The advance occurred as the U.S. dollar retreated for the second consecutive day. The U.S. Dollar Index (101.52, -0.97) finished lower by 1.0%, thanks to strength in the euro (1.0593) and the Japanese yen (115.61). The two currencies increased 1.0% and 1.4% against the dollar, respectively.
The consumer discretionary space (-0.1%) settled in line with the broader market, bouncing back from heavy selling pressure in the morning. The sector started Thursday on the wrong foot after Macy's (M 30.86, -4.98) and Kohl's (KSS 42.01, -9.87) issued disappointing guidance due to weak holiday sales, pushing the SPDR S&P 500 Retail ETF (XRT 44.02, -1.15) lower by 2.6%. However, the sector's top-weighted stock, Amazon (AMZN 780.45, +23.27) had a solid showing, ending the day higher by 3.1%.
The top-weighted technology sector (+0.2%) was the only cyclical group to finish the day in positive territory. However, the win didn't come easy as weakness in chipmakers sent the PHLX Semiconductor Index lower by 0.9%. That soft spot was offset by gains in top components like Apple (AAPL 116.61, +0.59) and Facebook (FB 120.67, +1.98).
On the countercyclical side, health care (+0.5%) finished the day at the top of the leaderboard by capitalizing on biotechnology's positive performance; the iShares Nasdaq Biotechnology ETF (IBB 278.10, +0.87) added 0.3%. Real estate (+0.5%), consumer staples (+0.3%), and utilities (+0.1%) also finished in the green, drawing strength from a decline in yields.
U.S. Treasuries climbed into the late morning and returned to their highs just ahead of the close. The benchmark 10-yr yield fell seven basis points to 2.37%.
Economic data included ADP Employment Change, Initial Claims, and ISM Services:
- The latest weekly initial jobless claims count totaled 235,000 while the Briefing.com consensus expected a reading of 265,000. Today's tally was below the revised prior week count of 263,000 (from 265,000). As for continuing claims, they rose to 2.112 million from the revised count of 2.096 million (from 2.102 million).
- The key takeaway from the report is that it points to tight labor market conditions as employers overall appear to be reluctant to cut staff.
- The ADP National Employment Report showed an increase of 153,000 in December (Briefing.com consensus 170,000) while the November reading was revised lower to 215,000 from 216,000. The ADP reading precedes Friday's more influential Employment Situation Report for December, which the Briefing.com consensus expects will show the addition of 175,000 nonfarm payrolls. The Employment Situation Report for November indicated that nonfarm payrolls increased by 178,000.
- The ISM Services Index for December held at 57.2 while the Briefing.com consensus expected a downtick to 56.6.
- The key takeaway from the report is that respondents' comments were mostly positive about business conditions and the overall economy, reinforcing the market's belief that the U.S. economy, which is driven predominately by the non-manufacturing sector, was exhibiting some encouraging growth characteristics as 2016 came to an end.
- For further detail on today's economic releases, be sure to visit Briefing.com's Economic Calendar
- Nasdaq Composite +2.0% YTD
- S&P 500 +1.4% YTD
- Russell 2000 +1.1% YTD
- Dow Jones Industrial Average +0.7% 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 05 | 07:30 | Challenger Job Cuts | Dec | 42.4% | NA | NA | -13.0% | -- |
| Jan 05 | 08:15 | ADP Employment Change | Dec | 153K | 180K | 170K | 215K | 216K |
| Jan 05 | 08:30 | Initial Claims | 12/31 | 235K | 260K | 265K | 263K | 265K |
| Jan 05 | 08:30 | Continuing Claims | 12/24 | 2112K | NA | NA | 2096K | 2102K |
| Jan 05 | 10:00 | ISM Services | Dec | 57.2 | 57.5 | 56.6 | 57.2 | -- |
| Jan 05 | 10:30 | Natural Gas Inventories | 12/31 | -49 bcf | NA | NA | -237 bcf | |
| Jan 05 | 11:00 | Crude Inventories | 12/30 | -7.100M | NA | NA | 0.600M |
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Technical Update
DOW JONES INDUSTRIAL AVERAGE19899.29 -42.87 (-0.21%)
Volume: 269.92 Mil above average of 184.78 Mil
Range: 19811.12 - 19948.6
S&P 500 INDEX
2269 -1.75 (-0.08%)
Volume: 2187.19 Mil above average of 1237.39 Mil
Range: 2260.45 - 2271.5
DOW JONES TRANSPORTATION AVERAGE
9051.76 -63.96 (-0.70%)
Volume: 58.49 Mil above average of 32.49 Mil
Range: 9016.01 - 9145.72
NASDAQ COMPOSITE
5487.939941 +10.94 (+0.20%)
Volume: 1792.61 Mil below average of 1896.39 Mil
Range: 5464.359863 - 5495.850098
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Market Internal
NYSE :Higher than average volume @ 914.5M vs 907.9M
Decliners outpaced Advancers(adv/dec): 1296M/1640M
New highs outpaced low(high/low): 114/7
NASDAQ :
Lower than average volume @ 1779.2M vs 1836.5M
Decliners outpaced Advancers(adv/dec): 1177M/1715M
New highs outpaced low(high/low): 118/17
Decliners outpaced Advancers by 1.36 to 1 on lower volumes 2693.7 ( -1.85%) than avg 2744 (+0.36%)
VOLATILITY S&P500 (VIX) :
11.67 -0.18 (-1.52%)
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Bonds
from Briefing.comBonds
Market Moving Factors- December Challenger Job Cuts: U.S. employers planned to cut 33.6K jobs in December, up from 26.9K in November. December's number was up 42.4% y/y
- December ADP Employment Change: Actual 153K, Briefing.com consensus 170K, Prior 216K
- Initial Jobless Claims for the week ending 12/31: Actual 235K, Briefing.com consensus 265K, Prior 265K
- Continuing Jobless Claims for the week ending 12/24: Actual 2112K, Prior 2102K
- ISM Non-Manufacturing Index: Actual 57.2, Briefing.com consensus 56.6, Prior 57.2
- Natural Gas Inventories for the week ending 12/31 (10:30 ET): Actual -49 bcf, Expected -82 bcf, Prior -237 bcf
- Crude Inventories for the week ending 12/17: Actual -7.1M, Expected -2.15M, Prior 0.64M
- DXY trades down 1.33% to 101.33 after touching 103.82 on Tuesday
Treasuries Jump as ISM Services Beats Expectations and RMB Soars
- U.S. Treasuries rallied sharply today and the 10-year note saw its largest one-day gain in six months as a strong showing from December's ISM Services report failed to push yields higher. The U.S. Dollar Index fell 1.14% to 101.53 and the S&P 500 lost 0.19% to 2,266.5. The ADP Employment Change was weaker than expected (153K vs. Briefing.com consensus 170K) so Friday's release of the December Employment Situation Report may be a little disappointing. Initial jobless claims fell to a fresh four-decade low but seasonal hiring/firing could be distorting the data. China's offshore renminbi rate saw its biggest two-day jump on record as authorities took measures to reduce the pressure for depreciation. Wednesday's statements from both Republicans and Democrats regarding possible repeal and/or replacement of the Affordable Care Act may be dampening hope that the first order of business after Trump's inauguration would be fiscal stimulus. The potential size of a stimulus package (either infrastructure or tax cuts) has been and remains uncertain
- Yield Check:
- 2-yr: -6 bps to 1.16%
- 5-yr: -6 bps to 1.87%
- 10-yr: -7 bps to 2.37%
- 30-yr: -8 bps to 2.96%
- News:
- ADP estimated that the U.S. economy added a net 153K nonfarm jobs in December. The Briefing.com consensus was 170K and November's growth was 216K
- Goods-producing: -16,000
- Service-providing: 169,000
- Initial jobless claims came out at 235K for the last week of 2017, beating the Briefing.com consensus of 265K. The prior week's reading was also 265K. Holiday season hiring can play games with the initial claims statistics and so we would tend to take this decline with a grain of salt
- Continuing claims rose to 2112K for the week ending December 24 from the prior reading of 2102K
- The ISM Services Index remained at 57.2 in December, beating the Briefing.com consensus for a drop to 56.6
- According to the ISM, the past relationship between this index and the overall economy indicates that the 57.2 reading for December corresponds to a 3.3% increase in real GDP on an annualized basis
- New Orders: 61.6 (57.0 prior)
- Business Activity: 61.4 (61.7 prior)
- Employment: 53.8 (58.2 prior)
- Prices Paid: 57.0 (56.3 prior)
- ADP estimated that the U.S. economy added a net 153K nonfarm jobs in December. The Briefing.com consensus was 170K and November's growth was 216K
- Commodities:
- WTI crude: +0.94% to $53.76/bbl.
- Gold: +1.38% to $1,181.5/troy oz.
- Copper: -0.80% to $2.536/lb.
- Currencies:
- EUR/USD: +0.62% to 1.0592
- USD/JPY: -0.89% to 115.62
- Data out Friday:
- December Employment Situation Report (08:30 ET)
- November Trade Balance (08:30 ET)
- November Factory Orders (10:00 ET)
- Fed Speakers:
- Richmond Fed President Lacker (non-FOMC voter) (13:00 ET)
- Chicago Fed President Evans (FOMC voter) (13:15 ET)
- Dallas Fed President Kaplan (FOMC voter) (15:30 ET)
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Preview: Friday, 6 January 2017
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 06 | 08:30 | Nonfarm Payrolls | Dec | 185K | 175K | 178K | ||
| Jan 06 | 08:30 | Nonfarm Private Payrolls | Dec | 180K | 170K | 156K | ||
| Jan 06 | 08:30 | Unemployment Rate | Dec | 4.7% | 4.7% | 4.6% | ||
| Jan 06 | 08:30 | Hourly Earnings | Dec | 0.3% | 0.3% | -0.1% | ||
| Jan 06 | 08:30 | Average Workweek | Dec | 34.4 | 34.4 | 34.4 | ||
| Jan 06 | 08:30 | Trade Balance | Nov | -$44.0B | -$42.2B | -$42.6B | ||
| Jan 06 | 10:00 | Factory Orders | Nov | -2.3% | -2.1% | 2.7% |
Commentary
Mixed Market internals with decliners barely outpacing advancers. Volumes seem to
Direction for Friday, 6 January 2017: Down
Daily Accuracy: 1/2 50%
Direction for Friday, 6 January 2017: Down
Daily Accuracy: 1/2 50%
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