Market Snapshot
briefing.com
| Dow | 34838.16 | -97.31 | (-0.28%) | | Nasdaq | 14681.05 | +8.39 | (0.06%) | | SP 500 | 4387.16 | -8.10 | (-0.18%) | | 10-yr Note | +1/32 | 1.215 |
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| | NYSE | Adv 1530 | Dec 1730 | Vol 835.0 mln | | Nasdaq | Adv 2159 | Dec 2088 | Vol 3.7 bln |
Industry Watch
| Strong: Utilities, Consumer Discretionary, Health Care |
| | Weak: Materials, Industrials, Energy |
Moving the Market
-- Stocks fade early gains as long-term rates dropped
-- 10-yr yield settled at 1.17% amid peak growth/inflation expectations
-- Mixed but expansionary manufacturing PMIs for July in the U.S., Asia, and Europe
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Stocks fade early gains as Treasury yields drop
02-Aug-21 16:15 ET
Dow -97.31 at 34838.16, Nasdaq +8.39 at 14681.05, S&P -8.10 at 4387.16
[BRIEFING.COM] The S&P 500 (-0.2%), Nasdaq Composite (+0.1%), and Dow Jones Industrial Average (-0.3%) closed mixed and little changed on Monday, with risk sentiment pressured by a noticeable decline in long-term interest rates. The Russell 2000 lost 0.5% after being up 1.4% in early action, while the large-cap indices were up as much as 0.6-0.7% intraday.
The positive start was attributed to several factors: new inflows on the first trading day of the month; the Senate finalized the text of the $1 trillion bipartisan infrastructure bill; Square (SQ 272.38, +25.12, +10.2%) announced a $29 billion, all-stock acquisition of Australian company Afterpay; and July manufacturing activity in Asia and Europe remained in expansionary territory.
In the U.S., the July ISM Manufacturing Index marked the 14th straight month of expansion for the sector, but the index missed expectations and decelerated to 59.5% (Briefing.com consensus 60.7%) from 60.6% in June. The Prices Index of the report decreased to 85.7% from 92.1% while the construction spending report for June also missed expectations.
The 10-yr yield was trading at 1.21% right before the two reports were released at 10:00 a.m. ET, then dropped to 1.15% over the next two hours as the data reinforced expectations for growth/inflation rates to moderate. The 10-yr yield settled the session at 1.17%, or seven basis points below Friday's settlement.
Stocks faded their early gains as long-term rates extended their declines, leaving the S&P 500 sectors mixed after each started in the green. On the downside, the materials (-1.2%), industrials (-0.7%), and energy (-0.7%) sectors lagged while the consumer discretionary (+0.3%) and utilities (+0.8%) sectors outperformed.
The Philadelphia Semiconductor Index (+0.6%) was a pocket of relative strength, as components keyed off ON Semiconductor's (ON 43.64, +4.58, +11.7%) better-than-expected earnings report and upside Q3 guidance. Global Payments (GPN 171.79, -21.62, -11.2%) was a notable earnings loser in the information technology sector (-0.4%).
Separately, Tesla (TSLA 709.67, +22.57, +3.3%) was initiated with an Outperform rating at KGI Securities while Pfizer (PFE 43.96, +1.15, +2.7%) hit a 52-week high on news that its COVID-19 vaccine could receive full FDA approval as soon as next month.
The 2-yr yield decreased one basis point to 0.17%. The U.S. Dollar Index decreased 0.1% to 92.07. WTI crude futures fell 3.5%, or $2.56, to $71.31/bbl amid demand concerns.
Reviewing Monday's economic data:
- The July ISM Manufacturing Index checked in at 59.5% (Briefing.com consensus 60.7%), down from 60.6% in June but up from 53.7% a year ago. A number above 50.0% is indicative of expansion. July marked the 14th straight month of expansion for the manufacturing sector, albeit at a slightly slower pace than what was seen in June.
- The key takeaway from the report is the acknowledgment that manufacturers and suppliers continue to struggle to meet increasing demand levels due to a range of factors that includes record-long raw material lead times, shortages of basic materials, transportation difficulties, worker absenteeism, and difficulty filling positions.
- Total construction spending increased 0.1% m/m in June (Briefing.com consensus +0.5%) following an upwardly revised 0.2% decline (from -0.3%) in May. Total private construction rose 0.4% m/m while total public construction spending fell 1.2%. On a year-over-year basis, total construction spending was up 8.2%.
- The key takeaway from the report is the ongoing strength in private residential construction spending, which is a byproduct of strong demand driven by a scarce supply of existing homes for sale.
- The final IHS Market Manufacturing PMI for June checked in at 63.4, up from 63.1 in the preliminary reading.
Looking ahead, investors will receive Factory Orders for June on Tuesday.
- S&P 500 +16.8% YTD
- Dow Jones Industrial Average +13.8% YTD
- Nasdaq Composite +13.9% YTD
- Russell 2000 +12.2% YTD
Crude futures settle sharply lower
02-Aug-21 15:30 ET
Dow -41.95 at 34893.52, Nasdaq +28.04 at 14700.70, S&P -1.87 at 4393.39
[BRIEFING.COM] The S&P 500 has turned negative with a 0.1% decline in a disappointing session from a price action perspective. The benchmark index was up 0.6% to start the day.
One last look at the S&P 500 sectors shows mixed results after each traded in positive territory in early action. The materials (-0.9%), industrials (-0.5%), and consumer staples (-0.4%) sectors underperform in the red, while the utilities (+0.6%) and consumer discretionary (+0.5%) sectors outperform in the green.
WTI crude futures settled sharply lower by 3.5%, or $2.56, to $71.31/bbl amid demand concerns.
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