Market Snapshot
briefing.com
| Dow | 30968.02 | -129.44 | (-0.42%) | | Nasdaq | 11322.22 | +194.39 | (1.75%) | | SP 500 | 3831.42 | +6.06 | (0.16%) | | 10-yr Note |
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| | NYSE | Adv 1424 | Dec 1833 | Vol 1.21 bln | | Nasdaq | Adv 2716 | Dec 1954 | Vol 4.96 bln |
Industry Watch
| Strong: Consumer Discretionary, Communication Services, Information Technology |
| | Weak: Materials, Industrials, Real Estate, Financials, Energy, Utilities, Health Care, Consumer Staples |
Moving the Market
-- Worries about potential recession
-- euro falls to 20-year low against the dollar
-- Large drop in commodity prices, particularly oil and gas
-- Leadership from mega-cap stocks
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Closing Summary
05-Jul-22 16:15 ET
Dow -129.44 at 30968.02, Nasdaq +194.39 at 11322.22, S&P +6.06 at 3831.42
[BRIEFING.COM] The stock market had growth concerns on its mind when it started today's session. When it ended today's session, it was wrapped up more in a feeling of inflation relief. Still, it was impossible to put a bow on that package, because the inflation relief was borne out of an expectation that global economic growth is going to weaken appreciably.
Nevertheless, things looked a lot better at the close than they did shortly after the open. At their lows of the morning, the Dow, Nasdaq, and S&P 500 were down 2.4%, 1.9%, and 2.2%, respectively. The Nasdaq would ultimately close up 1.8%, bolstered by strength in the mega-cap components. The S&P 500, meanwhile, eked out a 0.2% gain while the Dow Jones Industrial Average settled with a modest 0.4% decline.
The turnaround effort began right about the time European markets closed. Most bourses were saddled with large losses pushing 3.00% as recession worries took root in conjunction with the euro falling to a 20-year low against the dollar. EUR/USD traded down to 1.0235, bringing it close to parity with the greenback, but stood at 1.0267 (-1.5%) as of this writing.
That weakness bled into the U.S. market, sinking the cyclical stocks in the early stages of trading. Everything went lower, however, evidenced by an advance-decline line at the NYSE that favored decliners by a better than 6-to-1 margin. By the close, decliners led by a 9-to-7 margin.
The growth concerns were apparent in the underperformance of the cyclical stocks, yet they were most acute in the behavior of the Treasury and commodity markets.
The 2s10s spread inverted by a basis point. The 2-yr note yield settled its session down a basis point at 2.82% and the 10-yr note yield settled its session down eight basis points at 2.81%. Separately, WTI crude futures plummeted 8.1% to $99.34/bbl, unleaded gasoline futures dropped 9.0% to $3.34/gal, and copper futures fell 5.6% to $3.42/lb.
That move in the energy complex undercut the S&P 500 energy sector (-4.0%), but it became a relief point for the broader market seeking some inflation relief. If nothing else, traders latched onto the commodity price breakdown as a turnaround catalyst.
Some will call attention to the drop in the 10-yr note yield as another relief point, but it would be remiss not to add that the 10-yr note yield was sitting around 2.81% when stocks sold off at the open. The implication is that the commodity price action was the principal driver of today's turnaround action.
The Dow, Nasdaq, and S&P 500 all closed pretty much at their highs for the day. The S&P 500 was paced by the communication services (+2.7%), consumer discretionary (+2.3%), and information technology (+1.2%) sectors, which were led by the likes of Alphabet (GOOG 2277.74, +96.12, +4.4%), Meta Platforms (META 168.19, +8.16, +5.1%), Amazon.com (AMZN 113.50, +3.94, +3.6%), and Apple (AAPL 141.56, +2.63, +1.9%).
Today's worst-performing sectors were energy (-4.0%), utilities (-3.4%), materials (-2.0%), and industrials (-1.5%).
The Vanguard Mega-Cap Growth ETF (MGK) ended the day up 1.8%, whereas the Invesco S&P 500 Equal Weight ETF (RSP) closed down 0.3%.
Reviewing today's economic data:
- Factory orders for manufactured goods increased 1.6% m/m in May (Briefing.com consensus +0.5%) following an upwardly revised 0.7% increase (from 0.3%) in April. Shipments of manufactured goods rose 1.8% after increasing 0.6% in April.
- The key takeaway from the report is the understanding that order activity was much stronger than expected in May; however, the market isn't responding to that consideration so much as it is responding to the notion that order activity is apt to weaken in coming months as global economic activity slows.
Looking ahead, market participants will be focused on the May Jolts - Job Openings and June ISM Non-Manufacturing Index reports at 10:00 a.m. ET on Wednesday along with the release of the minutes for the June 14-15 FOMC meeting at 2:00 p.m. ET.
- Dow Jones Industrial Average: -14.8% YTD
- S&P 400: -19.4% YTD
- S&P 500: -19.6% YTD
- Russell 2000: -22.5% YTD
- Nasdaq Composite: -27.6% YTD
A pretty good recovery effort
05-Jul-22 15:30 ET
Dow -198.84 at 30898.62, Nasdaq +160.80 at 11288.63, S&P -3.24 at 3822.12
[BRIEFING.COM] Things could be better for the stock market, but they were a lot worse earlier, which is why the current standing of the major indices feels pretty good.
Shortly after today's open, the Dow, Nasdaq, and S&P 500 were down 2.4%, 1.9%, and 2.2%, respectively, as recession fears took hold. However, once European markets closed, a rebound effort took broader shape with short-covering activity likely helping in the turnaround.
Still, the big drop in energy prices will get most of the attribution for the recovery tailwind (note: the opening losses came with Treasury yields close to their current levels), as that has been greeted as a source of needed inflation relief. WTI crude futures settled down 8.1% at $99.34/bbl. The added connection is that it could compel the Fed to be less aggressive with its rate hikes in coming months if the trend persists.
Tomorrow's economic calendar will feature the ISM Non-Manufacturing Index for June (Briefing.com consensus 54.2%; prior 55.9%) and the JOLTS - Job Openings Report for May (Prior 11.400 mln) at 10:00 a.m. ET. Additionally, the minutes for the June 14-15 FOMC meeting will be released at 2:00 p.m. ET.
Buyers involved again
05-Jul-22 15:00 ET
Dow -275.73 at 30821.73, Nasdaq +140.58 at 11268.41, S&P -11.55 at 3813.81
[BRIEFING.COM] The major indices are mixed, but stress levels have been cut back considerably since this morning's lows. That's because buyers showed up after looking like they would be content to stay on holiday.
An advance-decline line that favored decliners at the NYSE by a better than 6-to-1 margin has improved noticeably. Decliners still lead, but the margin is less than 2-to-1.
Accordingly, losses remain broad based, only the losses are not as significant as they were earlier. The Invesco S&P 500 Equal Weight ETF (RSP) is down 0.8% after being down 2.5%. In turn, the mega-cap stocks have continued to strengthen throughout the day, which has helped the major indices tremendously.
The Vanguard Mega-Cap Growth ETF (MGK) is up 1.4%. The only three S&P 500 sectors in positive territory -- communication services (+2.3%), consumer discretionary (+1.8%), and information technology (+0.8%) -- all house mega-cap components.
Commodity names smacked in S&P 500; Etsy outperforms, paring 1H losses
05-Jul-22 14:25 ET
Dow -400.60 at 30696.86, Nasdaq +79.72 at 11207.55, S&P -28.46 at 3796.90
[BRIEFING.COM] The S&P 500 (-0.74%) is firmly in second place on Tuesday afternoon.
S&P 500 constituents Halliburton (HAL 28.48, -2.95, -9.39%), ConocoPhillips (COP 83.71, -7.27, -7.99%), and Archer-Daniels (ADM 71.99, -4.42, -5.78%) pepper the bottom of today's standings. HAL, COP, and ADM are pressured today alongside widespread losses in commodity exposed names.
Meanwhile, internet retail company Etsy (ETSY 87.17, +7.36, +9.22%) is today's top gain getter, higher alongside other beaten-down tech and retail names.
Gold slips to lowest levels of 2022 as dollar surges
05-Jul-22 14:00 ET
Dow -487.72 at 30609.74, Nasdaq +52.10 at 11179.93, S&P -40.01 at 3785.35
[BRIEFING.COM] With about two hours to go on Tuesday the tech-heavy Nasdaq Composite (+0.47%) stands atop the major averages, having topped session highs in the last half hour.
Gold futures settled $37.60 lower (-2.1%) to 1,763.90/oz, pressured by a surging dollar.
Meanwhile, the U.S. Dollar Index is up about +1.5% to $106.66.
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