Market Snapshot
briefing.com
| Dow | 30364.83 | -151.91 | (-0.50%) | | Nasdaq | 10828.34 | +19.12 | (0.18%) | | SP 500 | 3735.48 | -14.15 | (-0.38%) | | 10-yr Note |
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| | NYSE | Adv 1245 | Dec 2069 | Vol 1.1 bln | | Nasdaq | Adv 2004 | Dec 2726 | Vol 4.7 bln |
Industry Watch
| Strong: Information Technology, Energy |
| | Weak: Consumer Staples, Real Estate, Utilities, Health Care, Financials, Materials |
Moving the Market
-- Nervous trading in front of FOMC decision and updated economic projections on Wednesday
-- Treasury market remains under pressure
-- Concerns about downward earnings revisions
-- Oracle delivers better than expected earnings results and outlook
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Closing Stock Market Summary
14-Jun-22 16:20 ET
Dow -151.91 at 30364.83, Nasdaq +19.12 at 10828.34, S&P -14.15 at 3735.48
[BRIEFING.COM] The stock market tossed and turned today, but it was really the interest rate markets that called the shots -- and those markets were more foe than friend.
The 2-yr note yield settled the session up 16 basis points at 3.43% and the 10-yr note yield settled the session up 12 basis points at 3.48%. Meanwhile, the fed funds futures market upped its rate-hike game, pricing in the probability of more aggressive policy moves by the FOMC at upcoming meetings, including the June meeting which will culminate with the release of a new policy directive and updated economic and interest rate projections on Wednesday.
Briefly, the CME's Fed Watch Tool shows a 96.6% probability of a 75-basis point rate hike on Wednesday (up from 3.9% a week ago), a 95.8% probability of another 75-basis point rate hike in July (up from 0.4% a week ago), and a 97.0% probability of another 50-basis point rate hike in September.
If this course is followed by the FOMC, the target range for the fed funds rate will be 2.75-3.00% after the September meeting. A week ago, the fed funds futures market assigned only a 0.2% probability to the target range being that high after the September meeting.
Market participants looked at the rapid pace of change in Treasury yields and fed funds futures with some trepidation, worrying that the higher rates will lead to a marked slowdown in economic growth -- or possibly a recession -- that will lead to a marked downturn in earnings growth.
Consequently, rebound efforts today lacked conviction. The major indices all hit new 52-week lows at one point today. The S&P 500 for its part flirted with a break of the 3700 mark. It stopped short at 3705.68 where it found some buying interest that repaired a small part of today's damage.
Things would have been worse if not for the outperformance of the information technology sector (+0.6%), which is the market's most heavily-weighted sector. It was helped by some pleasing earnings results and guidance from Oracle (ORCL 70.78, +6.73, +10.5%) and relative strength in the semiconductor stocks. The Philadelphia Semiconductor Index gained 0.6%.
The only other sector that eked out a win was the energy sector (+0.1%), but that was a hollow victory considering it was up as much as 3.2% earlier in the day.
The energy sector pulled back intraday along with oil prices ($118.50, -2.43, -2.0%), which had edged above $123.00/bbl earlier in the session. Meanwhile, natural gas futures ($7.29/mmbtu, -1.32, -15.3%) were down big all day, getting squeezed by excess supply concerns following a report from Freeport LNG that a fire last week at a Texas facility interrupted the transfer of LNG from storage tanks to dock facilities. Freeport LNG does not expect the plant to return to full operations until late 2022.
Separately, the Dow Jones Transportation Average (+2.1%) had a standout day, not so much because of the drop in oil prices, but because of a standout performance by FedEx (FDX 229.95, +28.97, +14.4%), which rallied after announcing three, new independent directors and a 53% increase in its quarterly dividend to $1.15 per common share.
The main laggards of note today were the utilities (-2.6%), consumer staples (-1.3%), health care (-1.1%), real estate (-1.0%), and financial (-0.9%) sectors. These sectors sport some of the highest dividend yields, but with yields rising as sharply as they have in risk-free Treasuries, they presumably saw some defections from income-oriented investors.
The May PPI report was released before the open. It was not as bad as feared, but it still wasn't good with total PPI up 10.8% year-over-year and core PPI, which excludes food and energy, up 8.3%.
Reviewing today's economic data:
- The May NFIB Small Business Optimism Index checked in at 93.1 versus 93.2 in April.
- The PPI for final demand increased 0.8% month-over-month in May (Briefing.com consensus 0.8%) following a downwardly revised 0.2% increase (from 0.5%) in April. The index for final demand, less foods and energy, rose 0.5% (Briefing.com consensus 0.6%) following a downwardly revised 0.2% increase (from 0.4%) in April. On a year-over-year basis, the PPI for final demand was up 10.8%, versus 10.9% in April, and the index for final demand, less foods and energy, was up 8.3%, versus 8.6% in April.
- The key takeaway from the report is the year-over-year moderation seen for both PPI for final demand and the index for final demand, less foods and energy. That is supportive of the peak inflation narrative, although the shadow of the disappointing May CPI report, and the bump seen in energy costs this month, should mitigate some of the enthusiasm for today's report.
Looking ahead, market participants will receive the weekly mortgage applications report (7:00 a.m. ET), the May Retail Sales Report (8:30 ET), May Import-Export Price Index (8:30 a.m. ET), June Empire State Manufacturing Survey (8:30 a.m. ET), April Business Inventories (10:00 a.m. ET), June NAHB Housing Market Index (10:00 a.m. ET), FOMC Rate Decision (2:00 p.m. ET), and April Net Long-Term TIC Flows (4:00 p.m. ET) on Wednesday. In addition, Fed Chair Powell will hold his press conference at 2:30 p.m. ET.
- Dow Jones Industrial Average: -16.5% YTD
- S&P 400: -19.6% YTD
- S&P 500: -21.6% YTD
- Russell 2000: -23.9% YTD
- Nasdaq Composite: -30.8% YTD
Dow Jones Transportation Average holds strength
14-Jun-22 15:30 ET
Dow -271.23 at 30245.51, Nasdaq -35.76 at 10773.46, S&P -29.02 at 3720.61
[BRIEFING.COM] The major indices have each continued their descent to new session lows. The biggest laggard heading into the close is the Dow Jones Industrial Average (-1.1%).
One area that has maintained relative strength for the entirety of the session is the Dow Jones Transportation Average (+1.5%), though the average is trading at its session low. The DJTA has enjoyed positive territory due in large part to FedEx (FDX 227.67, +26.67, +13.2%) gaining big today despite most stocks taking a hit.
The biggest laggard are the airlines, three of which reached new 52-week lows. JetBlue (JBLU 8.32, -0.13, -1.5%), Southwest (LUV 36.50, -1.12, -3.0%), and Alaska Air (ALK 39.98, -0.96, -2.4%) are all exhibiting decent losses. Notably, the Global Jets ETF (JETS) reached a new 52-week low as well, down 2.4%.
Separately, all 11 of the S&P 500 sectors are trading in negative territory entering the last half hour.
Only one S&P 500 sector in the green
14-Jun-22 15:00 ET
Dow -258.84 at 30257.90, Nasdaq -17.66 at 10791.56, S&P -28.70 at 3720.93
[BRIEFING.COM] The S&P 500 (-0.7%) and the Dow Jones Industrial Average (-0.8%) reached new intraday lows in recent action. The Nasdaq (-0.1%) has been well off session lows most of the day but has been trending downward in the last half hour.
The growth stocks are showing some relative strength over the value stocks currently as evidenced by the Russell 3000 Growth Index (+0.1%) outperforming the Russell 3000 Value Index (-0.8%). This fits the narrative that the market might be trying to rebound from an oversold condition as the growth stocks have been some of the hardest hit recently.
Only one of the 11 S&P 500 sectors trades in the green now. The information technology sector (+0.4%) is being helped out by its biggest outperformer, Oracle (ORCL 70.18, +6.13, +9.5%). Notably, the energy sector (-0.4%), which was up as much as 3.2% earlier today, has turned negative in conjunction with a downturn in oil prices ($118.28, -2.65, -2.2%), which topped $123.00/bbl earlier in the session.
Pool Corp. underperforms on cautious Jefferies comments; CHRW gains after M&A chatter for unit
14-Jun-22 14:30 ET
Dow -183.44 at 30333.30, Nasdaq +25.76 at 10834.98, S&P -15.59 at 3734.04
[BRIEFING.COM] The S&P 500 (-0.42%) sits firmly in second place to this point on Tuesday, having moved mostly sideways in the last half hour.
S&P 500 constituents Pool (POOL 341.75, -27.12, -7.35%), Expedia Group (EXPE 101.43, -4.83, -4.55%), and Viatris (VTRS 10.26, -0.51, -4.74%) pepper the bottom of the index. POOL underperforms today following cautious comments from Jefferies, while VTRS caught a Sell initiation out of UBS overnight.
Meanwhile, Minnesota-based freight firm C.H. Robinson (CHRW 106.84, +6.52, +6.50%) is one of today's top performers after reports of interest in its global forwarding business from rival DSV.
Gold slips as yields, dollar continue to bounce
14-Jun-22 14:00 ET
Dow -191.83 at 30324.91, Nasdaq +11.55 at 10820.77, S&P -15.79 at 3733.84
[BRIEFING.COM] A volatile hour leaves the major averages little changed after an upswing didn't hold, the tech-heavy Nasdaq Composite (+0.11%) still the only major average in positive territory.
Gold futures settled $18.30 lower (-1.0%) to $1,813.50/oz, their lowest close in more than a month, as dollar and bond yield gains apply pressure.
Meanwhile, the U.S. Dollar Index is up about +0.3% to $105.38.
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