Market Snapshot
briefing.com
| Dow | 30774.67 | -208.54 | (-0.67%) | | Nasdaq | 11247.55 | -17.15 | (-0.15%) | | SP 500 | 3801.85 | -17.02 | (-0.45%) | | 10-yr Note |
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| | NYSE | Adv 1330 | Dec 1676 | Vol 859 mln | | Nasdaq | Adv 1975 | Dec 2243 | Vol 4.3 bln |
Industry Watch
| Strong: Consumer Discretionary, Consumer Staples |
| | Weak: Communication Services, Materials, Financials |
Moving the Market
-- Hotter-than-expected CPI data fueling rate hike concerns
-- Upside leadership from the mega caps
-- Still inverted 2s10s spread
-- Global growth concerns after Bank of Canada's unexpected 100 bps rate hike
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Volatile price action on the heels of hot CPI data
13-Jul-22 16:25 ET
Dow -208.54 at 30774.67, Nasdaq -17.15 at 11247.55, S&P -17.02 at 3801.85
[BRIEFING.COM] The stock market saw some turbulent price action today after the release of the June CPI data. In the early going, the three main indices headed downward before recovering a portion of their losses after a Wall Street Journal article from a Fed insider noted that the Fed is likely to increase the fed funds rate by 75 bps in July despite growing concerns about a 100-bps increase. The upward momentum didn't stick and the market dipped before the close.
There was a lot of seller conviction in the morning with decliners leading advancers by a 6-to-1 margin at the NYSE and a 3-to-1 margin at the Nasdaq. The advance-decline line showed mixed interest at the close. Decliners led advancers by roughly an 11-to-10 margin at both the NYSE and Nasdaq.
The mega caps outperformed the broader market with the Vanguard Mega Cap Growth ETF (MGK) closing ahead of the broader market, down 0.3%. The S&P 500 closed with a 0.5% loss and the Invesco S&P 500 Equal Weight ETF (RSP) was down 0.6%.
Only two of the 11 S&P 500 sectors closed in the green, consumer discretionary (+0.9%) and consumer staples (+0.1%). The other sectors showed losses ranging from 0.1% (energy) to 1.2% (industrials).
Netflix (NFLX 176.56, +2.11, +1.2%), Twitter (TWTR 36.73, +2.67, +7.8%), and ironSource (IS 3.28, +1.05, +47.1%) all made big moves today with news catalysts.
Netflix was up after it confirmed it's partnering with Microsoft (MSFT 252.72, -0.95, -0.4%) on a new ad supported subscription plan.
Twitter was up big after filing a lawsuit against Elon Musk to enforce the merger agreement, according to CNBC.
As for, ironSource surged after Unity Software (U 32.82, -6.94, -17.5%) confirmed a merger agreement. Unity, for its part, sold off on the news.
Oil prices saw some volatility today with WTI crude oil futures settling the session down 0.9% to $96.38/bbl. Natural gas futures rose 9.0% to $6.57/mmbtu. Unleaded gasoline futures fell 0.5% to $3.24/gal.
The 2s10s spread became more inverted today, reaching its lowest level since late 2000. The 2-yr note yield rose 10 basis points to 3.13% and the 10-yr note yield fell five basis points to 2.90%.
Before tomorrow's open, JPMorgan (JPM 111.91, -1.06, -0.9%), Morgan Stanley (MS 74.98, -0.96, -1.3%), Taiwan Semi (TSM 81.29, +2.19, +2.8%), and Conagra (CAG 35.74, +0.14, +0.4%) are all set to report earnings.
Looking ahead to Thursday, market participants will receive the June PPI (Briefing.com consensus 0.9%; prior 0.8%), Core PPI (Briefing.com consensus 0.5%; prior 0.5%), weekly initial jobless claims (Briefing.com 239,000; prior 235,000), and continuing jobless claims at 8:30 a.m. ET. In addition, weekly EIA Natural Gas Inventories (+60 bcf).
It was a heavy day for economic data which included:
- Total CPI increased 1.3% month-over-month in June (Briefing.com consensus 1.1%) after increasing 1.0% in May. Core CPI, which excludes food and energy, increased 0.7% month-over-month in June (Briefing.com consensus 0.6%) after increasing 0.6% in May.
- On a year-over-year basis, total CPI was up 9.1%, versus 8.6% in May, and core CPI was up 5.9%, versus 6.0% in May.
- The key takeaway from the report is that inflation pressures remained broad-based and elevated even when accounting for the slight dip in the yr/yr core inflation rate. Meanwhile, total CPI accelerated to 9.1% yr/yr, representing the fastest rate of increase since late 1981.
- Weekly MBA Mortgage Applications -1.7%; Prior -5.4%
- Crude oil inventories had a build of 3.25 mln barrels
- Prior week showed a build of 8.24 mln barrels
- Gasoline inventories had a build of 5.83 mln barrels
- Prior week showed a draw of 2.50 mln barrels
- The Treasury Budget showed an $88.8 bln deficit in June versus a $174.16 bln deficit in the same period a year ago. The budget data is not seasonally adjusted, so the June deficit cannot be compared to the May deficit of $66.2 bln.
- The Fed's June Beige Book described overall economic expansion since May as modest with several Districts reporting signs of a slowdown and growing fears of a recession in a few other Districts. Consumer spending moderated while auto sales remained weak due to low inventories. Hospitality and tourism saw healthy activity while manufacturing was mixed. Employment rose at a modest to moderate pace and wages continued growing in most Districts. Substantial price increases were reported across the board.
- Dow Jones Industrial Average: -15.3% YTD
- S&P 400: -19.6% YTD
- S&P 500: -20.2% YTD
- Russell 2000: -23.1% YTD
- Nasdaq Composite: -28.1% YTD
Moving sideways into the close
13-Jul-22 15:30 ET
Dow -126.22 at 30856.99, Nasdaq +3.21 at 11267.91, S&P -8.50 at 3810.37
[BRIEFING.COM] There hasn't been much movement lately with each major index moving mostly sideways.
WTI crude oil futures settled the session down 0.9% to $96.38/bbl. Natural gas futures rose 9.0% to $6.57/mmbtu. Unleaded gasoline futures fell 0.5% to $3.24/gal.
Looking ahead to Thursday, JPMorgan (JPM 112.18, -0.79, -0.8%), Morgan Stanley (MS 75.11, -0.84, -1.1%), Taiwan Semi (TSM 81.32, +2.25, +2.8%), and Conagra (CAG 35.84, +0.24, +0.7%) are all reporting earnings before the open.
Market trends higher
13-Jul-22 15:00 ET
Dow -71.78 at 30911.43, Nasdaq +38.15 at 11302.85, S&P +2.98 at 3821.85
[BRIEFING.COM] The major indices are trending modestly higher recently with the Nasdaq (+0.4%) in the top spot.
The mega caps are pulling up the broader market with the Vanguard Mega Cap Growth ETF (MGK) up 0.2% versus a 0.1% loss in the S&P 500. Microsoft (MSFT 252.52, -1.17, -0.5%) is a notable laggard after it was confirmed to be partnering with Netflix (NFLX 177.75, +3.29, +2.0%) on new ad supported subscription plan.
Separately, the 2-yr note yield is up 11 basis points to 3.13% while the 10-yr note yield is down five basis points to 2.91%.
Beige Book says economy expanded at modest pace, monthly budget deficit down almost 50% yr/yr
13-Jul-22 14:25 ET
Dow -191.38 at 30791.83, Nasdaq -4.24 at 11260.46, S&P -12.59 at 3806.28
[BRIEFING.COM] All three major averages made a modest move lower, the benchmark S&P 500 (-0.33%) now firmly in second place, after the release of both the Fed's July Beige Book and the June Treasury Budget. In short, the Beige Book showed that economic activity expanded at a modest pace, while the government ran a deficit of about $89 bln in June.
Key excerpts from the Beige Book included that outlooks were mostly negative, and uncertainty surged, with contacts voicing concern about slowing future demand and increased risk of a recession stemming from high prices, supply-side constraints, weakening consumer sentiment, and rising interest rates.
Further, substantial price increases were reported across all Districts, at all stages of consumption, though three quarters noted moderation in prices for construction inputs such as lumber and steel. Increases in food, commodities, and energy (particularly fuel) costs remained significant, though there were several reports that price inflation for these categories had slowed compared with recent months but remained historically elevated.
Shortly, the June budget deficit fell approx. -49% yr/yr to $88.8 bln; the YTD deficit now stands at $515.07 bln vs $2.24 trln at this point in 2021.
Gold higher ahead of Beige Book, Budget
13-Jul-22 13:55 ET
Dow -97.24 at 30885.97, Nasdaq +31.40 at 11296.10, S&P -0.22 at 3818.65
[BRIEFING.COM] With about two hours to go the tech-heavy Nasdaq Composite (+0.28%) is the sole index in the green.
Gold futures settled $10.70 higher (+0.6%) to $1,735.50/oz, aided in part by this morning's hot inflation reading which has pushed the dollar modestly lower.
Meanwhile, the U.S. Dollar Index is down about -0.3% to $107.74.
As a reminder, at the top of the hour the Fed's July Beige Book and the June Treasury Budget will be released.
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