Market Summary
from Briefing.comIndustry Watch
Strong: Consumer Discretionary, Industrials, Health Care, Utilities, Real Estate
Weak: Energy, Telecom Services, Technology, Consumer Staples
- U.S. Dollar Index backtracks after touching fresh 14-year high yesterday
- Biotechnology displays relative strength
- Automakers and retailers underpin discretionary sector
[BRIEFING.COM] The stock market ended Wednesday on a higher note, ending just below its session high. The S&P 500 finished higher by 0.6%, while the Nasdaq (+0.9%) outperformed the benchmark index. The Dow (+0.3%) will begin Thursday's session within striking distance of the 20k mark.
Nine out of eleven sectors finished the day in positive territory, with materials (+1.4%) claiming the top spot on the leaderboard. Consumer discretionary (+1.3%) held the lead for most of the day after automakers reported better-than-expected sales for the month of December. On a year-over-year basis, General Motors (GM 37.09, +1.94)reported a 10.0% increase (consensus +0.7%), while Ford Motor (F 13.17, +0.58)saw a 0.3% gain (consensus -1.6%). The two names finished up by 5.5% and 4.6%, respectively.
Real estate (+1.2%), financials (+0.9%), and health care (+0.7%) also performed better than the broader market. The health care sector received a big bump from biotechnology, evidenced by the iShares Nasdaq Biotechnology ETF's (IBB 277.53, +7.24) 2.7% gain. Information technology (+0.4%) also finished in the green, despite losses from top components like Apple (AAPL 116.02, -0.13), Microsoft (MSFT 62.30, -0.28), and Alphabet (GOOGL 807.77, -0.24).
After finishing at the top of the leaderboard on Tuesday, telecom services (-0.3%) finished at the bottom on Wednesday. Energy (-0.3%) performed only modestly better as the sector failed to capitalize on crude oil's positive performance. The commodity ended its trading day up 1.8% at $52.28/bbl amid a weaker U.S. dollar. The U.S. Dollar Index (102.58, -0.66) finished lower by 0.6%.
On the data front, the Federal Reserve released the minutes from its December meeting, showing a discussion about the recent surge in the dollar that lifted the U.S. Dollar Index (102.72, -0.49) to a fresh 14-year high. Members of the committee discussed the potential headwinds stemming from dollar strength, but hedged that discussion by noting that continued dollar strength might keep down inflation. The minutes showed uncertainty over possible changes in fiscal policies, but members agreed that near-term risks to the economic outlook appear roughly balanced.
Treasuries climbed to new highs immediately after the release, but finished the day near their flat lines. The 10-yr yield ended Wednesday unchanged at 2.45%.
Thursday's economic data will include December Challenger Job Cuts at 7:30 ET, December ADP Employment Change (Briefing.com consensus 170,000) at 8:15 ET, Initial Claims (Briefing.com consensus 265,000) at 8:30 ET, and the December ISM Services Index (Briefing.com consensus 56.6) at 10:00 ET.
On the earning front, several companies are scheduled to report before Thursday's opening bell with Monsanto (MON 105.05, +0.28) and Walgreens Boot Alliance (WBA 82.98, +0.02) being the most notable.
Nine out of eleven sectors finished the day in positive territory, with materials (+1.4%) claiming the top spot on the leaderboard. Consumer discretionary (+1.3%) held the lead for most of the day after automakers reported better-than-expected sales for the month of December. On a year-over-year basis, General Motors (GM 37.09, +1.94)reported a 10.0% increase (consensus +0.7%), while Ford Motor (F 13.17, +0.58)saw a 0.3% gain (consensus -1.6%). The two names finished up by 5.5% and 4.6%, respectively.
Real estate (+1.2%), financials (+0.9%), and health care (+0.7%) also performed better than the broader market. The health care sector received a big bump from biotechnology, evidenced by the iShares Nasdaq Biotechnology ETF's (IBB 277.53, +7.24) 2.7% gain. Information technology (+0.4%) also finished in the green, despite losses from top components like Apple (AAPL 116.02, -0.13), Microsoft (MSFT 62.30, -0.28), and Alphabet (GOOGL 807.77, -0.24).
After finishing at the top of the leaderboard on Tuesday, telecom services (-0.3%) finished at the bottom on Wednesday. Energy (-0.3%) performed only modestly better as the sector failed to capitalize on crude oil's positive performance. The commodity ended its trading day up 1.8% at $52.28/bbl amid a weaker U.S. dollar. The U.S. Dollar Index (102.58, -0.66) finished lower by 0.6%.
On the data front, the Federal Reserve released the minutes from its December meeting, showing a discussion about the recent surge in the dollar that lifted the U.S. Dollar Index (102.72, -0.49) to a fresh 14-year high. Members of the committee discussed the potential headwinds stemming from dollar strength, but hedged that discussion by noting that continued dollar strength might keep down inflation. The minutes showed uncertainty over possible changes in fiscal policies, but members agreed that near-term risks to the economic outlook appear roughly balanced.
Treasuries climbed to new highs immediately after the release, but finished the day near their flat lines. The 10-yr yield ended Wednesday unchanged at 2.45%.
Thursday's economic data will include December Challenger Job Cuts at 7:30 ET, December ADP Employment Change (Briefing.com consensus 170,000) at 8:15 ET, Initial Claims (Briefing.com consensus 265,000) at 8:30 ET, and the December ISM Services Index (Briefing.com consensus 56.6) at 10:00 ET.
On the earning front, several companies are scheduled to report before Thursday's opening bell with Monsanto (MON 105.05, +0.28) and Walgreens Boot Alliance (WBA 82.98, +0.02) being the most notable.
- Russell 2000 +2.2% YTD
- Dow Jones Industrial Average +0.9% YTD
- S&P 500 +1.4% YTD
- Nasdaq Composite +1.7% 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 04 | 07:00 | MBA Mortgage Applications Index | 12/31 | 0.1% | NA | NA | 2.5% | |
| Jan 04 | 14:00 | Auto Sales | Dec | 5.30M | NA | NA | 5.21M | -- |
| Jan 04 | 14:00 | Truck Sales | Dec | 9.25M | NA | NA | 8.92M | -- |
| Jan 04 | 14:00 | FOMC Minutes | Dec | NA | NA | NA |
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Technical Update
DOW JONES INDUSTRIAL AVERAGE19942.16 +60.40 (+0.30%)
Volume: 280.01 Mil above average of 181.54 Mil
Range: 19878.83 - 19956.14
S&P500 INDEX
2270.75 +12.92 (+0.57%)
Volume: 2097.36 Mil above average of 1208.54 Mil
Range: 2261.6 - 2272.82
DOW JONES TRANSPORTATION AVERAGE
9115.72 +91.86 (+1.02%)
Volume: 55.80 Mil above average of 31.72 Mil
Range: 9035.34 - 9121.54
NASDAQ COMPOSITE
5477 +47.92 (+0.88%)
Volume: 1883.36 Mil below average of 1891.18 Mil
Range: 5440.240234 - 5482.350098
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Market Internal
NYSE :Higher than average volume @ 932M vs 904.9M
Advancers outpaced Decliners(adv/dec): 2582M/444M
New highs outpaced low(high/low): 188/4
NASDAQ :
Higher than average volume @ 1872.5M vs 1829.7M
Advancers outpaced Decliners(adv/dec): 2253M/653M
New highs outpaced low(high/low): 178/26
Advancers outpaced Decliners by 4.41 to 1 on higher volumes 2804.5 (+2.55%) than avg 2735 (+0.49%)
VOLATILITY S&P500 (VIX) :
11.85 -1.00 (-7.78%)
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Bonds
from Briefing.comBonds
Market Moving Factors- MBA Mortgage Index for the week ending 12/31: Actual 0.1%, Prior 2.5%
- December Auto and Truck Sales:
- Fiat Chrysler: -10% vs. estimate of -14%
- Ford: +0.3% vs. estimate of -1.6%
- GM: +10% vs. estimate of +4.4%
- Nissan: +9.7% vs. estimate of -2.8%
- Toyota: +2%
- December ISM - New York Business Conditions: 63.8, 52.5 prior
- December FOMC Minutes: Faster hikes could have balance sheet implications; risk of undershooting NAIRU (natural rate of unemployment) increased
Treasuries Stay Unchanged After FOMC Minutes
- U.S. Treasuries covered a lot of ground today only to end the session mostly unchanged. The U.S. economic data was rather light with only car manufacturer sales having much consequence. Auto sales were better than expected in December although some of that was due to strong dealer incentives to buyers. The FOMC minutes from the December 13-14 meeting, at which the committee voted unanimously to raise rates, showed that almost all participants saw greater upside risks to their growth and inflation forecasts due to the possibility of large fiscal stimulus. The committee still sees large uncertainty, however, with respect to fiscal policy and its effects on growth and inflation. The U.S. Dollar Index is down 0.49% to 102.70 and the S&P 500 is up 0.58% to 2,270.9
- Yield Check:
- 2-yr: unch at 1.22%
- 5-yr: -1 bp to 1.94%
- 10-yr: unch at 2.45%
- 30-yr: unch at 3.05%
- News:
- The MBA Mortgage Index rose by 0.1% w/w for the week ending 12/31 after jumping by 2.5% in the prior week. The average 30-year fixed rate fell to 4.39% from 4.41%
- The six largest automakers easily beat sales estimates in December, partly due to very generous sales incentives
- The minutes from the FOMC's December 13-14 meeting said, in part:
- The staff's forecast for real GDP growth over the next several years was slightly higher, on balance, largely reflecting the effects of the staff's provisional assumption that fiscal policy would be more expansionary in the coming years. These effects were substantially counterbalanced by the restraint from the higher assumed paths for longer-term interest rates and the foreign exchange value of the dollar.
- Members agreed that there was heightened uncertainty about possible changes in fiscal and other economic policies as well as their effects.
- However, several others pointed out that a further rise in the dollar might continue to hold down inflation
- ("Members = voters", "participants" refers to the whole committee)
- Commodities:
- WTI crude: +1.47% to $53.09/bbl.
- Gold: +0.13% to $1,163.5/troy oz.
- Copper: +2.73% to $2.557/lb.
- Currencies:
- EUR/USD: +0.60% to 1.0466
- USD/JPY: -0.21% to 117.54
- Data out Thursday:
- December Challenger Job Cuts (07:30 ET)
- December ADP Employment Change (08:15 ET)
- Initial Jobless Claims for the week ending 12/31 and Continuing Jobless Claims for the week ending 12/24 (08:30 ET)
- ISM Non-Manufacturing Index (10:00 ET)
- Natural Gas Inventories for the week ending 12/31 (10:30 ET)
- Crude Inventories for the week ending 12/17 (11:00 ET)
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Preview: Thursday, 5 January 2017
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 05 | 07:30 | Challenger Job Cuts | Dec | NA | NA | -13.0% | ||
| Jan 05 | 08:15 | ADP Employment Change | Dec | 180K | 170K | 216K | ||
| Jan 05 | 08:30 | Initial Claims | 12/31 | 260K | 265K | 265K | ||
| Jan 05 | 08:30 | Continuing Claims | 12/24 | NA | NA | 2102K | ||
| Jan 05 | 10:00 | ISM Services | Dec | 57.5 | 56.6 | 57.2 | ||
| Jan 05 | 10:30 | Natural Gas Inventories | 12/31 | NA | NA | -237 bcf | ||
| Jan 05 | 11:00 | Crude Inventories | 12/30 | NA | NA | 0.600M |
Commentary
Both the DOW and SPX are at crucial resistance levels, but market internals suggest that the bulls still have momentum, they would probably break the levels
Direction for 5 January 2017: UP
Daily Accuracy: 1/1 100%
Direction for 5 January 2017: UP
Daily Accuracy: 1/1 100%
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