Market Summary
from Briefing.comIndustry Watch
Strong: Financials
Weak: Telecom Services, Utilities, Consumer Staples, Real Estate
- Dow Jones Industrial Average hits 20,000 for the first time in history.
- The Trump administration has started making gradual progress towards fulfilling some of its campaign promises, including two executive orders today aimed at border control.
- Positive earnings reports from blue-chip stocks, including Boeing (BA), Texas Instruments (TXN), Seagate Technology (STX), and Norfolk Southern (NSC).
- The financial sector, the fourth quarter's largest advancer, provides strong sector leadership.
[BRIEFING.COM] Investors methodically pushed the major averages to record highs on Wednesday, with the Dow climbing past the 20k milestone along the way. All indices finished the day solidly higher, collectively signaling that the post-election rally isn't dead just yet. The S&P 500 closed up 0.8%.
The benchmark index jumped out of the gate this morning, as a handful of blue-chip companies reported positive earnings results between yesterday's close and today's open. Seagate Technology (STX 42.67, +5.23) spiked 14.0% after topping earnings and revenue estimates in addition to issuing upbeat guidance. Norfolk Southern (NSC 120.53, +3.91) also finished higher, increasing 3.4% to an all-time high after beating earnings per share estimates.
As far as Dow components, Boeing (BA 167.36, +6.81) also had an upbeat showing while United Technologies (UTX 110.96, -0.65) finished lower as the company's in-line earnings report was met with a sell-the-news response following a large fourth quarter gain.
However, the stock market didn't stop there, moving slowly but deliberately into the afternoon amid positive signals from the political front. President Trump signed two executive orders on Wednesday, one to build a physical barrier along the U.S.-Mexico border and another to strip federal grant money from states and cities that shelter illegal immigrants. And while these reports weren't unexpected, as border control was a staple of Mr. Trump's presidential campaign, they do serve as a reminder of said campaign and the pro-growth hopes attached to it.
Strong sector leadership was also an important factor in today's session as the financials (+1.7%) moved into the top spot on today's leaderboard early, building on a positive showing on Tuesday. With two solid wins under its belt, the financial sector is back near its high from early December, overcoming the sell-the-news response that was invited by earnings from the sector's top components.
The financial sector was followed by industrials (+1.0%) and technology (+1.1%) with the latter benefiting from a 1.5% increase in the PHLX Semiconductor Index. Chipmakers received a nice bump from Texas Instruments (TXN 78.58, +1.50) as the stock jumped 2.0% in reaction to above-consensus earnings.
Energy (+0.6%) underperformed its cyclical peers, as crude oil finished 0.7% lower at $52.76/bbl. The energy component had a somewhat volatile session, reacting to a downtick in the U.S. Dollar Index (99.94, -0.34) and an Energy Information Administration report that showed a build of 2.8 million barrels of crude and a big build in gasoline inventories.
On the countercyclical side, real estate (-0.6%), telecom services (-0.2%), and utilities (unch) all finished in the red, while health care (+0.9%) bucked the trend. The health care space remains slightly lower for the week after today's gain, showing a week-to-date loss of 0.2%.
U.S. Treasuries return to negative territory for the week after Wednesday's risk-on attitude resulted in selling pressure. The 10-yr yield finished five basis points higher at 2.52%.
Today's economic data included FHFA Housing Price Index and MBA Mortgage Index:
The benchmark index jumped out of the gate this morning, as a handful of blue-chip companies reported positive earnings results between yesterday's close and today's open. Seagate Technology (STX 42.67, +5.23) spiked 14.0% after topping earnings and revenue estimates in addition to issuing upbeat guidance. Norfolk Southern (NSC 120.53, +3.91) also finished higher, increasing 3.4% to an all-time high after beating earnings per share estimates.
As far as Dow components, Boeing (BA 167.36, +6.81) also had an upbeat showing while United Technologies (UTX 110.96, -0.65) finished lower as the company's in-line earnings report was met with a sell-the-news response following a large fourth quarter gain.
However, the stock market didn't stop there, moving slowly but deliberately into the afternoon amid positive signals from the political front. President Trump signed two executive orders on Wednesday, one to build a physical barrier along the U.S.-Mexico border and another to strip federal grant money from states and cities that shelter illegal immigrants. And while these reports weren't unexpected, as border control was a staple of Mr. Trump's presidential campaign, they do serve as a reminder of said campaign and the pro-growth hopes attached to it.
Strong sector leadership was also an important factor in today's session as the financials (+1.7%) moved into the top spot on today's leaderboard early, building on a positive showing on Tuesday. With two solid wins under its belt, the financial sector is back near its high from early December, overcoming the sell-the-news response that was invited by earnings from the sector's top components.
The financial sector was followed by industrials (+1.0%) and technology (+1.1%) with the latter benefiting from a 1.5% increase in the PHLX Semiconductor Index. Chipmakers received a nice bump from Texas Instruments (TXN 78.58, +1.50) as the stock jumped 2.0% in reaction to above-consensus earnings.
Energy (+0.6%) underperformed its cyclical peers, as crude oil finished 0.7% lower at $52.76/bbl. The energy component had a somewhat volatile session, reacting to a downtick in the U.S. Dollar Index (99.94, -0.34) and an Energy Information Administration report that showed a build of 2.8 million barrels of crude and a big build in gasoline inventories.
On the countercyclical side, real estate (-0.6%), telecom services (-0.2%), and utilities (unch) all finished in the red, while health care (+0.9%) bucked the trend. The health care space remains slightly lower for the week after today's gain, showing a week-to-date loss of 0.2%.
U.S. Treasuries return to negative territory for the week after Wednesday's risk-on attitude resulted in selling pressure. The 10-yr yield finished five basis points higher at 2.52%.
Today's economic data included FHFA Housing Price Index and MBA Mortgage Index:
- The FHFA Housing Price Index for November rose 0.5%, which followed a revised increase of 0.3% in October (from 0.4%).
- The weekly MBA Mortgage Index rose 4.0% to follow last week's 0.8% increase
- Russell 2000 +1.9% YTD
- Dow Jones Industrial Average +1.6% YTD
- S&P 500 +2.7% YTD
- Nasdaq Composite +5.1% 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 25 | 07:00 | MBA Mortgage Applications Index | 01/21 | 4.0% | NA | NA | 0.8% | |
| Jan 25 | 09:00 | FHFA Housing Price Index | Nov | 0.5% | NA | NA | 0.3% | 0.4% |
| Jan 25 | 10:30 | Crude Inventories | 01/21 | +2.840M | NA | NA | +2.300M |
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Technical Update
DOW JONES INDUSTRIAL AVERAGE20068.51 +155.80 (+0.78%)
Volume: 372.24 Mil above average of 241.36 Mil
Range: 19994.48 - 20082
S&P 500 INDEX
2298.37 +18.30 (+0.80%)
Volume: 2461.51 Mil above average of 1608.23 Mil
Range: 2288.88 - 2299.55
DOW JONES TRANSPORTATION AVERAGE
9421.01 +132.42 (+1.43%)
Volume: 73.82 Mil above average of 45.91 Mil
Range: 9318.07 - 9428.78
NASDAQ COMPOSITE
5656.339844 +55.38 (+0.99%)
Volume: 1959.95 Mil above average of 1831.64 Mil
Range: 5634.330078 - 5658.589844
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Market Internal
NYSE :Lower than average volume @ 879.9M vs 888.4M
Advancers outpaced Decliners(adv/dec): 1909M/1045M
New highs outpaced low(high/low): 311/7
NASDAQ :
Higher than average volume @ 1915.6M vs 1819.3M
Advancers outpaced Decliners(adv/dec): 1988M/840M
New highs outpaced low(high/low): 286/20
Advancers outpaced Decliners by 2.07 to 1 on higher volumes 2795.5 (+3.24%) than avg 2708 (-0.10%)
VOLATILITY S&P500 (VIX) :
10.81 -0.26 (-2.35%)
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Bonds
from Briefing.comMarket Moving Factors
- MBA Mortgage Index for the week ending 1/121: Actual +4.0%, Prior +0.8%
- Average 30-year fixed mortgage rate: Actual 4.35%, Prior 4.27%
- November FHFA Housing Price Index: Actual 0.5%, Prior 0.3%
- Crude Inventories for the week ending 1/21: Actual 2.84 mln barrels, Expected ~+2.8 mln barrels, Prior +2.35 mln barrels
- $15 bln 2-year floating rate note auction: High discount margin 0.14%, Bid-to-cover 3.16 (down from 3.8 in December)
- $34 bln 5-year Treasury auction: High yield 1.988% (1.2-basis point tail), Bid-to-cover 2.38, Indirect bid 63.3%, Direct bid 4.6%
Treasuries Slide Again as Stocks Rally to All-Time Highs
- U.S. Treasuries took significant losses for the second-straight session today as the S&P 500 rallied 0.74% to 2,297 and the 5-year Treasury auction was met with tepid demand. The FHA's House Price Index showed a 0.5% m/m gain in November but this is rather stale data and the resurgence of the reflation trade -- at least as far as stocks and bonds were concerned -- was mostly a technical development. Global equity markets pushed higher as the low-volatility period appears to be coming to an end. Thursday's session features new home sales data and a 7-year Treasury auction. The U.S. Dollar Index is down 0.36% to 99.99
- Yield Check:
- 2-yr: +2 bps to 1.24%
- 5-yr: +4 bps to 1.98%
- 10-yr: +5 bps to 2.52%
- 30-yr: +5 bps to 3.10%
- News:
- The FHFA's U.S. House Price Index rose 0.5% m/m in November (6.1% y/y) after increasing by a downwardly revised 0.3% in October
- The MBA Mortgage Index rose 4.0% w/w for the week ending January 21 after edging higher by 0.8% in the prior week
- Crude oil stockpiles rose by 2.84 million barrels during the week ending January 21, roughly in line with expectations
- The $34 bln 5-year Treasury auction was met with a cool reception, tailing by 1.2 basis points
- High yield: 1.988%
- Bid-to-cover: 2.38 (one-year average was 2.47)
- Indirect bid: 63.3% (61.4%)
- Direct bid: 4.6% (6.4%)
- Commodities:
- WTI crude: -0.64% to $52.84/bbl.
- Gold: -0.91% to $1,1998/troy oz.
- Copper: +0.07% to $2.7105/lb.
- Currencies:
- EUR/USD: +0.19% to 1.0748
- USD/JPY: -0.45% to 113.34
- Data out Thursday:
- December Adv. International Trade in Goods (08:30 ET)
- Initial Jobless Claims for the week ending 1/21 and Continuing Jobless Claims for the week ending 1/14 (08:30 ET)
- December Leading Indicators (10:00 ET)
- December New Home Sales (10:00 ET)
- Natural Gas Inventories for the week ending 1/21 (10:30 ET)
- Treasury Auction:
- $28 bln 7-year Treasury auction (results at 13:00 ET)
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Preview: Thursday, 26 January 2017
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 26 | 08:30 | Adv. International Trade in Goods | Dec | -$65.1B | -$65.0B | -$65.3B | ||
| Jan 26 | 08:30 | Initial Claims | 01/21 | 242K | 246K | 234K | ||
| Jan 26 | 08:30 | Continuing Claims | 01/21 | NA | NA | 2046K | ||
| Jan 26 | 10:00 | Leading Indicators | Dec | 0.4% | 0.5% | 0.0% | ||
| Jan 26 | 10:00 | New Home Sales | Dec | 600K | 589K | 592K | ||
| Jan 26 | 10:30 | Natural Gas Inventories | 01/21 | NA | NA | -243 bcf |
Commentary
The bulls are back in town.
Direction for Thursday, 26 January 2017: Up
Daily Accuracy: 7/13 54%
Direction for Thursday, 26 January 2017: Up
Daily Accuracy: 7/13 54%
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