Market Summary
from Briefing.comIndustry Watch
Strong: Health Care, Energy, Telecom Services
Weak: Consumer Staples, Utilities, Real Estate, Materials
- U.S. Dollar Index climbs to begin 2017
- Crude oil surrenders overnight gain
[BRIEFING.COM] The stock market began the new year on a higher note, but the bulk of today's advance took place during the initial minutes of the session. The S&P 500 added 0.9% after being up 1.1% during the opening hour.
The long weekend was fairly quiet from the news standpoint, but investors did receive upbeat economic data from China (Caixin Manufacturing PMI 51.9; previous 50.9) and the eurozone (December Manufacturing PMI 54.9; previous 54.9). The data was used to justify the sunny disposition in the pre-market, but roughly half of the early gains faded shortly after the open. The morning pullback coincided with a spike in the yen after the dollar/yen pair failed to climb above its December high (118.67). The yen picked up about 100 pips against the dollar in just over an hour, and the risk-off move in the currency market helped cool the buying jets in the stock market. However, the last 30 minutes of the session saw the market rally back towards its early high.
Ten out of eleven sectors ended the day in positive territory with health care (+1.4%) and telecom services (+1.9%) climbing into the lead as the broader market retreated during the late morning. Telecom services rallied behind Verizon (VZ 54.58, +1.20) after the stock was upgraded to ‘Buy' from ‘Neutral' at Citigroup while the health care sector received support from biotech names. The iShares Nasdaq Biotechnology ETF (IBB 270.24, +4.86) spiked 1.8%. Although biotechnology lifted the health care sector, it could not keep the Nasdaq Composite (+0.9%) ahead of the broader market due to relative weakness in chipmaker names. The PHLX Semiconductor Index (+0.1%) spent the bulk of the day in negative territory, but late afternoon buying prevented a lower finish while the broader technology sector (+0.9%) settled just ahead of the broader market.
Like technology, financials (+1.0%) settled in the neighborhood of the S&P 500, but the sector flirted with a 2.0% gain at the start. Similarly, energy (+1.2%) backed off its opening high, but still ended comfortably in the green even though crude oil surrendered a big gain to end lower by 2.6% at $52.33/bbl after climbing above $55.00/bbl in overnight action.
Automakers were in the news today, starting with General Motors (GM 35.15, +0.31). Shares of GM ended higher by 0.9% after being down 1.0% in pre-market after President-elect Donald Trump said, in a tweet, that GM should pay a "big border tax" on Chevrolet Cruze vehicles produced in Mexico. General Motors responded by saying that most Cruze vehicles for U.S. distribution are produced in Ohio. Separately, Ford (F 12.59, +0.46) climbed 3.8% after announcing it will expand its plant in Michigan instead of developing a new location in San Luis Potosi, Mexico.
On the downside, the utilities sector (-0.3%) was the lone decliner, spending the day in negative territory even as intraday demand for Treasuries pressured yields off their overnight highs. The 10-yr note ended flat with its yield at 2.45%.
Today's participation was above average as more than one billion shares changed hands at the NYSE floor.
Economic data included Construction Spending and ISM Index:
The long weekend was fairly quiet from the news standpoint, but investors did receive upbeat economic data from China (Caixin Manufacturing PMI 51.9; previous 50.9) and the eurozone (December Manufacturing PMI 54.9; previous 54.9). The data was used to justify the sunny disposition in the pre-market, but roughly half of the early gains faded shortly after the open. The morning pullback coincided with a spike in the yen after the dollar/yen pair failed to climb above its December high (118.67). The yen picked up about 100 pips against the dollar in just over an hour, and the risk-off move in the currency market helped cool the buying jets in the stock market. However, the last 30 minutes of the session saw the market rally back towards its early high.
Ten out of eleven sectors ended the day in positive territory with health care (+1.4%) and telecom services (+1.9%) climbing into the lead as the broader market retreated during the late morning. Telecom services rallied behind Verizon (VZ 54.58, +1.20) after the stock was upgraded to ‘Buy' from ‘Neutral' at Citigroup while the health care sector received support from biotech names. The iShares Nasdaq Biotechnology ETF (IBB 270.24, +4.86) spiked 1.8%. Although biotechnology lifted the health care sector, it could not keep the Nasdaq Composite (+0.9%) ahead of the broader market due to relative weakness in chipmaker names. The PHLX Semiconductor Index (+0.1%) spent the bulk of the day in negative territory, but late afternoon buying prevented a lower finish while the broader technology sector (+0.9%) settled just ahead of the broader market.
Like technology, financials (+1.0%) settled in the neighborhood of the S&P 500, but the sector flirted with a 2.0% gain at the start. Similarly, energy (+1.2%) backed off its opening high, but still ended comfortably in the green even though crude oil surrendered a big gain to end lower by 2.6% at $52.33/bbl after climbing above $55.00/bbl in overnight action.
Automakers were in the news today, starting with General Motors (GM 35.15, +0.31). Shares of GM ended higher by 0.9% after being down 1.0% in pre-market after President-elect Donald Trump said, in a tweet, that GM should pay a "big border tax" on Chevrolet Cruze vehicles produced in Mexico. General Motors responded by saying that most Cruze vehicles for U.S. distribution are produced in Ohio. Separately, Ford (F 12.59, +0.46) climbed 3.8% after announcing it will expand its plant in Michigan instead of developing a new location in San Luis Potosi, Mexico.
On the downside, the utilities sector (-0.3%) was the lone decliner, spending the day in negative territory even as intraday demand for Treasuries pressured yields off their overnight highs. The 10-yr note ended flat with its yield at 2.45%.
Today's participation was above average as more than one billion shares changed hands at the NYSE floor.
Economic data included Construction Spending and ISM Index:
- Total construction spending increased 0.9% in November (Briefing.com consensus +0.5%) on top of an upwardly revised 0.6% increase (from +0.5%) in October. On a year-over-year basis, total construction spending increased at a seasonally adjusted annual rate of 4.1%.
- The key takeaway from the report is that construction spending is increasing and will serve as a positive input for Q4 GDP forecasts.
- The ISM Manufacturing Index closed 2016 on an upbeat note, hitting 54.7 (Briefing.com consensus 53.6), which was up from 53.2 in November and the highest reading all year. December marked the fourth straight month that the index was above 50.0, which is the dividing line between expansion and contraction.
- The key takeaway from the report is that it helps validate the market's budding growth assumptions for 2017 considering the strength in December was forged on the back of a big uptick in the component indexes for new orders and prices.
- For further detail on today's economic releases, be sure to visit Briefing.com's Economic Calendar
- S&P 500 +0.9% YTD
- Nasdaq Composite +0.9% YTD
- Dow Jones Industrial Average +0.6% YTD
- Russell 2000 +0.5% 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 03 | 10:00 | Construction Spending | Nov | 0.9% | 0.5% | 0.5% | 0.6% | 0.5% |
| Jan 03 | 10:00 | ISM Index | Dec | 54.7 | 52.8 | 53.6 | 53.2 | -- |
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Technical Update
DOW JONES INDUSTRIAL AVERAGE19881.76 +119.16 (+0.60%)
Volume: 339.18 Mil above average of 176.53 Mil
Range: 19775.93 - 19938.53
S&P500 INDEX
2257.83 +19.00 (+0.85%)
Volume: 2318.95 Mil above average of 1173.59 Mil
Range: 2245.13 - 2263.88
DOW JONES TRANSPORTATION AVERAGE
9023.86 -20.04 (-0.22%)
Volume: 53.52 Mil above average of 31.08 Mil
Range: 8980.34 - 9170.17
NASDAQ COMPOSITE
5429.080078 +45.96 (+0.85%)
Volume: 1886.20 Mil below average of 1886.50 Mil
Range: 5397.990234 - 5452.569824
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Market Internal
NYSE :Higher than average volume @ 972.2M vs 900.0M
Advancers outpaced Decliners(adv/dec): 2300M/705M
New highs outpaced low(high/low): 132/7
NASDAQ :
Higher than average volume @ 1873.3M vs 1821.4M
Advancers outpaced Decliners(adv/dec): 1847M/1030M
New highs outpaced low(high/low): 128/26
Advancers outpaced Decliners by 2.39 to 1 on higher volumes 2845.5 (+4.56%) than avg 2721 (+0.15%)
VOLATILITY S&P500 (VIX) :
12.85 -1.19 (-8.48%)
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Bonds
from Briefing.comBonds
Market Moving Factors
- November Construction Spending: Actual 0.9%, Briefing.com consensus 0.5%, Prior 0.6% (revised from 0.5%)
- December ISM Manufacturing: Actual 54.7, Briefing.com consensus 53.6, Prior 53.2
- U.S. Treasuries ended lower on average in a curve-flattening trade but only after rebounding sharply from their morning lows. The session began with Treasuries mired in losses and they clawed back some ground only to trade back to lows after the release of a very positive ISM Manufacturing report for December. Oil and share prices reversed lower however and that helped to drive Treasuries higher for the rest of the day. The ISM Manufacturing Index rose to its highest level since January 2015 last month and U.S. construction spending grew faster than expected in November. Inflation data from France and Germany showed consumer prices rebounding there. The S&P 500 now trades up 0.48% to 2,249.5 and the U.S. Dollar Index is up by 1.00% to 103.23
- Yield Check:
- 2-yr: +2 bps to 1.21%
- 5-yr: +1 bp to 1.94%
- 10-yr: unch at 2.45%
- 30-yr: -2 bps to 3.05%
- News:
- The ISM Manufacturing Index hit 54.7 for December(Briefing.com consensus 53.6), up from 53.2 for November and the highest reading since January 2015. December marked the fourth straight month that the index was above 50.0, the dividing line between expansion and contraction
- According to the ISM, the December reading, if annualized, corresponds to a 3.6% increase in real GDP
- The New Orders Index jumped from 53.0 to 60.2
- Prices paid leapt from 54.5 to 65.5
- U.S. construction spending rose 0.9% m/m in November, beating the Briefing.com consensus of 0.5%. October's gain was revised up to 0.6% from 0.5%
- On a year-over-year basis, total construction spending increased at a seasonally adjusted annual rate of 4.1%
- The key takeaway from the report was that construction spending is increasing and will serve as a positive input for Q4 GDP forecasts
- The ISM Manufacturing Index hit 54.7 for December(Briefing.com consensus 53.6), up from 53.2 for November and the highest reading since January 2015. December marked the fourth straight month that the index was above 50.0, the dividing line between expansion and contraction
- Commodities:
- WTI crude: -2.79% to $52.22/bbl.
- Gold: +0.60% to $1,158.6/troy oz.
- Copper: -0.66% to 2.489/lb.
- Currencies:
- EUR/USD: -0.57% to 1.0408
- USD/JPY: +0.27% to 117.73
- Data out Wednesday:
- MBA Mortgage Index for the week ending 12/31 (07:00 ET)
- December FOMC Minutes (14:00 ET)
- December Auto and Truck Sales (14:00 ET)
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Preview: Wednesday, 4 January 2017
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 04 | 07:00 | MBA Mortgage Applications Index | 12/31 | NA | NA | 2.5% | ||
| Jan 04 | 14:00 | Auto Sales | Dec | NA | NA | 5.21M | ||
| Jan 04 | 14:00 | Truck Sales | Dec | NA | NA | 8.92M | ||
| Jan 04 | 14:00 | FOMC Minutes | Dec | NA | NA | NA |
Commentary
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Direction for 4 January 2017: UP
Daily Accuracy:
Direction for 4 January 2017: UP
Daily Accuracy:
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