Stocks boosted by dovish Fed comments
29-Jul-20 16:20 ET
Dow +160.29 at 26539.57, Nasdaq +140.85 at 10543.02, S&P +40.00 at 3258.44
briefing.com
[BRIEFING.COM] The S&P 500 rallied 1.2% on Wednesday, as investors were pleased with the Fed's latest policy directive and were unconcerned by the House Judiciary Committee's antitrust hearing. The Nasdaq Composite rose 1.4%, and the Russell 2000 rose 2.1%. The Dow Jones Industrial Average underperformed with a 0.6% gain.
It was a steady and broad-based advance that lifted all 11 S&P 500 sectors into positive territory, including seven that rose at least 1.0%. The energy (+2.1%) and financials (+2.0%) sectors advanced the most with 2% gains, while the consumer staples sector lagged with a 0.2% gain.
A bulk of today's gains came prior to the start of the antitrust hearing and the Fed's unanimous decision to leave rates unchanged. The market pushed higher as soon as Fed Chair Powell began his press conference at 2:30 p.m. ET, liking his comment that the Fed is "not even thinking about thinking about thinking about raising rates." (Yes, Mr. Powell said "thinking" three times).
Note, the CEOs of Apple (AAPL 380.16, +7.15, +1.9%), Amazon (AMZN 3033.53, +33.20, +1.1%), Alphabet (GOOG 1522.02, +21.68, +1.5%), and Facebook (FB 233.29, +3.17, +1.4%) were still testifying before the House Judiciary Committee when the market closed for trading. While many lawmakers expressed serious concern about their business practices, shareholders kept their composure.
Earnings remained mixed, but notable standouts included Advanced Micro Devices (AMD 76.09, +8.48, +12.5%), Shopify (SHOP 1053.59, +68.59, +7.0%), and Starbucks (SBUX 77.42, +2.78, +3.7%). Dow component Visa (V 198.58, +1.84, +0.9%) overcame a negative start following its positive report.
On the downside, Boeing (BA 166.00, -4.84, -2.8%) and General Electric (GE 6.59, -0.30, -4.4%) closed sharply lower following their earnings reports. Boeing also said it expects to cut 19,000 jobs and estimated it will take around three years for travel to return to 2019 levels, which weighed on the airline stocks.
U.S. Treasuries edged higher after the release of the July FOMC statement, but the moves were minuscule. The 2-yr yield declined one basis point to 0.13%, and the 10-yr yield was flat at 0.58%. The U.S. Dollar Index fell another 0.4% to 93.35. WTI crude futures gained 0.6%, or $0.23, to $41.27/bbl.
Reviewing Wednesday's economic data:
- Pending home sales increased 16.6% in June (Briefing.com consensus +17.0%) after surging an unrevised 44.3% in May.
- The advance international trade in goods deficit totaled $70.6 bln in June following a $75.3 bln deficit in May. Advance retail inventories declined 2.6% in June after decreasing 6.2% in May. Advance wholesale inventories declined 2.0% in June after decreasing 1.2% in May.
- The weekly MBA Mortgage Applications Index declined 0.8% following a 4.1% increase in the prior week.
Looking ahead, investors will receive the advance estimate for Q2 GDP and the weekly Initial and Continuing Claims report on Thursday.
- Nasdaq Composite +17.5% YTD
- S&P 500 +0.9% YTD
- Dow Jones Industrial Average -7.0% YTD
- Russell 2000 -10.1% YTD
Market Snapshot
| Dow | 26539.57 | +160.29 | (0.61%) | | Nasdaq | 10543.02 | +140.85 | (1.35%) | | SP 500 | 3258.44 | +40.00 | (1.24%) | | 10-yr Note | +1/32 | 0.569 |
|
| | NYSE | Adv 2387 | Dec 574 | Vol 861.0 mln | | Nasdaq | Adv 2176 | Dec 1084 | Vol 3.9 bln |
Industry Watch
| Strong: Financials, Energy, Real Estate, Information Technology |
| | Weak: Utilities, Consumer Staples |
Moving the Market
-- Stock market closes higher in broad-based advance
-- Fed kept rates unchanged as expected, Fed Chair Powell reiterated dovish policy stance
-- House Judiciary Committee held antitrust hearing, but shareholders did not show concern
-- Mixed earnings
|
WTI crude gains amid equity rally
29-Jul-20 15:25 ET
Dow +182.56 at 26561.84, Nasdaq +147.12 at 10549.29, S&P +42.11 at 3260.55
[BRIEFING.COM] The S&P 500 is trading at fresh session highs with a 1.3% gain, while the Russell 2000 outperforms with a 1.8% gain.
One last look at the S&P 500 sectors shows green across the board, with nine sectors up at least 1.0%. The financials sector is up the most with a 1.9% gain, while the utilities sector is up the least with a 0.3% gain.
WTI crude futures settled higher by 0.6%, or $0.23, to $41.27/bbl. |
