Wall Street stalls as tariff deadline nears
10-Dec-19 16:15 ET
Dow -27.88 at 27881.63, Nasdaq -5.64 at 8616.19, S&P -3.44 at 3132.52
briefing.com
[BRIEFING.COM] The S&P 500 declined 0.1% on Tuesday in a tight-ranged session, as investors digested several developments on trade, including a report that the U.S. and China could delay the Dec. 15 tariffs. The Dow Jones Industrial Average (-0.1%) and Nasdaq Composite (-0.1%) also lost 0.1%, while Russell 2000 (+0.1%) added 0.1%.
According to The Wall Street Journal, a tariff delay would come as negotiators work to ensure China commits to purchasing more U.S. farm goods. A follow-up report from the South China Morning Post indicated that the delay is likely, but NEC Director Kudlow responded that the tariffs are still on the table. Mr. Kudlow could not confirm if the tariffs will be delayed.
This unresolved trade front was contrasted with House Speaker Pelosi announcing that a USMCA deal has been reached. Of course, the market has always been more concerned about a U.S.-China trade deal than a USMCA deal, so the latter didn't provide much enthusiasm in the market. Impeachment talk remained a non-factor.
Most S&P 500 sectors wavered near their unchanged marks throughout the session. The real estate (-0.7%) and materials (-0.6%) sectors diverted with relatively larger declines, while the energy (+0.2%) and health care (+0.2%) sectors finished higher.
A wait-and-see mindset continued to influence trading, leading to the absence of buying conviction, with a Fed policy decision and the Consumer Price Index for November also due out tomorrow. More trade headlines should be anticipated this week, with expectations for those tariffs on Chinese imports to be delayed.
AutoZone (AZO 1250.00, +81.00, +6.9%) and Stitch Fix (SFIX 26.23, +1.21, +4.8%) outperformed in earnings-driven advances, while Netflix (NFLX 293.12, -9.38, -3.1%) underperformed after it was downgraded to Underperform from Neutral at Needham.
U.S. Treasuries finished the session mixed. The 2-yr yield increased three basis points to 1.65%, and the 10-yr yield was unchanged at 1.83%. The U.S. Dollar Index declined 0.2% to 97.45. WTI crude increased 0.4%, or $0.24, to $59.21/bbl.
Reviewing Tuesday's economic data, which included the NFIB Small Business Optimism Index for November and and the revised Q3 readings for Productivity and Unit Labor Costs:
- Nonfarm business sector labor productivity decreased 0.2% in the third quarter (Briefing.com consensus -0.1%), according to the revised estimate, versus a previously reported 0.3% decrease. Unit labor costs increased 2.5% (Briefing.com consensus 3.4%) versus a previously reported 3.6% increase.
- The key takeaway from the report remains the same as the preliminary estimate: the decline in productivity and the jump in unit labor costs points to profit margin pressures for businesses.
- The NFIB Small Business Optimism Index for November increased to 104.7 from 102.4 in October.
Looking ahead, investors will receive the Consumer Price Index for November, the FOMC Rate Decision, the Treasury Budget for November, and the weekly MBA Mortgage Applications Index on Wednesday:
- Nasdaq Composite +29.9% YTD
- S&P 500 +25.0% YTD
- Russell 2000 +21.0% YTD
- Dow Jones Industrial Average +19.5% YTD
Market Snapshot
| Dow | 27881.63 | -27.88 | (-0.10%) | | Nasdaq | 8616.19 | -5.64 | (-0.07%) | | SP 500 | 3132.52 | -3.44 | (-0.11%) | | 10-yr Note | -2/32 | 1.840 |
|
| | NYSE | Adv 1471 | Dec 1406 | Vol 780.0 mln | | Nasdaq | Adv 1609 | Dec 1479 | Vol 2.0 bln |
Industry Watch
| Strong: Energy, Health Care |
| | Weak: Real Estate, Materials |
Moving the Market
-- Wall Street stalls as tariff deadline nears
-- The U.S. and China are reportedly discussing plans to delay Dec. 15 tariffs
-- USMCA tentative agreement reached
|
WTI crude inches higher
10-Dec-19 15:25 ET
Dow -9.60 at 27899.91, Nasdaq -1.75 at 8620.08, S&P -1.91 at 3134.05
[BRIEFING.COM] The S&P 500 is now down 0.1%, while the Russell 2000 trades up by 0.1%.
One last look at the S&P 500 sectors shows real estate (-0.6%) and materials (-0.6%) underperforming the broader market. Conversely, the energy (+0.2%), health care (+0.1%), and information technology (+0.1%) sectors show relative strength.
WTI crude settled up $0.24 (+0.4%) to $59.21/bbl. |
