Market Snapshot
briefing.com
| Dow | 33180.14 | +264.36 | (0.80%) | | Nasdaq | 12175.23 | +113.86 | (0.94%) | | SP 500 | 4160.68 | +39.25 | (0.95%) | | 10-yr Note |
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| | NYSE | Adv 2272 | Dec 1035 | Vol 945 mln | | Nasdaq | Adv 3052 | Dec 1650 | Vol 4.3 bln |
Industry Watch
| Strong: Energy, Information Technology, Health Care, Industrials, Real Estate |
| | Weak: Consumer Discretionary |
Moving the Market
-- Target lowered guidance and announced price cuts, inciting worries about margin issues
-- 10-yr note yield falls back below 3.00%
-- Resilience to opening selling efforts spurs renewed buying interest
-- Energy sector rallies (again) as oil futures press higher (again)
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Closing Summary
07-Jun-22 16:20 ET
Dow +264.36 at 33180.14, Nasdaq +113.86 at 12175.23, S&P +39.25 at 4160.68
[BRIEFING.COM] The stock market had its reasons to decline today -- and that's what it did at the open. After that, however, it was mostly an upward, recovery march for the major indices which ended close to their highs for the session.
Retailer Target (TGT 156.05, -3.62, -2.3%) and railroad operator Union Pacific (UNP 228.71, +3.54, +1.6%) played a big part in driving the negative start. They both issued profit margin warnings, with the former blaming a need to clear excess inventory and the latter blaming cost inflation.
Their news came on top of a surprise decision by the Reserve Bank of Australia to raise its key lending rate by 50 basis to 0.85%, when only 25 basis points was expected, a report out of Germany showing weaker-than-expected factory orders for April, and news coverage highlighting national average gasoline prices hitting a record $4.92/gallon.
Soon after the opening bell, the Dow, Nasdaq, and S&P 500 were down 0.8%, 1.4%, and 1.0%, respectively. Just as quickly, though, they started to rebound as the CBOE Volatility Index rolled over and investors stepped in to buy on the initial weakness.
Notably, the CBOE Volatility Index hit 26.24 shortly before 10:00 a.m. ET. It trended lower the rest of the day, crossing at 23.98 as the stock market's closing bell rang. The drop-off in the so-called "fear gauge" coincided with a pickup in stocks, which were also helped by the following considerations:
- The S&P 500 holding above the May 27 low (4077.43) on its opening decline (today's low was 4080.19)
- A lack of follow-through selling pressure in Target, which was down nearly 10% in pre-market trading, and in Union Pacific, which was down nearly 4.0%
- The 10-yr note yield slipping back below 3.00% (-7 bps to 2.97%)
- Broad-based buying interest that benefited all sectors
Today's best-performing sector was the energy sector (+3.1%), which is now up 65.0% for the year. It enjoyed a 1.2% gain in WTI crude futures to $119.60/bbl and a big move by Exxon Mobil (XOM 103.37, +4.53, +4.6%), which was upgraded by Evercore ISI to Outperform from In-Line.
For most of the day, the energy sector was the only sector to gain at least 1.0%, but late buying interest helped the cause for a lot of sectors. The industrials (+1.4%), health care (+1.3%), information technology (+1.2%), and real estate (+1.2%) sectors all ended with gains in excess of 1.0%.
The only sector that didn't finish higher was the consumer discretionary sector (-0.4%), but even its loss felt like a gain given Target's warning, and considering the sector was down as much as 2.7% at its worst levels of the morning.
An advance-decline line that looked questionable at various points during today's session left no question by the end of the day that a bullish bias prevailed. Advancing issues led declining issues by an 11-to-5 margin at the NYSE and by nearly a 2-to-1 margin at the Nasdaq.
Reviewing today's economic data:
- The April trade deficit narrowed nicely to $87.1 billion (Briefing.com consensus -$89.6 billion) from an upwardly revised $107.7 billion (from -$109.8 billion), but it wasn't for the best of reasons.
- The key takeaway from the report is that imports dropped by $12.1 billion from March largely on account of supply chain bottlenecks driven by COVID-related lockdowns in China and presumably by less ordering from retailers facing an inventory glut.
- Consumer credit increased by $38.0 billion in April (Briefing.com consensus $34.0 billion). The prior month saw a downward revision to $47.4 bln from $52.4 bln.
- The key takeaway from the report is that April marked another month of robust credit expansion, driven by hefty increases for both revolving and nonrevolving credit.
Looking ahead, market participants will receive the MBA's Weekly Mortgage Applications Index (7:00 a.m. ET), April Wholesale Inventories (10:00 a.m. ET), and the EIA's Weekly Crude Oil Inventories Report (10:30 a.m. ET) on Wednesday.
- Dow Jones industrial Average: -8.6% YTD
- S&P 400: -9.7% YTD
- S&P 500: -12.7% YTD
- Russell 2000: -14.5% YTD
- Nasdaq Composite: -22.2% YTD
Major indices near session highs
07-Jun-22 15:30 ET
Dow +200.70 at 33116.48, Nasdaq +90.20 at 12151.57, S&P +29.25 at 4150.68
[BRIEFING.COM] The major indices are holding near session highs as we enter the last half hour of trading. The S&P 500 is up 0.6%, holding comfortably above the 4,100 level.
The only one of the 11 S&P 500 sectors in the red is the consumer discretionary sector. It's been held down by Target (TGT 155.35, -4.32, -2.7%) which has recouped some losses, down 3.0% for the day but well off its session low.
The CBOE VIX Index is down 4.0%, it peaked today right around when the stock market buying interest picked up. The VIX has been on a steady decline while the S&P 500 has been trending higher and currently sits at its highest level of the day.
Separately, the 10-yr Treasury note yield is down 5 basis points to 2.98%.
Looking ahead, market participants will receive the following economic data tomorrow:
- 7:00 a.m. ET MBA Mortgage Applications Index
- 10:00 a.m. ET April Wholesale Invetories
- 10:30 a.m. ET EIA Crude Oil Inventories
Energy still strong
07-Jun-22 15:00 ET
Dow +118.93 at 33034.71, Nasdaq +61.75 at 12123.12, S&P +21.85 at 4143.28
[BRIEFING.COM] The major indices are near their session highs at this point. The Russell 2000 has a slight performance edge over the other major indices, up 1.1%.
The energy sector (+2.7%) is holding onto its strength today, trading near its session high. Its components are all showing strength with two notable movers being Exxon (XOM 102.77, +3.92, +4.0%) and Chevron (CVX 180.18, +3.35, +1.9%), although APA Corp. (APA 51.680, +3.13, +6.4%) is another big mover.
On a related note, natural gas futures have pulled back from the session high, settling the day flat, at $9.34/mmbtu. WTI crude oil futures, which had a choppy day of trading, settled the day up 1.2% to $119.60/bbl.
Just in, consumer credit increased by $38 billion in April (Briefing.com consensus $34.0 billion). The prior month saw a downward revision to $47.4 bln from $52.4 bln.
Raytheon outperforms, plans to move HQ to Virginia; Mosaic falls on reports of fert price drops
07-Jun-22 14:30 ET
Dow +147.60 at 33063.38, Nasdaq +77.50 at 12138.87, S&P +24.25 at 4145.68
[BRIEFING.COM] Both the S&P 500 (+0.59%) and the Dow Jones Industrial Average (+0.45%) cracked fresh session highs in the last half hour.
S&P 500 constituents APA Corp. (APA 51.72, +3.17, +6.53%), Moderna (MRNA 145.71, +5.71, +4.08%), and Raytheon Technologies (RTX 100.06, +2.85, +2.93%) pepper the top of today's action. This morning MRNA announced that the first patients were dosed in a Phase 3 study of mRNA-1010 (influenza vaccine), and RTX revealed that it would move its global HQ to Arlington, Virginia from Massachusetts.
Meanwhile, Florida-based materials name Mosaic (MOS 56.55, -3.01, -5.05%) is today's top laggard; reports circulated this morning that Brazilian ports were flush with fertilizers, signaling the potential for a price drop.
Gold snaps back-to-back declines on Tuesday
07-Jun-22 14:00 ET
Dow +83.82 at 32999.60, Nasdaq +38.29 at 12099.66, S&P +12.20 at 4133.63
[BRIEFING.COM] With about two hours remaining on Tuesday the tech-heavy Nasdaq Composite (+0.32%) holds a narrow lead among the major averages.
Gold futures settled $8.40 higher (+0.5%) to $1,852.10/oz, rebounding slightly from back-to-back losses, aided in part by a modest dip in the dollar and treasury yields.
Meanwhile, the U.S. Dollar Index is down about -0.1% to $102.39.
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