Market Snapshot
briefing.com
| Dow | 36079.94 | -240.04 | (-0.66%) | | Nasdaq | 15622.70 | -263.84 | (-1.66%) | | SP 500 | 4646.71 | -38.54 | (-0.82%) | | 10-yr Note | -18/32 | 1.564 |
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| | NYSE | Adv 1036 | Dec 2252 | Vol 894.9 mln | | Nasdaq | Adv 1318 | Dec 3201 | Vol 5.2 bln |
Industry Watch
| Strong: Consumer Staples, Utilities, Health Care |
| | Weak: Information Technology, Energy, Communication Services |
Moving the Market
-- CPI data for October hotter than expected
-- Treasury yields across the curve rise noticeably
-- Expectations for Fed to hike rates in June 2022 increased to nearly 70%, according to the CME Fed Watch Tool
-- Huge Rivian (RIVN) IPO
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Hot CPI data cools off market
10-Nov-21 16:20 ET
Dow -240.04 at 36079.94, Nasdaq -263.84 at 15622.70, S&P -38.54 at 4646.71
[BRIEFING.COM] The S&P 500 fell 0.8% on Wednesday, as the market cooled off amid hot CPI data for October and a corresponding pop in Treasury yields. The Nasdaq Composite (-1.7%) and Russell 2000 (-1.6%) declined more than 1.5%, while the Dow Jones Industrial Average fell 0.7%.
The information technology (-1.7%), communication services (-1.3%), and energy (-3.0%) sectors were the weakest sectors in the S&P 500 with losses between 1-3%. The defensive-oriented utilities (+0.7%), health care (+0.3%), and consumer staples (+0.3%) sectors were the only sectors that closed higher.
Specifying the data, the Consumer Price Index report showed total CPI was up 0.9% m/m (Briefing.com consensus +0.6%) and up 6.2% yr/yr -- the largest 12-month increase since November 1990. Core CPI, which excludes food and energy, rose 0.6% m/m (Briefing.com consensus +0.4%) and was up 4.6% yr/yr.
The Treasury market, which was already sniffing a hot report in the wake of hot inflation data out of China and Germany, weakened further intraday on the prospect for the Fed to aggressively tighten policy next year. According to the CME Fed Watch Tool, the probability for a rate hike in June 2022 increased to 67.9%, versus 50.9% yesterday.
What's more, the $25 bln 30-yr bond auction saw weak demand in the afternoon, further contributing to the selling in Treasuries. The 2-yr yield settled higher by ten basis points to 0.50%, and the 10-yr yield settled higher by 13 points to 1.56%. WTI crude futures fell 3.5%, or $2.93, to $81.23/bbl amid bearish inventory data.
Note, the 10-yr yield remained below recent highs, so it was the speedy move that curtailed risk appetite, particularly for the growth stocks and other high-beta names. The Vanguard Mega Cap Growth ETF (MGK 254.95, -3.61) fell 1.4%, and the ARK Innovation ETF (ARKK 116.64, -3.93) fell 3.3%.
Elsewhere, the excess speculation emanating from the huge Rivian (RIVN 100.73, +22.73, +29.1%) IPO served as another excuse for investors to take profits, or at the very least step away from the market. RIVN closed below its opening price of $106.75 but still finished 29% above its IPO price.
Coinbase Global (COIN 328.60, -28.79, -8.1%) was a high-profile laggard, additionally pressured by disappointing earnings news and a fade in cryptocurrencies. DoorDash (DASH 214.24, +22.23, +11.6%) bucked the growth-stock trend with a nice gain following its earnings report.
Reviewing Wednesday's economic data:
- Total CPI jumped 0.9% month-over-month in October (Briefing.com consensus +0.6%) and was up 6.2% year-over-year. That was the largest 12-month increase since November 1990. Core CPI, which excludes food and energy, rose 0.6% month-over-month (Briefing.com consensus +0.4%) and was up 4.6% year-over-year, which the BLS said was the largest 12-month increase since August 1991.
- The key takeaway from the report -- aside from the roughly 30-year highs in total CPI and core CPI -- is the acknowledgment that most component indexes increased over the month, which reflects a broadening of the inflation pressures.
- Total jobless claims for the week ending November 6 decreased by 4,000 to 267,000 (Briefing.com consensus 265,000), which is the lowest since March 14, 2020. Continuing claims for the week ending October 30 increased by 59,000 to 2.160 million.
- The key takeaway from this report is the ongoing improvement in initial claims, which matches the corporate narrative that it has been difficult to find workers in a strong demand environment.
- The Treasury Budget saw a $165.1 bln deficit in October, versus a $284.1 bln deficit in the same period a year ago. The budget data is not seasonally adjusted, so the October deficit cannot be compared to the September deficit of $61.6 bln.
- October, which marks the start of the new fiscal year for the government, marked the 25th consecutive month that the Treasury has seen a budget deficit. The budget deficit over the last 12 months is $2.65 trln versus a deficit of $2.77 bln in September.
- Wholesale inventories increased 1.4% m/m in September (Briefing.com consensus 1.1%) following a 1.2% increase in the prior week.
- Weekly crude oil inventories increased by 1.00 mln barrels after increasing by 3.29 mln barrels during the previous week.
- The weekly MBA Mortgage Applications Index rose 5.5% following a 3.3% decline in the prior week.
There is no economic data scheduled for Thursday. As a reminder, the Treasury market will be closed tomorrow for Veterans Day.
- S&P 500 +23.7% YTD
- Nasdaq Composite +21.2% YTD
- Russell 2000 +21.0% YTD
- Dow Jones Industrial Average +17.9% YTD
Crude futures settle lower amid bearish data
10-Nov-21 15:30 ET
Dow -208.67 at 36111.31, Nasdaq -256.42 at 15630.12, S&P -36.25 at 4649.00
[BRIEFING.COM] The S&P 500 is down 0.8% to trade off prior lows. Eight of the 11 S&P 500 sectors are contributing to the decline.
The energy sector (-2.8%) is the weakest performer with a 2.8% decline, followed by the information technology (-1.6%) and communication services (-1.3%) sectors with losses over 1.0%. The utilities (+0.6%), health care (+0.3%), and consumer staples (+0.2%) sectors trade higher. |
