Stock Market Update from Briefing.com

Briefing.com

4:10 pm: [BRIEFING.COM] The stock market ended the midweek session on a mixed note. Blue chip listings bolstered the Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.3%), while the Russell 2000 (-0.4%) and Nasdaq Composite (-0.02%) underperformed.

Equity indices began the day in the red, but wasted no time regaining their flat lines. Small-cap stocks were not as fortunate as the Russell 2000 spent the day in the red.

Upon returning into positive territory, the key indices were confined to narrow ranges until the minutes from the July FOMC meeting crossed the wires. The minutes revealed that many officials saw recent job gains as a potential reason to bring forward the first fed funds rate hike; however, most officials showed preference for waiting for more evidence before changing their outlook on rates.

The minutes were followed by a retreat among equities, but the slide was not sustained. The S&P 500 was trading at a fresh session high within an hour of the release. Treasuries, meanwhile, slumped in reaction to the discussion on rates. The 10-yr note fell seven ticks with its yield climbing three basis points to 2.43%.  

Eight sectors ended in the green with industrials (+1.0%) spending the entire session in the lead. The cyclical sector was supported by Dow components Boeing (BA 127.35, +1.77) and General Electric (GE 26.36, +0.31) as the two added 1.4% and 1.2%, respectively. Despite the strength in the two names, the broader PHLX Defense Index (+0.9%) ended just behind the sector. Similarly, transport stocks could not keep pace with the sector as the Dow Jones Transportation Average added 0.6%.

Also of note, shares of Hertz (HTZ 30.33, -1.23) endured quite the roller coaster ride. The stock settled at $31.56 yesterday, but fell all the way to $27.47 this morning after the company said it expects to fall short of its full-year guidance, which was withdrawn. The stock spent the bulk of the day inching off its low with a big boost coming after Carl Icahn disclosed a stake in the company and said he may seek a seat on the board. Hertz ended the session with a 3.9% decline.

The consumer discretionary sector (+0.5%) finished in second place after a handful of retailers reported their quarterly results. American Eagle (AEO 12.98, +1.39), Lowe's (LOW 52.33, +0.81), and PetSmart (PETM 70.52, +0.82) all reported better than expected results, while Target (TGT 60.33, +1.08) and Staples (SPLS 11.32, -0.30) met expectations, but issued cautious guidance. For its part, the SPDR S&P Retail ETF (XRT 87.68, +0.63) gained 0.7%.

Elsewhere, the financial sector (+0.3%) was the only outperformer of note, while the remaining sectors finished near their respective flat lines. Bank of America (BAC 15.52, +0.07) was in the headlines after the Wall Street Journal reported the bank is nearing a $17 billion settlement with the Department of Justice over the sales of mortgage-backed securities.

Participation remained on the light side with just under 530 million shares changing hands at the NYSE.

Economic data was limited to the weekly MBA Mortgage Index, which rose 1.4% to follow last week's 2.7% decline.

Tomorrow, weekly initial claims will be reported at 8:30 ET (Briefing.com consensus 308K), while Existing Home Sales for July (consensus 5.00 million), August Philadelphia Fed Survey (consensus 15.5), and July Leading Indicators (expected 0.7%) will all be released at 10:00 ET.

  • Nasdaq Composite +8.4% YTD 
  • S&P 500 +7.5% YTD 
  • Dow Jones Industrial Average +2.4% YTD 
  • Russell 2000 -0.5% YTD

3:30 pm: [BRIEFING.COM]

  • Dec gold traded below the $1300 per ounce level today as investors awaited the release of the FOMC minutes from the July policy meeting. The yellow metal pulled back slightly from its session high of $1299.00 per ounce set in early morning action and dipped to a session low of $1293.40 per ounce.
  • It eventually settled with a 0.1% loss at $1295.00 per ounce.
  • Gold slipped further in electronic trade after the release of the FOMC minutes and is currently trading at $1290.80 per ounce, or 0.5% lower. 
  • Sep silver touched a session high of $19.58 per ounce shortly after equity markets opened but retreated to a session low of $19.45 per ounce as the session progressed. It chopped around near the $19.50 per ounce level in afternoon action and settled at that price, booking a gain of 0.4%. 
  • Oct crude oil traded in positive territory today, advancing as high as $96.61 per barrel following inventory data. The EIA reported that for the week ending Aug 15, crude oil inventories had a draw of 4.47 mln barrels when a draw of 1.2-1.8 mln barrels was anticipated.
  • The energy component briefly dipped below $93 per barrel in early afternoon action but eventually settled with a 0.6% gain at $93.40 per barrel.
  • Sep natural gas, on the other hand, spent its entire session in negative territory. It brushed a session low of $3.79 per MMBtu and settled with a 1.5% loss at $3.82 per MMBtu.

3:00 pm: [BRIEFING.COM] The S&P 500 trades higher by 0.3% with one hour remaining in the session. Although the market slumped in reaction to the FOMC minutes, it has been able to retrace that entire move. This leaves the S&P 500 at a fresh high, while the Nasdaq (unch) trades a couple points away from its best level of the day.

Overall, the market has held up well today and the S&P 500 is on track to register its third consecutive advance. The benchmark index has added 1.6% so far this week, while the Dow Jones Industrial Average has shown relative strength. The blue chip index is higher by 1.9% since last Friday.

2:30 pm: [BRIEFING.COM] The S&P 500 remains near its flat line, while Treasuries hover on their lows (10-yr yield +4 bps at 2.44%) following the recent release of the FOMC minutes from the July meeting.

While the market has slipped from its high, sector standing has not changed much with respect to the S&P 500. Consumer discretionary (+0.3%), financials (+0.1%), and industrials (+0.9%) continue showing relative strength, while consumer staples (-0.2%), health care (-0.2%), and utilities (-0.3%) underperform.

Notably, the health care sector has been pressured by biotech names as the iShares Nasdaq Biotechnology ETF (IBB 266.82, -0.41) trades lower by 0.2% after spending the first half of action just above its flat line.

2:05 pm: [BRIEFING.COM] The Federal Reserve has just released the minutes from its latest policy meeting. Most notably, the minutes revealed that many officials saw the recent job gains as a potential reason to bring forward the first fed funds rate hike; however, most officials showed preference for waiting for more evidence before changing the rate outlook.

With regard to prices, several participants viewed downside inflation risks as diminished.

The S&P 500 (unch) has surrendered its gain in reaction to the minutes, while Treasuries have dropped to new lows for the day. The 10-yr yield is now higher by two basis points at 2.43%.

1:25 pm: [BRIEFING.COM] The S&P 500 is up four points, or 0.2%, for the day.  The kicker is that the S&P 500 is at its best level of the day leading up to the release of the FOMC Minutes from the July 29-30 FOMC meeting at the top of the hour.

In other words, today's market action has been less than thrilling as participants have been in a wait-and-see mode.  The same can be said for sellers, too.  The market started on a slightly weaker note, yet selling efforts were held in check.

Volume is quite light with the last vestiges of summer being enjoyed away from trading desks.  

The light volume can lead to quick swings in the market's behavior, but to this point it has largely led to more of the same that has been seen over the course of the past eight trading sessions (i.e., a positive bias).  Any inkling in the minutes that more Fed members are getting more persistent in talking about the Fed's exit strategy has the potential to stir things up this afternoon, especially since the market knows Fed Chair Yellen is slated to talk Friday at the Jackson Hole Symposium about the labor market. 

1:00 pm: [BRIEFING.COM] The stock market is little changed at midday with participants not showing much willingness to step in ahead of the 14:00 ET release of the FOMC minutes from the July policy meeting. The S&P 500 (+0.1%) sits just above its flat line with five sectors showing gains, while the Dow Jones Industrial Average (+0.2%) outperforms. Small-cap stocks have not been as fortunate with the Russell 2000 (-0.5%) spending the first half of action below its flat line.

Equity indices began the day with modest losses, but the Dow and S&P 500 returned to their flat lines during the first hour of action. The industrial sector (+0.8%) has fueled the early rebound, while the remaining nine hover much closer to their flat lines.

In large part, industrials have been supported by Dow components Boeing (BA 127.16, +1.58) and General Electric (GE 26.28, +0.23). The two names hold respective gains of 1.3% and 0.8%, while the PHLX Defense Index, which includes both names, trades up 0.7%. However, transport stocks have struggled to keep pace with the sector. The Dow Jones Transportation Average is higher by 0.6% with five of its 20 components showing losses.

Elsewhere, the consumer discretionary sector (+0.2%) also trades ahead of the broader market. A handful of retail earnings crossed the wires this morning, but the results have been somewhat mixed. American Eagle (AEO 12.60, +1.01), Lowe's (LOW 51.49, -0.03), and PetSmart (PETM 70.13, +0.43) all reported better than expected results, while Target (TGT 59.94, +0.69) and Staples (SPLS 11.29, -0.33) reported in-line, but issued cautious guidance.

Outside of the two groups, the financial sector (+0.2%) is the only other influential outperformer, while energy (-0.2%), health care (-0.1%), and technology (unch) weigh.

Treasuries hover near their lows with the 10-yr yield up one basis point at 2.41%.

Economic data was limited to the weekly MBA Mortgage Index, which rose 1.4% to follow last week's 2.7% decline.

12:30 pm: [BRIEFING.COM] The major averages have not gone anywhere during the past 30 minutes, but there has been some movement in the semiconductor space. Specifically, Infineon Technologies (IFNNY 11.19, -0.37) has agreed to acquire International Rectifier (IRF 39.19, +12.63) for $40/share. Infineon Technologies is lower by 3.2%, while International Rectifier has spiked 47.5%.

The broader PHLX Semiconductor Index is higher by 0.7%, while the technology sector sits right below its flat line.

12:00 pm: [BRIEFING.COM] The S&P 500 (+0.1%) trades within a point of its session high as participants continue sitting on their hands ahead of this afternoon's release of the FOMC minutes from the July policy meeting.

The industrial sector (+0.8%) continues holding the lead, but much of the advance is due to the strength of influential components like Boeing (BA 127.27, +1.69) and General Electric (GE 26.28, +0.23). The two names hold respective gains of 1.3% and 0.9%. Despite the strength in the heavily-weighted names, other defense contractors and transport stocks trade a bit behind the sector. The PHLX Defense Index is higher by 0.7%, while the Dow Jones Transportation Average holds an advance of 0.6%.

11:30 am: [BRIEFING.COM] The stock market has climbed to a new high thanks to inflows that have boosted a handful of underperforming sectors. As a result, only three groups remain in the red at this time.

Generally speaking, the S&P 500 has spent the first two hours of action inside a five-point range and is likely to continue trading near its current level until the afternoon when the FOMC releases the minutes from its latest policy meeting.

Overseas, the Bank of England released its latest minutes, which revealed the first split vote on rates in more than five years with two members voting in favor of a rate increase. While the Fed minutes are not expected to convey the same message, it would not be surprising to see some discussion about hiking the fed funds rate sooner rather than later.

11:00 am: [BRIEFING.COM] Equity indices remain mixed with the Dow Jones Industrial Average (+0.2%) and the S&P 500 (+0.1%) trading near their flat lines, while the Nasdaq (unch) and Russell 2000 (-0.5%) continue to lag.

Even though the major averages have climbed off their lows, four sectors are still trading in the red. The energy sector (-0.2%) is the weakest performer, while consumer staples (-0.2%), materials (-0.1%), and technology (-0.1%) sit near their flat lines.

On the upside, the industrial sector, which has led since the start, has extended its gain to 0.6%.Top-weighted sector component-General Electric (GE 26.28, +0.23)-has contributed to the strength with its gain of 0.9%.

10:35 am: [BRIEFING.COM]

  • Commodities are trading modestly higher this morning despite strength in the dollar index
  • Copper futures are showing interesting this morning despite strength in the dollar index.
  • Copper (Sept) has been climbing higher all day so far and just hit another new HoD at $3.16/lb. Sept copper is now +2.1% at $3.15/lb
  • Crude oil moved into positive territory in overnight trade as has risen as high as $93.48/barrel this morning. Crude was holding gains ahead of the weekly EIA inventory report
  • Following the data, crude showed a whippy reaction to the data before beginning to inch slightly lower. Oct crude oil is now +0.6% at $93.40/barrel.
  • Gold and silver have been pulling back, coming off a rally. Dec gold moved into the red and is now 0.1% at $1295/oz here. Sept silver is +0.4% at $19.49/oz
  • Reminder: Crude oil futures rolled over to the October contract today from Sept

9:55 am: [BRIEFING.COM] The Dow (unch) and S&P 500 (unch) have ticked up off their opening lows, while the Nasdaq Composite (-0.1%) and Russell 2000 (-0.6%) remain near their lowest levels of the day.

At this juncture, the energy sector (-0.3%) is the only group trading with a loss larger than 0.2%. Meanwhile, the top-performing sector-industrials-has extended its advance to 0.5%.

Also of note, the health care sector (-0.1%) was among the opening laggards, but the countercyclical group has closed the gap and now trades in-line with the S&P 500. Biotechnology has factored into the rebound as the iShares Nasdaq Biotechnology ETF (IBB 267.66, +0.43) trades higher by 0.2%.

9:40 am: [BRIEFING.COM] The major averages slipped out of the gate with the Russell 2000 leading the initial retreat. The small-cap index is lower by 0.6%, while the S&P 500 trades down 0.1% with eight sectors showing losses.

So far, the energy sector (-0.4%) is the weakest performer, while the health care space (-0.3%) also sits near the bottom of the leaderboard. Outside of the two sectors, the remaining groups hover closer to their respective flat lines.

On the upside, the industrial space (+0.3%) outperforms amid with Dow component Boeing (BA 126.12, +0.54) trading higher by 0.4%.

Treasuries remain in the red with the 10-yr yield up one basis point at 2.41%.

9:12 am: [BRIEFING.COM] S&P futures vs fair value: -3.20. Nasdaq futures vs fair value: -5.80. The stock market is on track for a lower start as futures on the S&P 500 trade three points below fair value. Index futures spent the night in negative territory and made a brief appearance in the green during the past hour before returning into the middle of the overnight range.

In general, the weakness has coincided with losses among European indices as markets in France, Germany, and the UK sit on their lows. Furthermore, the cautious sentiment has translated into a bid for safety that has sent Germany's 10-yr yield back below the 1.00% mark. Currently, the 10-yr bund yield is lower by two basis points at 0.98%.

Domestically, Treasuries hold modest losses after spending the majority of the night in the red. The 10-yr yield is higher by one basis point at 2.41%.

On the corporate front, Hertz (HTZ 27.98, -3.58) is indicated to open lower by 11.6% after saying it expects to report earnings well below its 2014 guidance, which was withdrawn. Separately, Target (TGT 58.16, -1.09) holds a pre-market loss of 1.8% after reporting in-line results and issuing cautious guidance.

The FOMC will release the minutes from its latest policy meeting at 14:00 ET.

8:56 am: [BRIEFING.COM] S&P futures vs fair value: -3.40. Nasdaq futures vs fair value: -5.80. The S&P 500 futures trade three points below fair value.

Markets finished mixed across Asia. Reserve Bank of Australia Governor Glenn Stevens testified in front of the House of Representatives' Standing Committee on Economics and noted rates are likely to remain unchanged for the foreseeable future.

  • In economic data: 
    • Japan's trade deficit narrowed to JPY1.02 trillion from JPY1.07 trillion (expected deficit of JPY770 billion) as imports rose 2.3% (consensus -1.7%) and exports increased 3.9% (forecast 3.8%). Separately, All Industries Activity Index slipped 0.4% month-over-month (consensus -0.2%; prior 0.6%) 
    • Australia's MI Leading Index ticked down 0.1% month-over-month (prior 0.1%) 
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  • Japan's Nikkei registered a fractional gain as trade ticked higher for an eighth session. Heavyweights Softbank and KDDI Corp. provided support as both added 1.0%. 
  • Hong Kong's Hang Seng added 0.2%, finishing at its best level since May 2008. Bank of China HK jumped 3.6% following its earnings beat. 
  • China's Shanghai Composite shed 0.2%, slipping from eight-month highs. Real estate shares were pressured with Vanke and Poly Real Estate down 2.0% and 1.1%, respectively.
Major European indices hover in the red. The Bank of England released the minutes from its latest meeting, which revealed a split vote in favor of continuing on the current course. Seven members voted to keep current policy intact, while Martin Weale and Ian McCafferty voted in favor of hiking the benchmark rate by 25 basis points. This represented the first dissent in more than three years.
  • Economic data was limited: 
    • Germany's PPI ticked down 0.1% month-over-month (expected 0.1%; prior 0.0%), while the year-over-year reading fell 0.8% (consensus -0.7%; last -0.7%) 
    • Great Britain's CBI Industrial Trends Orders jumped to 11 from 2 (expected 4) 
------
  • Great Britain's FTSE is lower by 0.5% amid broad weakness. Homebuilders are among the weakest performers with Barratt Developments and Persimmon both down near 2.1%. Royal Mail outperforms with a solid gain of 1.9%. 
  • In France, the CAC holds a loss of 0.7%. Consumer and telecom names underperform with Carrefour, Kering, Orange, and Vivendi down between 1.0% and 1.4%. Publicis Groupe is the top performer, up 0.6%. 
  • Germany's DAX trades down 0.8% with 26 of 30 components showing losses. Infineon Technologies and Continental are among the weakest performers with losses close to 2.0% apiece. Deutsche Boerse outperforms with an increase of 0.8%.

8:28 am: [BRIEFING.COM] S&P futures vs fair value: -4.80. Nasdaq futures vs fair value: -7.80. U.S. equity futures remain below their flat lines, which has been the case through the course of the night. If the current indication holds, the S&P 500 will take a step back after climbing 1.4% during the first two sessions of the week.

There was no market-moving data released this morning, but the FOMC will reveal the minutes from its latest policy meeting at 14:00 ET. Due to the afternoon release, it would not be a surprise to see equity indices respect narrow ranges ahead of the minutes.

On the corporate front, Hertz (HTZ 27.50, -4.06) is indicated to open lower by 12.9% after saying it expects to report earnings well below its 2014 guidance, which was withdrawn.

7:58 am: [BRIEFING.COM] S&P futures vs fair value: -1.00. Nasdaq futures vs fair value: -2.30. U.S. equity futures hold slim losses amid cautious action overseas. The S&P 500 futures hover one point below fair value with the benchmark index on course to give back a fraction of its recent advance. Market participants have received a few quarterly reports this morning, but none of the releases have led to broader moves in the market. On the economic front, the weekly MBA Mortgage Index rose 1.4% to follow last week's 2.7% decline, while the Federal Open Market Committee will release the minutes from its latest policy meeting at 14:00 ET.

Treasuries are modestly lower with the 10-yr yield up one basis point at 2.41%.

In U.S. corporate news of note:

  • PetSmart (PETM 71.77, +2.07): +3.0% after beating earnings estimates and issuing in-line guidance. 
  • JA Solar Holdings (JASO 9.45, -0.54): -5.4% after reporting a bottom-line miss and raising its shipment guidance. 
  • Lowe's (LOW 49.82, -1.70): -3.3% despite reporting a one-cent beat. 
  • Staples (SPLS 11.81, +0.19): +1.6% after reporting in-line earnings. 
  • Youku Tudou (YOKU 19.76, -1.76): -8.2% after missing estimates and issuing below-consensus revenue guidance.
Reviewing overnight developments:
  • Asian markets ended mixed. China's Shanghai Composite -0.2%, Hong Kong's Hang Seng +0.2%, and Japan's Nikkei settled flat. 
    • In economic data: 
      • Japan's trade deficit narrowed to JPY1.02 trillion from JPY1.07 trillion (expected deficit of JPY770 billion) as imports rose 2.3% (consensus -1.7%) and exports increased 3.9% (forecast 3.8%). Separately, All Industries Activity Index slipped 0.4% month-over-month (consensus -0.2%; prior 0.6%) 
      • Australia's MI Leading Index ticked down 0.1% month-over-month (prior 0.1%) 
    • In news: 
      • Japan's trade data showed a big increase in exports to Europe (10.0%), while exports to Asia and the U.S. showed modest upticks. 
  • Major European indices hover in the red. France's CAC -0.3%, Germany's DAX -0.3%, and Great Britain's FTSE -0.4%. Elsewhere, Italy's MIB +0.1% and Spain's IBEX -0.1%. 
    • Economic data was limited: 
      • Germany's PPI ticked down 0.1% month-over-month (expected 0.1%; prior 0.0%), while the year-over-year reading fell 0.8% (consensus -0.7%; last -0.7%) 
      • Great Britain's CBI Industrial Trends Orders jumped to 11 from 2 (expected 4) 
    • Among news of note: 
      • The Bank of England released the minutes from its latest meeting, which revealed a split vote in favor of continuing on the current course. Seven members voted to keep current policy intact, while Martin Weale and Ian McCafferty voted in favor of hiking the benchmark rate by 25 basis points. This represented the first dissent in more than three years.

6:55 am: [BRIEFING.COM] S&P futures vs fair value: -3.00. Nasdaq futures vs fair value: -5.00.

6:55 am: [BRIEFING.COM] Nikkei...15454.45...+4.70...0.00.  Hang Seng...25159.76...+36.80...+0.20%.

6:55 am: [BRIEFING.COM] FTSE...6759.04...-20.30...-0.30%.  DAX...9307.26...-27.00...-0.30%.

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