| | |
Market Snapshot
briefing.com
| Dow | 34988.84 | +422.67 | (1.22%) | | Nasdaq | 14139.75 | +348.84 | (2.53%) | | SP 500 | 4471.07 | +69.40 | (1.58%) | | 10-yr Note | -5/32 | 2.044 |
|
| | NYSE | Adv 2483 | Dec 4.3 bln | Vol 919.2 mln | | Nasdaq | Adv 3392 | Dec 1007 | Vol 4.3 bln |
Industry Watch
| Strong: Information Technology, Consumer Discretionary |
| | Weak: Energy, Utilities |
Moving the Market
-- Relief rally on de-escalation news
-- Producer prices for January were much hotter than expected
-- S&P 500 closes above 200-day moving average (4455)
|
Stocks rally on de-escalation news
15-Feb-22 16:25 ET
Dow +422.67 at 34988.84, Nasdaq +348.84 at 14139.75, S&P +69.40 at 4471.07
[BRIEFING.COM] The S&P 500 rallied 1.6% on Tuesday, as the market welcomed a potential de-escalation in the Russia-Ukraine situation. The Nasdaq Composite (+2.5%) and Russell 2000 (+2.8%) both gained at least 2.5% while the Dow Jones Industrial Average gained 1.2%.
Prior to the open, reports indicated that Russia pulled back some troops from its border with Ukraine, which the market construed as a sign that Russia was indeed looking to resolve security issues through diplomacy. Most of today's gains were registered at the open following the de-escalation news.
The market proceeded to trade sideways the rest of the session, albeit with minor volatility after President Biden cautioned that the U.S. hadn't verified the withdrawal and that Russia could still attack. Nevertheless, the S&P 500 closed at session highs, reclaiming its 200-day moving average (4455), amid gains in nine of its 11 sectors.
The information technology (+2.7%) and consumer discretionary (+2.1%) sectors led the advance with gains over 2.0%. Conversely, the energy (-1.4%) and utilities (-0.6%) sectors closed lower.
Energy stocks struggled with the retracement in oil prices ($92.07, -3.41, -3.6%), which was a result of easing geopolitical angst. The latter was also the primary driver behind the five-basis-point increase in the 10-yr yield (2.05%), the softer dollar (96.01, -0.36, -0.4%), and the modest decline in gold prices ($1856.40, -13.00, -0.7%).
Interestingly, the 10-yr yield barely reacted to a much hotter-than-expected Producer Price Index (PPI) report. The index for final demand rose 1.0% m/m in January (Briefing.com consensus +0.5%), leaving it up 9.7% yr/yr. Excluding food and energy, the index for final demand rose 0.8% m/m (Briefing.com consensus +0.4%), leaving it up 8.3% yr/yr.
The PPI report may not have that surprising considering the hot CPI print last week while others interpreted the data as a sign of peak inflation, especially if the Fed follows through on being more aggressive in tightening policy. The 2-yr yield decreased two basis points to 1.57%.
In corporate news, Marriott (MAR 181.20, +8.97, +5.8%) reported better-than-expected earnings results, providing a boost for travel-related names. Intel (INTC 48.44, +0.86, +1.8%) announced an acquisition of Tower Semi (TSEM 47.07, +13.94, +42.1%) for $5.4 billion, or $53.00 per share, in cash.
Reviewing Tuesday's economic data:
- The Producer Price Index for final demand jumped 1.0% month-over-month in January (Briefing.com consensus +0.5%) following an upwardly revised 0.4% increase (from +0.2%) in December. Excluding food and energy, the index for final demand increased 0.8% month-over-month (Briefing.com consensus +0.4%) following an upwardly revised 0.6% increase (from 0.5%) in December. On a year-over-year basis, the index for final demand was up 9.7% year-over-year on an unadjusted basis while the index for final demand, less food and energy, was up 8.3% year-over-year on an unadjusted basis.
- The key takeaway from the report is that producer inflation pressures are clearly elevated. That is going to crimp profit margins unless those higher costs can be passed onto consumers, which is a problem unto itself. Net-net, inflation is all around and it has yet to show any meaningful signs of abating.
- The Empire State Manufacturing Survey for February increased to 3.1 (Briefing.com consensus 25.0) from -0.7 in January.
Looking ahead, investors will receive a big batch of data on Wednesday, including Retail Sales for January, Industrial Production and Capacity Utilization for January, and the NAHB Housing Market Index for February along with the FOMC Minutes from the January meeting.
- Dow Jones Industrial Average -3.7% YTD
- S&P 500 -6.2% YTD
- Russell 2000 -7.5% YTD
- Nasdaq Composite -9.6% YTD
Crude futures settle sharply lower amid de-escalation news
15-Feb-22 15:30 ET
Dow +384.99 at 34951.16, Nasdaq +319.19 at 14110.10, S&P +64.56 at 4466.23
[BRIEFING.COM] The S&P 500 is up 1.5% but remains down 1.1% for the month.
One last look at the sectors shows seven up more than 1.0%, including a 2.6% gain in the consumer discretionary sector. The energy (-1.4%) and utilities (-0.7%) sectors, however, continue to trade lower.
WTI crude futures settled lower by 3.6%, or $3.41, to $92.07/bbl amid the de-escalation news with Russia and the West.
Utility stocks clipped by higher rates
15-Feb-22 15:05 ET
Dow +384.02 at 34950.19, Nasdaq +303.96 at 14094.87, S&P +62.08 at 4463.75
[BRIEFING.COM] The S&P 500 continues to trade higher by 1.4% while the Russell 2000 leaps ahead with a 2.6% gain.
The utilities sector (-0.8%) has extended losses amid broad-based weakness within the sector. The increase in long-term rates has pressured the rate-sensitive group with the 10-yr yield currently up four basis points to 2.04%.
Looking ahead, Airbnb (ABNB 178.51, +8.87, +5.3%) and Roblox (RBLX 71.91, +3.69, +5.3%) are some notable companies that will report earnings after the close.
Monolithic Power gains in sympathy to TSEM buyout news, FIS falls following earnings/guidance
15-Feb-22 14:25 ET
Dow +395.63 at 34961.80, Nasdaq +289.35 at 14080.26, S&P +61.68 at 4463.35
[BRIEFING.COM] The S&P 500 (+1.40%) still sits in second place to this point on Tuesday.
S&P 500 constituents Monolithic Power (MPWR 477.04, +43.72, +10.09%), American Airlines (AAL 18.83, +1.40, +8.03%), and Henry Schein (HSIC 81.61, +5.82, +7.68%) are some of today's top performers. MPWR gains as a sympathy play to Tower Semi's (TSEM 47.08, +13.95, +42.11%) move today, AAL grabbed an Outperform recommendation from Wolfe Research this morning, while HSIC posts a strong move in reaction to upbeat earnings and guidance. |
|
