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Market Snapshot
briefing.com
| Dow | 32272.79 | -638.11 | (-1.94%) | | Nasdaq | 11754.22 | -332.05 | (-2.75%) | | SP 500 | 4017.82 | -97.95 | (-2.38%) | | 10-yr Note |
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| | NYSE | Adv 568 | Dec 2749 | Vol 895 mln | | Nasdaq | Adv 1224 | Dec 3414 | Vol 5.3 bln |
Industry Watch
| Strong: -- |
| | Weak: Energy, Materials, Financials, Health Care, Utilities, Communication Services, Information Technology, Real Estate, Industrials, Consumer Staples, Consumer Discretionary |
Moving the Market
-- S&P 500 trades below last week's lows
-- Lingering growth/rate-hike concerns following ECB meeting
-- Little buying interest in front of May CPI report on Friday
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Closing Summary
09-Jun-22 16:15 ET
Dow -638.11 at 32272.79, Nasdaq -332.05 at 11754.22, S&P -97.95 at 4017.82
[BRIEFING.COM] Today is Thursday, yet the stock market traded as if it had a nervous eye on Friday. That's when the May Consumer Price Index report will be released, offering fresh insight on the inflation trend and newfound perspective on the meaning for monetary policy.
Broad-based selling interest today created an impression that market participants are not expecting a comforting report. All 11 S&P 500 sectors finished lower, sporting losses that ranged from 1.5% to 2.8%, and the CBOE Volatility Index jumped 9.1% to 26.15.
The major indices all closed at their lows for the session, having cascaded lower through the afternoon trade. The S&P 500 was unable to maintain a posture above 4100 and selling interest picked up after it violated a notable support zone in the 4070-4080 area, which encompassed last week's lows.
The worst-performing sector was the communication services sector (-2.8%), but the information technology (-2.7%) and financial (-2.6%) sectors were close behind. Eight of the 11 sectors declined at least 2.3%.
Some will call today a de-risking trade. That is partially true, but it also had to do simply with not wanting to take on risk in front of the CPI report, which the White House said yesterday should be "elevated." To this point, the weakness wasn't owed so much to concerted selling interest as it was to a lack of buying interest.
Trading volume was not particularly heavy given the scope of today's losses. 895 million shares traded at the NYSE, which wasn't even the highest volume total of the week. The general lack of buying interest was evident in the market breadth, which favored declining issues by nearly a 5-to-1 margin at the NYSE and a margin approaching 3-to-1 at the Nasdaq.
With the specter of the CPI report looming over the market, participants also shied away from today's market after a policy directive from the European Central Bank (ECB) made it clear that high inflation is a universal problem and that most of the world's leading central banks are shifting to a hawkish-minded policy bias that will curtail growth prospects.
Briefly, the ECB left its key interest rates unchanged today, but signaled that it expects to raise its key interest rates by 25 basis points at the July meeting and follow suit with additional rate hikes in September and beyond. That view was communicated along with a decision to end its net asset purchase program on July 1, and an updated projection for annual inflation to be 6.8% in 2022 (up from prior view of 5.1%) and 3.5% in 2023 (up from prior view of 2.1%).
This news effectively took the steam out of the futures market, which had been trading higher ahead of today's open, and set the tone for a risk-averse day along with reports that a district in southwest Shanghai was locked down for COVID testing while entertainment venues in a Beijing district were shuttered due to COVID concerns.
The 10-yr note yield settled its session up two basis points at 3.04%, but the 2-yr note yield jumped five basis points to 2.82% and hit its highest level since late-2018. The U.S. Dollar Index increased 0.8% to 103.32 as the euro pivoted from a point of strength immediately after the ECB announcement to a point of weakness. EUR/USD was down 0.9% to 1.0614. WTI crude futures had a relatively calm session, settling the day down 0.5% at $121.40/bbl.
Reviewing today's economic data:
- Initial jobless claims for the week ending June 4 increased by 27,000 to 229,000 (Briefing.com consensus 208,000) while continuing claims for the week ending May 28 were unchanged at 1.306 million.
- The key takeaway from the report is that nothing alarming has popped up yet in the trend for initial and continuing claims even though some companies have started to signal a slowdown in hiring plans. Claims are still close to historically low levels.
Looking ahead, market participants will receive the May CPI report along with the core-CPI report, which excludes food and energy, at 8:30 a.m. ET on Friday. That will be followed by the preliminary University of Michigan Index of Consumer Sentiment for June at 10:00 a.m. ET and the Treasury Budget for May at 2:00 p.m. ET.
- Dow Jones Industrial Average: -11.3% YTD
- S&P 400: -13.0% YTD
- S&P 500: -15.7% YTD
- Russell 2000: -17.5% YTD
- Nasdaq Composite: -24.9% YTD
Looking ahead to tomorrow's CPI report
09-Jun-22 15:30 ET
Dow -422.17 at 32488.73, Nasdaq -245.23 at 11841.04, S&P -68.66 at 4047.11
[BRIEFING.COM] The major indices are right around session lows. The late session selling interest may be in anticipation of the CPI number coming out before tomorrow's open.
The information technology sector (-1.8%) is the worst performing sector in the S&P 500 heading into the close. One of the only constituents trading in the green is NXP Semi (NXPI 185.31, +8.21, +4.6%) after reports that Samsung (SSNLF) may be looking to acquire the semiconductor company.
Looking ahead, market participants will receive the CPI (Briefing.com consensus 0.7%) and Core CPI (Briefing.com consensus 0.5%), which excludes food and energy, for May at 8:30 ET. In addition, the University of Michigan Consumer Sentiment Preliminary (Briefing.com consensus 59.0) reading for June will be released at 10:00 ET.
The primary trading catalyst Friday, though, is certain to be the CPI report.
Homebuilder showing strength
09-Jun-22 14:55 ET
Dow -243.29 at 32667.61, Nasdaq -164.13 at 11922.14, S&P -41.86 at 4073.91
[BRIEFING.COM] The S&P 500 has broken to new lows for the session and is challenging an important support zone in the 4070-4080 area. That area is consistent with last week’s lows, but a violation here on a closing basis sets up a potential retracement to the 4000 level as there isn’t much support below this area.
The market’s take on the May CPI report on Friday could end up being the change agent that drives the S&P 500 back toward its lows for the year or gets it back on an upward-trending path. To this end, the response by the Treasury market will also hold some sway over things.
The consumer discretionary sector (-0.5%) has lost its early gains and now trades near its session low.
One bright spot in the sector is the homebuilders which have taken a hit lately, so the buying seen here could be bargain hunting activity. PulteGroup (PHM 44.58, +0.66, +1.5%) and DR Horton (DHI 73.75, +0.80, +1.1%) are outperforming the broader market, up more than 1.0%. In the same vein, the iShares U.S. Home Construction ETF (ITB) is up 0.9%.
NXP Semi outperforms on M&A chatter; S&P 500 at session lows
09-Jun-22 14:30 ET
Dow -157.90 at 32753.00, Nasdaq -126.50 at 11959.77, S&P -30.14 at 4085.63
[BRIEFING.COM] We've continued a slightly lower trajectory in the last half hour, the benchmark S&P 500 (-0.73%) now at session lows.
S&P 500 constituents Moderna (MRNA 136.29, -12.24, -8.24%), Carnival (CCL 11.92, -1.01, -7.81%), and Warner Bros. Discovery (WBD 15.95, -0.72, -4.32%) pepper the bottom of today's standings. MRNA is lower likely on Novavax (NVAX 42.09, -8.02, -16.00%) sympathy, while CCL and cruise peers were initiated at Susquehanna (though CCL was given a less bullish stance), and WBD falls alongside communication services (-1.26%) peers.
Meanwhile, chipmaker NXP Semi (NXPI 188.51, +11.44, +6.46%) is today's top gain getter following M&A chatter.
Gold slightly lower as dollar, yields rise
09-Jun-22 14:00 ET
Dow -126.27 at 32784.63, Nasdaq -103.87 at 11982.40, S&P -24.75 at 4091.02
[BRIEFING.COM] In the last half hour both the tech-heavy Nasdaq Composite (-0.86%) and the S&P 500 (-0.60%) have made new session lows.
Gold futures settled $3.70 lower (-0.2%) to $1,852.80/oz following news from the ECB that it could raise interest rates in more than a decade; also applying pressure is today's move higher in the dollar and yields.
Meanwhile, the U.S. Dollar Index is up about +0.6% to $103.13.
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