Market Snapshot
briefing.com
| Dow | 36157.58 | +104.95 | (0.29%) | | Nasdaq | 15811.58 | +161.98 | (1.04%) | | SP 500 | 4660.57 | +29.92 | (0.65%) | | 10-yr Note | +1/32 | 1.557 |
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| | NYSE | Adv 2157 | Dec 1098 | Vol 908.3 mln | | Nasdaq | Adv 3009 | Dec 1475 | Vol 5.2 bln |
Industry Watch
| Strong: Consumer Discretionary, Materials |
| | Weak: Industrials, Information Technology, Health Care |
Moving the Market
-- Market notches fresh record highs
-- Fed keeps rates unchanged and announces taper plan
-- Fed Chair Powell talks down rake-hike questions
-- Service-sector activity accelerates in October
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Market closes at record highs following Fed decision
03-Nov-21 16:20 ET
Dow +104.95 at 36157.58, Nasdaq +161.98 at 15811.58, S&P +29.92 at 4660.57
[BRIEFING.COM] Each of the major indices set intraday and closing record highs on Wednesday, as the market reacted positively to the Fed's taper announcement and Fed Chair Powell's press conference. The Russell 2000 was the biggest winner with a 1.8% gain, followed by the Nasdaq Composite (+1.0%), S&P 500 (+0.7%), and Dow Jones Industrial Average (+0.3%).
Eight of the 11 S&P 500 sectors closed higher, led by the consumer discretionary (+1.8%) and materials (+1.1%) sectors with gains over 1.0%. The energy (-0.8%), utilities (-0.3%), and industrials (-0.2%) sectors closed lower. Small-caps were strong all day, and the larger stocks gained traction following the Fed's policy decision.
As expected, the Fed left the target range for the fed funds rate near zero and said it would reduce net asset purchases by a total of $15 billion this month ($10 billion for Treasury securities and $5 billion for agency mortgage-backed securities). The central bank went one step further and said it would taper by another $15 billion in December.
Fed Chair Powell talked down rate-hike questions with an observation that it'll still take some time to reach maximum employment (perhaps by the second half of 2022) and that inflation should be less of an issue by the second or third quarters of next year. He emphasized that policy will be adaptive to the data.
The 2-yr yield, which is sensitive to expectations surrounding the fed funds rate, settled two basis points higher at 0.46% after hitting 0.51% during the start of Mr. Powell's press conference. The 10-yr yield settled three basis points higher at 1.58%. The U.S. Dollar Index fell 0.2% to 93.90.
Prior to the Fed, the market was drawing support from several factors: 1) the October ISM Non-Manufacturing Index, the October ADP Employment Change report, and Factory Orders for September each exceeded expectations, 2) oil prices ($80.81/bbl, -3.05, -3.6%) continued to cool off, and 3) a lot of companies continued to beat EPS estimates.
T-Mobile US (TMUS 121.94, +6.14, +5.3%), CVS Health (CVS 96.34, +5.19, +5.7%), and Lyft (LYFT 49.03, +3.71, +8.2%) were some of the notable earnings winners. Activision Blizzard (ATVI 66.75, -10.92, -14.1%) and Zillow Group (ZG 65.86, -19.62, -23.0%), however, were two eyesores following their earnings reports.
Investors appeared on board with riding the market higher, with hedging interest continuing to decline. The CBOE Volatility Index (15.10, -0.93, -5.8%) closed near 15.00.
Reviewing Wednesday's economic data:
- The ISM Non-Manufacturing Index for October increased to a record high 66.7% (Briefing.com consensus 60.0%) from 61.9% in September. The dividing line between expansion and contraction is 50.0%. The October reading marks the 17th straight month of growth for the services sector.
- The key takeaway from the report is the acknowledgment that demand shows no signs of slowing and services sector activity is running at a record pace even with the constraints of labor shortages, logistics problems, and difficulty in obtaining materials.
- Factory orders for manufactured goods increased 0.2% m/m in September (Briefing.com consensus -0.1%) following a downwardly revised 1.0% increase (from 1.2%) in August. Shipments of manufactured goods were up 0.6% after increasing 0.1% in August.
- The key takeaway from the report is that the pace of order growth remained positive for nondefense capital goods, excluding aircraft -- a proxy for business spending -- demonstrating that manufacturing demand remained sturdy in spite of the pressures related to the Delta variant.
- The ADP Employment Change report estimated 571,000 jobs were added to private-sector payrolls in October (Briefing.com consensus 370,000). The increase in September was downwardly revised to 523,000 from 568,000.
- The IHS Markit Services PMI increased to 58.7 in the final reading for October from 58.2 in the preliminary reading and 54.9 in the final reading for September.
- The weekly MBA Mortgage Applications Index decreased 3.3% following a 0.3% increase in the prior week.
- Weekly crude oil inventories increased by 3.29 mln barrels after increasing by 4.27 mln barrels during the previous week.
Looking ahead, investors will receive weekly Initial and Continuing Claims, preliminary Productivity and Unit Labor Costs for the third quarter, and the Trade Balance for September on Thursday.
- S&P 500 +24.1% YTD
- Nasdaq Composite +22.7% YTD
- Russell 2000 +21.7% YTD
- Dow Jones Industrial Average +18.1% YTD
Crude futures settle sharply lower amid bearish data
03-Nov-21 15:30 ET
Dow +69.93 at 36122.56, Nasdaq +131.00 at 15780.60, S&P +23.11 at 4653.76
[BRIEFING.COM] The S&P 500 is up 0.5%, and the Russell 2000 is up 2.0%.
One last look at the sector performances shows consumer discretionary (+1.6%) and materials (+1.4%) sectors leading the advance with gains over 1.0%, while the energy (-0.6%), utilities (-0.7%), and industrials (-0.4%) sectors are the only sectors trading lower.
WTI crude futures settled sharply lower by by 3.6%, or $3.05, to $80.81/bbl amid bearish inventory data out of the EIA, which reported the fifth weekly build in six weeks. |
