New highs for the Nasdaq ahead of Thanksgiving
25-Nov-20 16:10 ET
briefing.com
Dow -173.77 at 29872.41, Nasdaq +57.62 at 12094.32, S&P -5.76 at 3629.67
[BRIEFING.COM] The Nasdaq Composite (+0.5%) set intraday and closing highs on Wednesday, while the S&P 500 (-0.2%), Dow Jones Industrial Average (-0.6%), and Russell 2000 (-0.5%) edged lower from record territory.
Notwithstanding the Nasdaq's performance, today was a digestion kind-of-day for the broader market following a stretch of heroic gains this month. Granted, the S&P 500 energy (-2.4%) and materials (-1.1%) sectors did succumb to minor profit-taking interest, but overall, losses were kept in check.
Investors took defensive positions in mega-cap stocks like Apple (AAPL 116.03, +0.86, +0.8%) and Amazon (AMZN 3185.07, +67.01, +2.2%), which lifted the information technology (+0.2%) and consumer discretionary (+0.6%) sectors, and more conservative stocks like those in the real estate (+0.2%) and utilities (+0.1%) sectors.
Among the data that was dumped to investors before Thanksgiving Day, two reports stood out: weekly initial claims were higher than expected at 778,000 (Briefing.com consensus 735,000), and the pace of October new home sales was better than expected at 999,000 units (Briefing.com consensus 977,000).
Separately, the FOMC Minutes for the November meeting indicated that participants were debating ways to enhance guidance for asset purchases. The current pace of purchases remained appropriate.
In corporate news, The Wall Street Journal reported that Salesforce (CRM 246.82, -14.02, -5.4%) has been in talks to acquire Slack (WORK 40.70, +11.12, +37.6%), which sent CRM shares down 5% and WORK shares up 38%. Gap (GPS 21.60, -5.27, -19.6%) shares plunged 20% following its earnings report.
U.S. Treasuries finished little changed in a lackluster session. The 2-yr yield was flat at 0.16%, and the 10-yr yield was flat at 0.88%. The U.S. Dollar Index decreased 0.3% to 91.96. WTI crude futures rose 1.9%, or $0.83, to $45.72/bbl.
Reviewing Wednesday's data dump:
- Initial claims for the week ending Nov. 21 increased by 30,000 to 778,000 (Briefing.com consensus 735,000). Continuing claims for the week ending Nov. 14 decreased by 299,000 to 6.071 million.
- The key takeaway from the report is the increase in initial jobless claims, as it is a reflection of the renewed challenges for the labor market that have been triggered by the surge in coronavirus cases and efforts/restrictions to contain the spread.
- New home sales decreased 0.3% m/m to 999,000 in October (Briefing.com consensus 977,000) from an upwardly revised 1.002 million (from 959,000) in September.
- The key takeaway from the report is that demand for new homes is strong and inventory is limited, which is pushing up prices that could turn into a headwind for future sales as affordability factors come into play.
- Personal income declined 0.7% m/m in October (Briefing.com consensus 0.0%) following a downwardly revised 0.7% increase (from 0.9%) in September. Personal spending rose 0.5% (Briefing.com consensus 0.3%) following a downwardly revised 1.2% increase (from 1.4%) in September. The PCE Price Index was unchanged, as was the core CPE Price Index, which excludes food and energy. Economists surveyed by Briefing.com expected a 0.1% m/m increase in the core PCE price Index.
- The key takeaway from the report is that income dropped as personal current transfer receipts declined 6.2%; moreover, this was an interest rate friendly report given the yr/yr deceleration in the price indices.
- Total durable orders increased 1.3% in October (Briefing.com consensus 0.8%) following an upwardly revised 2.1% increase (from 1.9%) in September. Excluding transportation, durable orders were also up 1.3% m/m (Briefing.com consensus 0.4%) on top of a revised 1.5% increase (from 0.8%).
- The key takeaway from the report is that it provides a positive input for Q4 GDP forecasts as shipments of nondefense capital goods, excluding aircraft, increased a healthy 2.3% following a 0.7% increase in September.
- Q3 GDP was unchanged at 33.1% with the second estimate (Briefing.com consensus 33.1%). The GDP Price Deflator was also unchanged at 3.6% (Briefing.com consensus 3.6%).
- The key takeaway from the report is that it is seen as being too dated (we're nearly 2/3 of the way through Q4) to have any market-moving impact.
- The final University of Michigan Index of Consumer Sentiment for November dipped to 76.9 (Briefing.com consensus 77.0) from the preliminary reading of 77.0. The Index stood at 96.8 a year ago.
- The key takeaway from the report is that the lack of a significant shift in the headline number masked another downtick in future expectations.
- Advance International Trade in Goods deficit widened to $80.3 billion in October (prior -$79.4 billion); Advance Retail Inventories increased 0.8% (prior revised to 1.7% from 1.6%); and Advance Wholesale Inventories increased 0.9% (prior revised to 0.7% from 0.4%)
Looking ahead, there will be no economic data released on Friday. The market will be closed for Thanksgiving Day on Thursday.
- Nasdaq Composite +34.8% YTD
- S&P 500 +12.4% YTD
- Russell 2000 +10.6% YTD
- Dow Jones Industrial Average +4.7% YTD
Market Snapshot
| Dow | 29872.41 | -173.77 | (-0.58%) | | Nasdaq | 12094.32 | +57.62 | (0.48%) | | SP 500 | 3629.67 | -5.76 | (-0.16%) | | 10-yr Note | 0/32 | 0.882 |
|
| | NYSE | Adv 1313 | Dec 1743 | Vol 966.0 mln | | Nasdaq | Adv 1724 | Dec 1781 | Vol 4.4 bln |
Industry Watch
| Strong: Consumer Discretionary, Information Technology, Real Estate, Utilities |
| | Weak: Energy, Materials, Industrials |
Moving the Market
-- Nasdaq sets intraday and closing highs, while other major indices edged lower from record territory
-- Digestion kind-of-day, relative strength in the mega-caps
-- Mixed economic data
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WTI crude futures rise above $45 per barrel
25-Nov-20 15:30 ET
Dow -170.76 at 29875.42, Nasdaq +68.14 at 12104.84, S&P -3.65 at 3631.78
[BRIEFING.COM] The S&P 500 is down 0.1%. Any positive finish would be good for a record close.
One last look at the S&P 500 sectors shows eight trading lower and three trading higher. The energy sector is down the most with a 1.8% decline, but that's nothing when taking into account its 36.2% monthly gain. The materials sector is down 1.0%, while the consumer discretionary sector outperforms with a 0.7% gain.
WTI crude futures settled higher by 1.9%, or $0.83, to $45.72/bbl. |
