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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (84159)

11/5/2019 5:28:12 PM

From: Return to Sender

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Stock market takes breather, Treasury yields rise
05-Nov-19 16:15 ET

Dow +30.52 at 27492.67, Nasdaq +1.48 at 8434.68, S&P -3.65 at 3074.62

briefing.com

[BRIEFING.COM] The S&P 500 shed 0.1% on Tuesday in a mixed session that saw more trade headlines and a further increase in Treasury yields. The Dow Jones Industrial Average (+0.1%), Nasdaq Composite (+0.01%), and Russell 2000 (+0.1%) finished just above their flat lines.

Reports indicated that the U.S. is considering removing the 15% tariff rate that went into effect in September and could possibly delay the tariffs in place for December. China, however, reiterated it would want the U.S. to remove all retaliatory tariffs imposed since last year and for the U.S. to be firmer in its commitments to remove them.

It's a tough ask, but the market presumably understood that negotiations are ongoing and it shouldn't conclude that a "Phase One" deal won't get signed based on these reports. The improved outlook on growth, then, continued to play out in the market, especially after the ISM Non-Manufacturing Index for October increased to 54.7% (Briefing.com consensus 53.3%) from 52.6% in September.

U.S. Treasuries continued to retreat after the report, which sent yields higher in a curve-steepening trade that contributed to the outperformance of the S&P 500 financials sector (+0.4%). The energy sector (+0.5%) was today's leader, while the defensive-oriented real estate (-1.8%), utilities (-1.0%), and health care (-0.9%) sectors posted sizable losses.

The 2-yr yield rose four basis points to 1.63%, and the 10-yr yield rose eight basis points to 1.87%. The U.S. Dollar Index increased 0.4% to 97.94. WTI crude rose 1.0%, or $0.55, to $57.24/bbl.

Walgreens Boots Alliance (WBA 61.21, +1.56, +2.6%) and Kroger (KR 27.83, +2.84, +11.4%) were some notable gainers in the consumer staples sector (+0.3%). Walgreens held preliminary discussions with private equity firms about a leveraged buyout, according to Reuters, while Kroger issued upbeat FY20 guidance following an encouraging update on its "Restock Kroger" initiative.

Adobe Systems (ADBE 289.29, +11.79, +4.3%) also provided shareholders with upbeat FY20 guidance. Shares rose accordingly, while shares of Uber (UBER 28.02, -3.06, -9.9%) and Peloton (PTON 22.74, -1.87, -7.6%) dropped despite better-than-expected results and decent guidance. Shake Shack (SHAK 66.83, -17.38, -20.6%) plunged 21% on disappointing guidance.

Reviewing Tuesday's economic data, which included the ISM Non-Manufacturing Index for October, the Trade Balance report for September, and the JOLTS - Job Openings survey for September:

The ISM Non-Manufacturing Index for October increased to 54.7% (Briefing.com consensus 53.3%) from 52.6% in September.
- The key takeaway from the report is that it reflects an acceleration of expansion-based activity in October, which is a supportive consideration since the non-manufacturing sector accounts for a significantly larger slice of U.S. economic activity than the manufacturing sector does.
The U.S trade deficit narrowed slightly in September to $52.5 billion, as expected, from a downwardly revised $55.0 billion (from -$54.9 billion) in August.
- The key takeaway from the report is that it wasn't a narrowing driven necessarily by stronger demand. On the contrary, imports (-$4.4 billion) and exports (-$1.8 billion) both declined month-over-month, so the narrowing was simply a function of imports falling more than exports.
The September Job Openings and Labor Turnover Survey showed that job openings declined to 7.024 million from a revised 7.301 million in August (from 7.051 million).

Looking ahead, investors will receive preliminary Q3 numbers for Productivity and Unit Labor Costs and the weekly MBA Mortgage Applications Index on Wednesday.

Nasdaq Composite +27.1% YTD
S&P 500 +22.7% YTD
Russell 2000 +18.6% YTD
Dow Jones Industrial Average +17.9% YTD

Market Snapshot

Dow	27492.67	+30.52	(0.11%)
Nasdaq	8434.68	+1.48	(0.02%)
SP 500	3074.62	-3.65	(-0.12%)
10-yr Note	-29/32	1.859

NYSE	Adv 1321	Dec 1551	Vol 988.8 mln
Nasdaq	Adv 1635	Dec 1465	Vol 2.1 bln

Industry Watch

Strong: Energy, Financials, Consumer Staples, Materials

Weak: Real Estate, Utilities, Health Care

Moving the Market

-- Stock market takes breather and closes little changed

-- ISM Non-Manufacturing Index for October increased more than expected

-- U.S. is reportedly considering removing 15% tariff rate imposed on Chinese imports in September and could possibly delay tariffs in December; China wants more tariffs removed

-- Treasury yields rise in curve-steepening trade