Market Snapshot
briefing.com
| Dow | 34464.64 | +141.59 | (0.41%) | | Nasdaq | 13736.30 | -1.72 | (-0.01%) | | SP 500 | 4200.88 | +4.89 | (0.12%) | | 10-yr Note | -2/32 | 1.599 |
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| | NYSE | Adv 2054 | Dec 1195 | Vol 1.9 bln | | Nasdaq | Adv 2762 | Dec 1431 | Vol 5.0 bln |
Industry Watch
| Strong: Financials, Industrials, Materials |
| | Weak: Information Technology, Utilities, Consumer Staples, Health Care, Real Estate |
Moving the Market
-- Republicans confirm $928 billion infrastructure counteroffer, President Biden will reportedly propose a $6 trillion budget for FY22
-- Encouraging weekly jobless claims data
-- 10-yr yield moved higher
-- Consolidation activity in large-caps and rebalancing activity into smaller stocks
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Another good day for cyclical and smaller stocks
27-May-21 16:15 ET
Dow +141.59 at 34464.64, Nasdaq -1.72 at 13736.30, S&P +4.89 at 4200.88
[BRIEFING.COM] The large-cap indices closed mixed and little changed on Thursday, as investors digested the latest government-spending headlines and continued to focus their buying efforts on cyclical sectors and smaller stocks. The S&P 500 increased 0.1% and closed at the 4200 level.
The Dow Jones Industrial Average (+0.4%) slightly outperformed, while the Nasdaq Composite (-0.01%) closed fractionally lower. The Russell 2000 (+1.1%) and iShares Micro-Cap ETF (IWC 150.49, +2.63, +1.8%) rose more than 1.0% for the second straight day.
Briefly, Senate Republicans confirmed a $928 billion infrastructure counteroffer to the Biden administration's $1.7 trillion American Jobs Plan while reports indicated that President Biden will propose a $6 trillion budget for FY22, which would include both the American Jobs Plan and American Families Plan.
Both sides expressed concerns about each other's plans, but the headlines served as a reminder that additional stimulus is likely coming. This acknowledgement, coupled with an encouraging report on weekly initial jobless claims, boded well for economically-sensitive sectors and negatively for longer-dated Treasuries. The 10-yr yield rose four basis points to 1.61%.
The S&P 500 industrials (+1.4%), financials (+1.2%), and materials (+0.7%) sectors posted decent gains. On the downside, the defensive-oriented information technology (-0.5%), utilities (-0.7%), consumer staples (-0.6%), real estate (-0.2%), and health care (-0.2%) sectors closed lower.
The underperformance of the technology sector presumably had more to do with the uptick in long-term interest rates (i.e., valuation-oriented weakness), while the declines in the other sectors seemed to be a byproduct of investors preferring riskier stocks in the small-cap and micro-cap domains.
AMC Entertainment (AMC 26.52, +6.96, +35.6%) surged 36% on no news, bringing its market capitalization to about $12 billion after starting the year below $1 billion. In the mega-cap domain, NVIDIA (NVDA 619.52, -8.49, -1.4%) exceeded earnings expectations and provided upbeat guidance, but shares closed lower.
The 2-yr yield was unchanged at 0.14%. The U.S. Dollar Index declined 0.1% to 89.98. WTI crude futures increased 1.0%, or $0.65, to $66.86/bbl.
Reviewing Thursday's economic data:
- Initial jobless claims for the week ending May 22 decreased by 38,000 to 406,000 (Briefing.com consensus 425,000), marking the lowest claims level since March 14, 2020. Continuing claims for the week ending May 15 decreased by 96,000 to 3.642 million.
- The key takeaway from the report remains the same: initial jobless claims are still too high in absolute terms, but continue to trend in a direction that supports favorable reopening-minded views.
- Durable Goods Orders for April decreased 1.3% month-over-month (Briefing.com consensus +0.8%) following an upwardly revised 1.3% increase (from +0.5%) in March. Excluding transportation, orders rose 1.0% (Briefing.com consensus +0.7%) following an upwardly revised 3.2% increase (from +1.6%) in March.
- The key takeaway from the report is that it revealed solid levels of business spending despite a 6.2% decline in orders for motor vehicles and parts that was related to the semiconductor supply shortage. To wit, nondefense capital goods orders, excluding aircraft, jumped 2.3% month-over-month.
- The second estimate for Q1 GDP was unchanged from the advance estimate of 6.4% (Briefing.com consensus 6.4%). The GDP Price Deflator was bumped up to 4.3% (Briefing.com consensus 4.1%) from the advance estimate of 4.1%.
- The key takeaway from the report is that it is an affirmation of the strong growth that has been facilitated by massive stimulus spending and Covid vaccines that have led to increased reopening activity; however, the dated aspect of the report should curtail its influence as a market mover.
- Just in, pending home sales decreased 4.4% m/m in April (Briefing.com consensus +1.5%) following a 1.9% increase in March.
Looking ahead to Friday, investors will receive Personal Income and Spending for April, the final University of Michigan Index of Consumer Sentiment for May, the Chicago PMI for May, and Advance International Trade in Goods, Retail Inventories, and Wholesale Inventories for April.
- Russell 2000 +15.1% YTD
- Dow Jones Industrial Average +12.6% YTD
- S&P 500 +11.8% YTD
- Nasdaq Composite +6.6% YTD
Risker stocks outperforming again
27-May-21 15:30 ET
Dow +113.49 at 34436.54, Nasdaq +0.49 at 13738.51, S&P +4.62 at 4200.61
[BRIEFING.COM] The S&P 500 is up 0.1% while the Russell 2000 is up 1.1% and the iShares Micro-Cap ETF (IWC 149.59, +1.73, +1.2%) is up 1.2%. This is the second straight day that "riskier" stocks are outperforming. AMC Entertainment (AMC 28.46, +8.89, +45.3%) is up 45% in a short-squeeze.
One last look at the S&P 500 sectors shows industrials (+1.4%), financials (+0.8%), and materials (+0.7%) still outperforming in negative territory, while the defensive-oriented information technology (-0.4%), consumer staples (-0.4%), utilities (-0.3%), and health care (-0.2%) sectors underperform in negative territory.
WTI crude futures settled higher by 1.0%, or $0.65, to $66.86/bbl. |
