Market Snapshot
briefing.com
| Dow | 34725.47 | +564.69 | (1.65%) | | Nasdaq | 13770.57 | +417.79 | (3.13%) | | SP 500 | 4431.85 | +105.34 | (2.43%) | | 10-yr Note | +2/32 | 1.783 |
|
| | NYSE | Adv 2216 | Dec 1043 | Vol 1.1 bln | | Nasdaq | Adv 2807 | Dec 1487 | Vol 4.9 bln |
Industry Watch
| Strong: Information Technology, Communication Services, Real Estate |
| | Weak: Energy |
Moving the Market
-- Stocks surge into the close on no specific news
-- Apple (AAPL) and Visa (V) rally on better-than-expected earnings reports
-- Month-end rebalancing activity, bargain-hunting mindset, fear of missing out, lower interest rates
-- PCE inflation data was roughly in-line with expectations, remained elevated
|
Apple steers rebound rally
28-Jan-22 16:15 ET
Dow +564.69 at 34725.47, Nasdaq +417.79 at 13770.57, S&P +105.34 at 4431.85
[BRIEFING.COM] The S&P 500 rose 2.4% on Friday, overcoming an early 0.8% decline, as the market rallied into the close on no specific news while Apple (AAPL 170.33, +11.11, +7.0%) steered the effort following its better-than-expected earnings report. Shares of Apple rose 7%.
The Nasdaq Composite gained 3.1%, the Dow Jones Industrial Average gained 1.7%, and the Russell 2000 gained 1.9%.
Ten of the 11 S&P 500 sectors closed higher, paced by the information technology sector (+4.3%), which also featured a 10% earnings-driven gain in Visa (V 228.00, +21.85, +10.6%). The energy sector (-0.6%) was the lone exception, pressured by an EPS miss from Chevron (CVX 130.67, -4.70, -3.5%).
While Apple deserves credit today, it didn't have the level of pull on the market as some would have liked. At one point, declining issues were up by more than a 2:1 margin at the NYSE and Nasdaq, and even the technology sector slipped into negative territory amid early weakness in the semiconductor stocks.
That might have been due to underlying concerns about the Fed slowing down growth with tighter monetary policy, as well as more companies like Caterpillar (CAT 201.16, -11.01, -5.2%) and Western Digital (WDC 49.90, -3.94, -7.3%) drawing attention to higher costs and supply chain issues. In other words, Apple was more a company-specific event.
Nevertheless, the market held it together, further supported by month-end rebalancing activity, a bargain-hunting mindset, lower interest rates, a fear of missing out on further rebound gains. Treasury yields declined following the release of inflation reports that were roughly in-line with expectations.
Briefly, the PCE Price Index increased 0.4% m/m in December, as expected, and was up 5.8% yr/yr. The Q4 Employment Cost Index increased 1.0% (Briefing.com consensus 1.1%) following a 1.3% increase in the third quarter. Despite hope that inflation rates could soon ease, the PCE data still supported the Fed's case to be more assertive in tightening policy.
The 2-yr yield decreased two basis points to 1.17%, and the 10-yr yield decreased three basis points to 1.78%. The U.S. Dollar Index was little changed at 97.24. WTI crude futures increased just 0.1%, or $0.12, to $86.74/bbl.
Robinhood Markets (HOOD 12.73, +1.12, +9.7%), which was down 14% at the open on disappointing earnings news/guidance, turned around with the broader market and closed higher by 10% -- further exemplifying the volatile conditions in the market.
Interestingly, the S&P 500 closed three points below its 200-day moving average (4435).
Reviewing Friday's economic data:
- Personal income increased 0.3% month-over-month in December (Briefing.com consensus 0.5%) while personal spending declined 0.6% (Briefing.com consensus -0.6%). The PCE Price Index increased 0.4% month-over-month, as expected, and was up 5.8% year-over-year versus 5.7% in November. The core PCE Price Index jumped 0.5% (Briefing.com consensus 0.4%) and was up 4.9% year-over-year versus 4.7% in November.
- The key takeaway from the report is the recognition that the inflation rate in the Fed's preferred inflation gauge is still rising, which should of course mean that the target range for the fed funds rate should soon be doing the same.
- The final January reading for the University of Michigan Index of Consumer Sentiment dropped to 67.2 (Briefing.com consensus 68.5) from the preliminary reading of 68.8. The final December reading was 70.6. The January reading is the lowest level for the index since November 2012.
- The key takeaway from the report is that consumer sentiment is dropping as inflation pressures increase, raising concerns about falling real incomes that are apt to translate into lower levels of spending.
- The Q4 Employment Cost Index increased 1.0% (Briefing.com consensus 1.1%) for the three-month period ending in December 2021 following a 1.3% increase in the third quarter. Wages and salaries, which account for about 70% of compensation costs, increased 1.1%, while benefit costs, which make up the remainder of compensation costs, increased 0.9%.
- The key takeaway from the report is that wages and salaries for workers were up from the same period a year ago, yet those gains have increasingly been subsumed by inflation, evidenced by the 6.5% increase in the PCE Price Index seen in the advance Q4 GDP report.
Looking ahead, investors will receive the Chicago PMI for January on Monday.
- Dow Jones Industrial Average -4.4% YTD
- S&P 500 -7.0% YTD
- Nasdaq Composite -12.3% YTD
- Russell 2000 -13.1% YTD
Crude futures eke out gain
28-Jan-22 15:30 ET
Dow +269.85 at 34430.63, Nasdaq +240.21 at 13592.99, S&P +58.58 at 4385.09
[BRIEFING.COM] There are 30 minutes left in the trading week, and the S&P 500 is up 1.4%, trimming its weekly loss to 0.3%.
The information technology sector reigns supreme with a 2.8% gain, followed by the real estate (+2.1%) and communication services (+1.7%) sectors. The energy (-1.6%), materials (-0.4%), and industrials (-0.4%) sectors still trade lower.
WTI crude futures settled higher by 0.1%, or $0.12, to $86.74/bbl. |
