Market Summary
from Briefing.comIndustry Watch
Strong: Energy, Industrials, Materials, Technology, Utilities
Weak: Health Care, Telecom Services, Real Estate
Market Moving Factors
- Crude oil bounces up after two days of losses
- Airlines outperform after upbeat December traffic data from American Airlines (AAL) and United Continental (UAL)
- Health care falls after President-elect Trump shares his desire to bring back pharmaceutical operations to the U.S.
[BRIEFING.COM] The major averages closed Wednesday's session in the green with the S&P 500 adding 0.3%. The Dow outperformed the benchmark index with a 0.5% gain.
The stock market held a modest gain going into President-elect Trump's first news conference since winning the presidential election. However, the market gave back all of its gains and more after Mr. Trump expressed a desire to bring back pharmaceutical operations to the United States and voiced support for competitive drug price bidding. The biotechnology industry plunged immediately, with the iShares Nasdaq Biotechnology ETF (IBB 278.04, -8.31) closing lower by 3.0%. Most sectors returned to or above their pre-conference levels in the afternoon, but health care (-1.0%) could not overcome biotechnology's sizable blow. Investors hoping to hear about President-elect's infrastructure spending plans came away empty handed.
Telecom services (-0.5%) and real estate (-0.5%) also finished in negative territory, while the remaining eight spaces closed in the green. Energy (+1.2%) topped the day's leaderboard, piggybacking on crude oil's climb. The commodity finished higher by 2.7% at 52.20/bbl amid reports that Saudi Arabia, the world's top exporter, plans to cut supply to Asia. Crude extended its gain despite a big inventory build that was revealed by the latest stockpile data.
The top-weighted technology space (+0.7%) also finished near the top of the standings after an afternoon push from some of its top components. For instance, Apple (AAPL 119.75, +0.64), Facebook (FB 126.09, +1.74), and IBM (IBM 167.75, +2.23) advanced between 0.6% and 2.2%. Chipmakers also provided a boost as the PHLX semiconductor Index closed up 0.4%.
Financials (+0.5%) erased their week-to-date loss that was carried into Wednesday's session. The sector rallied to a session high during late afternoon action.
Cyclical sectors have a commanding lead for the week, as five of the six are in positive territory. Materials and technology set the pace with week-to-date gains of 0.9% and 0.7%, respectively. Conversely, all five defensive sectors are posting week-to-date losses with real estate (-2.4%) leading the retreat.
U.S. Treasuries finished the trading day modestly higher after the Treasury's $20 billion 10-year reopening auction drew a high yield of 2.342% on a bid-to-cover of 2.58x. The 10-yr yield closed one basis point lower at 2.37%.
Wednesday's lone economic report was the MBA Mortgage Index, which increased 5.8%.
Tomorrow's economic data will include December Import/Export Prices and Initial Claims (Briefing.com consensus 235k) at 8:30 am ET, followed by the Treasury Budget at 2:00 pm ET.
The stock market held a modest gain going into President-elect Trump's first news conference since winning the presidential election. However, the market gave back all of its gains and more after Mr. Trump expressed a desire to bring back pharmaceutical operations to the United States and voiced support for competitive drug price bidding. The biotechnology industry plunged immediately, with the iShares Nasdaq Biotechnology ETF (IBB 278.04, -8.31) closing lower by 3.0%. Most sectors returned to or above their pre-conference levels in the afternoon, but health care (-1.0%) could not overcome biotechnology's sizable blow. Investors hoping to hear about President-elect's infrastructure spending plans came away empty handed.
Telecom services (-0.5%) and real estate (-0.5%) also finished in negative territory, while the remaining eight spaces closed in the green. Energy (+1.2%) topped the day's leaderboard, piggybacking on crude oil's climb. The commodity finished higher by 2.7% at 52.20/bbl amid reports that Saudi Arabia, the world's top exporter, plans to cut supply to Asia. Crude extended its gain despite a big inventory build that was revealed by the latest stockpile data.
The top-weighted technology space (+0.7%) also finished near the top of the standings after an afternoon push from some of its top components. For instance, Apple (AAPL 119.75, +0.64), Facebook (FB 126.09, +1.74), and IBM (IBM 167.75, +2.23) advanced between 0.6% and 2.2%. Chipmakers also provided a boost as the PHLX semiconductor Index closed up 0.4%.
Financials (+0.5%) erased their week-to-date loss that was carried into Wednesday's session. The sector rallied to a session high during late afternoon action.
Cyclical sectors have a commanding lead for the week, as five of the six are in positive territory. Materials and technology set the pace with week-to-date gains of 0.9% and 0.7%, respectively. Conversely, all five defensive sectors are posting week-to-date losses with real estate (-2.4%) leading the retreat.
U.S. Treasuries finished the trading day modestly higher after the Treasury's $20 billion 10-year reopening auction drew a high yield of 2.342% on a bid-to-cover of 2.58x. The 10-yr yield closed one basis point lower at 2.37%.
Wednesday's lone economic report was the MBA Mortgage Index, which increased 5.8%.
Tomorrow's economic data will include December Import/Export Prices and Initial Claims (Briefing.com consensus 235k) at 8:30 am ET, followed by the Treasury Budget at 2:00 pm ET.
- Russell 2000 +1.2% YTD
- Dow Jones Industrial Average +1.0% YTD
- S&P 500 +1.6% YTD
- Nasdaq Composite +3.4% 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 11 | 07:00 | MBA Mortgage Index | 01/06 | 5.8% | NA | NA | 0.1% | |
| Jan 11 | 10:30 | Crude Inventories | 01/06 | +4.100M | NA | NA | -7.100M |
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Technical Update
DOW JONES INDUSTRIAL AVERAGE19954.28 +98.75 (+0.50%)
Volume: 336.15 Mil above average of 200.64 Mil
Range: 19833.16 - 19973.42
S&P 500 INDEX
2275.32 +6.42 (+0.28%)
Volume: 2118.29 Mil above average of 1356.71 Mil
Range: 2260.83 - 2275.32
DOW JONES TRANSPORTATION AVERAGE
9186.32 +91.25 (+1.00%)
Volume: 60.88 Mil above average of 35.44 Mil
Range: 9107.31 - 9195.28
NASDAQ COMPOSITE
5563.649902 +11.83 (+0.21%)
Volume: 1954.72 Mil above average of 1900.94 Mil
Range: 5524.029785 - 5564.080078
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Market Internal
NYSE :Lower than average volume @ 878.8M vs 911.3M
Advancers outpaced Decliners(adv/dec): 2026M/919M
New highs outpaced low(high/low): 113/11
NASDAQ :
Higher than average volume @ 1929.7M vs 1850.2M
Advancers outpaced Decliners(adv/dec): 1469M/1209M
New highs outpaced low(high/low): 50/8
Advancers outpaced Decliners by 1.64 to 1 on higher volumes 2808.5 (+1.70%) than avg 2761 (+0.23%)
VOLATILITY S&P500 (VIX) :
11.26 -0.23 (-2.00%)
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Bonds
from Briefing.comBonds
Market Moving Factors- Gold for February delivery trades to a 5-week high of $1,190.5/troy oz, now up 0.41% to $1,189.8
- November Wholesale Inventories: Actual 1.0%, Briefing.com consensus 0.9%, Prior -0.1% (revised from -0.4%)
- November JOLTS -- Job Openings: Actual 5.522M, Prior 5.451M
- Richmond Fed President Lacker (non-voter) to step down October 1
- $24 bln 3-year Treasury auction: High yield 1.472%, Bid-to-cover 2.97, Indirect bid 54.6%, Direct bid 6.6%
Treasuries Hold Steady as Dollar Drops Sharply
- U.S. Treasuries moved just slightly higher today after giving back solid midday gains in the last two hours of trade. The real action happened in foreign exchange markets where the U.S. Dollar Index reversed from an intraday high of 102.95 to lose 0.20% at 101.81. The sell-off came during President-Elect Trump's first press conference in six months in which he said automakers would face consequences for moving jobs away from the United States. Stocks also declined sharply during the press conference but have since rebounded sharply and the S&P 500 sits up 0.15% at 2,272.2. The very strong reception for the $20 bln 10-year Treasury reopening pushed yields lower and that helped weigh on the greenback too. Thursday's session features a raft of Fed speakers and on Friday, PPI and retail sales for December are due to be released
- Yield Check:
- 2-yr: -1 bp to 1.18%
- 5-yr: unch at 1.88%
- 10-yr: -1 bp to 2.37%
- 30-yr: -1 bp to 2.96%
- News:
- $20 bln 10-year Treasury reopening results (12-auction average metrics in parentheses):
- High yield: 2.342% (1.8-basis point stop-through)
- Bid-to-cover: 2.58 (2.52)
- Indirect bid: 70.5% (63.1%)
- Direct bid: 8.7% (9.3%)
- Crude oil inventories rose by 4.1 mln barrels for the week ending January 7 versus expectations for a build of 1.16 mln bbl.. The prior week saw a huge decline 7.051 mln bbl.
- President-Elect Trump gave his first press conference since July 2016. On the policy front, he said that his administration would negotiate prices for drugs with pharmaceutical companies. He also said that costs would be reduced in the F-35 (fighter jet) program
- $20 bln 10-year Treasury reopening results (12-auction average metrics in parentheses):
- Commodities:
- WTI crude: +2.68% to $52.18/bbl.
- Gold: +0.53% to $1,191.8/troy oz.
- Copper: -0.36% to $2.60/lb.
- Currencies:
- EUR/USD: +0.18% to 1.0573
- USD/JPY: -0.31% to 115.44
- Data out Thursday:
- December Import prices ex-oil and Export prices ex-ag. (08:30 ET)
- Initial Jobless Claims for the week ending 1/7 and Continuing Jobless Claims for the week ending 12/31 (08:30 ET)
- Natural Gas Inventories for the week ending 1/7 (10:30 ET)
- Fed Speakers:
- Philadelphia Fed President Harker (FOMC voter) (08:30 ET)
- Chicago Fed President Evans (FOMC voter) (08:45 ET)
- Atlanta Fed President Lockhart (non-FOMC voter) (12:30 ET)
- St. Louis Fed President Bullard (non-FOMC voter) (13:15 ET)
- Fed Chair Yellen (FOMC voter) (17:30 ET)
- Treasury Auction:
- $12 bln 30-year Treasury reopening (results at 13:00 ET)
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Preview: Thursday, 12 January 2017
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 12 | 08:30 | Export Prices ex-ag. | Dec | NA | NA | 0.2% | ||
| Jan 12 | 08:30 | Import Prices ex-oil | Dec | NA | NA | -0.1% | ||
| Jan 12 | 08:30 | Initial Claims | 01/07 | 245K | 255K | 235K | ||
| Jan 12 | 08:30 | Continuing Claims | 12/31 | NA | NA | 2112K | ||
| Jan 12 | 10:30 | Natural Gas Inventories | 01/07 | NA | NA | -49 bcf | ||
| Jan 12 | 14:00 | Treasury Budget | Dec | NA | NA | -$14.4B |
Commentary
The market reacted to Trump's address but managed to recover by the end of the day. There is some momentum in the bull market, market internals are mostly bullish.
Direction for Thursday, 12 January 2017: UP
Daily Accuracy: 4/6 66.66%
Direction for Thursday, 12 January 2017: UP
Daily Accuracy: 4/6 66.66%
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