Market Snapshot
briefing.com
| Dow | 32910.90 | -269.24 | (-0.81%) | | Nasdaq | 12086.27 | -88.96 | (-0.73%) | | SP 500 | 4115.77 | -44.91 | (-1.08%) | | 10-yr Note |
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| | NYSE | Adv 850 | Dec 2372 | Vol 848 mln | | Nasdaq | Adv 1931 | Dec 2631 | Vol 4.6 bln |
Industry Watch
| Strong: Energy |
| | Weak: Industrials, Consumer Staples, Financials, Utilities, Real Estate, Materials |
Moving the Market
-- Lowered growth estimates from OECD and the Atlanta Fed's GDPNow
-- Relative strength in the mega cap stocks
-- Oil futures head higher again
-- General growth concerns
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Closing Summary
08-Jun-22 16:20 ET
Dow -269.24 at 32910.90, Nasdaq -88.96 at 12086.27, S&P -44.91 at 4115.77
[BRIEFING.COM] Today was hump day and the major indices did not get over the hump. They all fell backward, slipping on rising energy costs and renewed angst about the economic and earnings growth outlook.
A series of headlines ignited the growth concerns, which led to some fairly broad-based selling interest.
- Intel (INTC 41.23, -2.30, -5.3%) said the macro environment has been weaker and that circumstances at this point are much worse than it had anticipated coming into the quarter.
- Scotts Miracle-Gro (SMG 93.24, -8.94, -8.8%) slashed its FY22 (Sep) EPS outlook well below the current consensus estimate, noting its fixed cost structure has seen significantly greater pressure due to replenishment orders from its retail partners not being what it expected since mid-May.
- The OECD cut its 2022 global GDP view to 3.0% from 4.5%.
- The Atlanta Fed's GDPNow model estimate for Q2 was lowered to 0.9% from 1.3%.
- The Reserve Bank of India raised its key lending rate by a larger-than-expected 50 basis points to 4.90% (a 40 bps increase was expected), following suit with the Reserve Bank of Australia's larger-than-expected rate hike on Tuesday.
- The MBA Mortgage Applications Index was down 6.5% week-over-week, driven by a 7% decline in purchase applications and a 6% decline in refinancing applications.
One of the main distracting factors for investors, though, was the continued increase in energy costs. WTI crude futures settled the day up 2.0% at $121.96/bbl. At one point, natural gas futures were up as much as 4.0% to $9.66/mmbtu, yet they hit a wall of resistance late and tumbled into their close, settling the day down 7.2% at $8.67/mmbtu.
The pullback in natural gas prices didn't do anything to stir the conviction of buyers. They held to the sidelines for the most part, biding some time in front of the ECB policy decision on Thursday and the May Consumer Price Index on Friday. Accordingly, volume was on the lighter side today with only 848 million shares traded at the NYSE.
A move in the 10-yr note yield back above 3.00% further dissuaded them. The benchmark instrument settled the day up six basis points at 3.03% in response to inflation worries and a soft 10-yr note auction that saw the high yield of 3.03% tail the when-issued yield of 3.018%.
The growth concerns that prevailed today in the stock market were evident in the tape.
Large-cap stocks outperformed small-cap stocks; value stocks underperformed growth stocks; the Dow Jones Transportation Average dropped 3.8%; the Philadelphia Semiconductor Index slumped 2.4%; and some of today's worst-performing sectors were the economically-sensitive real estate (-2.4%), materials (-2.1%), industrials (-1.8%), and financial (-1.7%) sectors.
Every sector, though, with the exception of the energy sector (+0.2%), finished the day with a loss.
Declining issues outpaced advancing issues by a nearly 3-to-1 margin at the NYSE. Breadth wasn't as lopsided at the Nasdaq, although declining issues outpaced advancing issues by a comfortable margin.
Reviewing today's economic data:
- MBA Mortgage Applications declined 6.5% week-over-week versus a prior decline of 2.3%; purchase applications fell 7% and refinancing applications dropped 6%.
- April Wholesale Inventories increased 2.2% month-over-month (Briefing.com consensus 2.1%) following an upwardly revised 2.7% increase (from 2.3%) in March.
Looking ahead, market participants will receiver the Weekly Initial and Continuing Jobless Claims Report (8:30 a.m. ET) and the EIA's Natural Gas Inventories Report (10:00 a.m. ET) on Thursday. Prior to those reports, the ECB will issue an updated policy directive at 7:45 a.m. ET.
- Dow Jones Industrial Average: -9.5% YTD
- S&P 400: -11.3% YTD
- S&P 500: -13.6% YTD
- Russell 2000: -15.8% YTD
- Nasdaq Composite: -22.7% YTD
Moving laterally into the close
08-Jun-22 15:30 ET
Dow -221.71 at 32958.43, Nasdaq -70.72 at 12104.51, S&P -37.47 at 4123.21
[BRIEFING.COM] Heading into the last half hour of trading, the major indices are moving in a mostly lateral fashion but have moved up some from their lows. The S&P 500 is holding above the 4,100 level, down 1.0% for the day.
The communication services sector (0.2%) has held onto a modest gain thanks to its mega cap components, Alphabet (GOOG 2354.33, +9.70, +0.4%) and Meta (FB 196.93, +1.31, +0.7%). Netflix (NFLX 202.22, +3.60, +1.8%) has also exhibited relative strength today.
The 10-yr note yield is near its session high, up 5 basis points to 3.02% following a softer than expected 10-yr note auction earlier today.
Tomorrow market participants will receive a few pieces of notable economic data:
- 8:30 a.m. ET: Initial Jobless Claims and Continuing Claims
- 10:30 a.m. ET: EIA Natural Gas Inventories
The ECB policy meeting is tomorrow with a decision out at 7:45 a.m. ET. The ECB is not expected to raise any key interest rates; however, it is widely thought that ECB President Lagarde will tease the prospect of a policy shift in the third quarter that includes a rate hike most likely in July.
Most S&P 500 sectors down
08-Jun-22 15:00 ET
Dow -296.56 at 32883.58, Nasdaq -95.72 at 12079.51, S&P -46.96 at 4113.72
[BRIEFING.COM] The major indices have been trolling around a narrow range near their session lows with the Russell 2000 (-1.9%) underperforming the other indices.
Worries grow about earnings prospects as most of the 11 S&P 500 sectors have faded away from higher levels today as buying interest slowed.
The energy sector, which was the only sector to trade in the green for all of yesterday's session, is down 0.2% after reaching a new 52-week high today.
This comes as crude oil futures stay above $120.00/bbl, settling the session today up 2.0% to $121.96/barrel. Strikingly, natural gas futures, which were up as much as 4.0% earlier, sold off into the close and settled the day down 7.2% to $8.67/mmbtu.
In addition, the CBOE VIX Index is up 2.0% to 24.50.
Altria falls after Morgan Stanley downgrades to Underweight
08-Jun-22 14:30 ET
Dow -288.03 at 32892.11, Nasdaq -84.99 at 12090.24, S&P -46.66 at 4114.02
[BRIEFING.COM] The S&P 500 (-1.12%) currently sits at the bottom of the standings among the major averages.
S&P 500 constituents Altria (MO 50.17, -3.84, -7.11%), J.B. Hunt Transport (JBHT 167.99, -8.58, -4.86%), and Royal Caribbean (RCL 54.00, -2.74, -4.83%) dot the bottom of today's standings. This morning, Morgan Stanley downgraded MO to Underweight citing competitive pressures, while shipping names like JBHT are pressured by higher oil prices, and cruise line names like RCL dip following cautious comments from Morgan Stanley as well as inflationary concerns.
Meanwhile, New York-based internet retail firm Etsy (ETSY 86.18, +4.70, +5.77%) outperforms, showing modest gains alongside broader strength in the internet (FDN 144.92, +0.30, +0.21%) space.
Gold narrowly higher on Wednesday
08-Jun-22 14:00 ET
Dow -288.02 at 32892.12, Nasdaq -80.71 at 12094.52, S&P -40.86 at 4119.82
[BRIEFING.COM] In recent trading the tech-heavy Nasdaq Composite (-0.66%), and its major counterparts, have fallen to session lows.
Gold futures settled $4.40 higher (+0.2%) to $1,856.50/oz, even despite a modest rise in both the dollar and treasury yields.
Meanwhile, the U.S. Dollar Index adds +0.2% to $102.50.
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