Stock Market Update from Briefing.com

Briefing.com

11:55 am: [BRIEFING.COM] Not much change in the market with the key indices hovering near their highs. Including today's 0.2% increase, the S&P 500 is on track to end the week higher by 1.6%. Furthermore, the benchmark index is tracking a 2.4% gain for the month.

Although the S&P 500 is likely to register a solid monthly gain, the Nasdaq (+0.4%) has fared even better with today's gain extending its July advance to 3.3%. However, blue chip names have struggled to keep pace, evidenced by the Dow Jones Industrial Average (+0.1%), which is higher by 0.8% for the month.

Elsewhere, Treasuries have rallied and they will finish July near their best levels of the month. The 10-yr yield hovered near 2.42% at the start of the month, but has been pressured to 2.20% over the past four weeks.

11:30 am: [BRIEFING.COM] Equity indices remain near their session highs as gains among influential sectors like consumer discretionary (+0.6%), industrials (+0.2%), and health care (+0.9%) offset losses in energy (-1.6%), financials (-0.1%), and technology (-0.2%).

Most notably, the health care sector has rallied in reaction to better than expected results from the likes of Amgen (AMGN 178.30, +6.61), Molina Health (MOH 76.85, +8.85), and Universal Health Systems (UHS 146.91, +5.47). Furthermore, Amgen's results have boosted other biotech names, evidenced by a 1.4% spike in iShares Nasdaq Biotechnology ETF (IBB 384.01, +5.21).

Similar to health care, the other three countercyclical sectors trade ahead of the broader market with consumer staples, utilities, and telecom services up between 0.3% and 1.6%.

10:55 am: [BRIEFING.COM] The major averages have bounced off their early lows, but a few pockets of weakness remain in place. The S&P 500 trades higher by 0.2% with nine sectors in the green.

The rate-sensitive utilities sector (+1.7%) trades well ahead of its peers with today's gain extending its July advance to 6.8%. Elsewhere, health care (+0.8%) and consumer discretionary (+0.6%) also outperform while energy (-2.0%) and technology lag (unch) with the tech sector pressured by chipmakers, evidenced by a 0.4% decline in the PHLX Semiconductor Index.

Interestingly, the Nasdaq (+0.5%) has been able to overcome the weakness among chipmakers thanks to the biotech group. The iShares Nasdaq Biotechnology ETF (IBB 385.30, +6.50) trades up 1.7%.

10:30 am: [BRIEFING.COM]

  • The dollar have been under heavy pressure this morning, following the release of historically low data with regard to the US Employment Cost Index (ECI)
  • The lowest-ever ECI figure was seen by the market as impeding the Fed's ability to raise interest rates in the near term, and as such the dollar index got crushed.
  • Upon release of the data, the dollar sharply fell to lows for the session, and has extended those losses in the face of additionally released, positive PMI and in-line Mich. Sentiment data
  • The index is now down 1% to 96.61, which has given a strong tailwind to a broad set of commodities (particularly precious metals and WTI)
  • Oil traded lower overnight, extending weakness following commentary from OPEC, that indicated the cartel has no plans to cut near term production
  • After falling to session lows near $47.40/barrel, WTI rallied on the dollar's weakness back to the flat line, but has since moderately retraced back to -1.3% at $47.86/barrel
  • Precious metals are trading solidly higher so far, running up from modest losses prior to the ECI data release.
  • Gold is now +0.6% to $1094.70/oz, silver is +0.7% to $14.80/oz
  • Copper saw a smaller rally on the dollar, holding steady just below flat at -0.2% to $2.37/lb
  • Natural gas has traded slightly negative at -0.3% to $2.76/MMBtu so far this morning, on a relative balance between yesterday's inventory build and revised weather expectations (seeing cooling across the N.E. US). 

10:00 am: [BRIEFING.COM] The S&P 500 remains just below its flat line while the Nasdaq Composite (+0.1%) outperforms slightly.

Just released, the University of Michigan Consumer Sentiment report for July was revised down to 93.1 from 93.3 while the Briefing.com consensus expected the reading to improve to 94.0.

9:45 am: [BRIEFING.COM] The major averages began the trading day just above their flat lines, but the Dow (-0.3%) and S&P 500 (-0.1%) have quickly turned negative due to losses in Chevron (CVX 89.35, -3.68) and ExxonMobil (XOM 79.78, -3.23). The two names have pressured the energy sector (-1.8%) while seven of the remaining nine sectors hold early gains.

Heavily-weighted consumer discretionary (+0.1%), industrials (+0.2%), and health care (+0.5%) are among the early outperformers while financials (-0.3%) and technology (-0.2%) underperform.

Treasuries remain near their recent highs with the 10-yr yield down five basis points at 2.21%.

Just released, the Chicago PMI for July rose to 54.7 from 49.4 while the Briefing.com consensus expected an increase to 50.5.

9:11 am: [BRIEFING.COM] S&P futures vs fair value: +4.10. Nasdaq futures vs fair value: +15.10. The stock market is on track for a modestly higher open as S&P 500 futures trade four points above fair value. Index futures held slim pre-market losses not long ago, but spiked off their lows after the Q2 Employment Cost Index (+0.2%; Briefing.com consensus 0.6%) came in below expectations. The lower-than-expected wage growth was viewed as an argument in favor of the Federal Reserve delaying its first rate hike. As a result, Treasuries spiked, sending the 10-yr yield lower by six basis points to 2.20%.

More data will be reported today with the Chicago PMI for July set to be released at 9:45 ET (Briefing.com consensus 50.5) while the final reading of the Michigan Sentiment Index for July will cross the wires at 10:00 ET (expected 94.0).

On the earnings front, investors have received another large batch of results with another heavy week up ahead. The energy sector is likely to face early pressure as Dow components Chevron (CVX 90.88, -2.15) and ExxonMobil (XOM 81.30, -1.71) hold pre-market losses close to 2.2% apiece after both names reported disappointing results. On the flip side, the health care sector should receive early support from Amgen (AMGN 176.29, +4.60) and Molina Healthcare (MOH 70.92, +2.92) after both names surpassed their estimates.

The S&P 500 enters the Friday session up 1.4% for the week.

8:54 am: [BRIEFING.COM] S&P futures vs fair value: +2.40. Nasdaq futures vs fair value: +9.70. The S&P 500 futures trade two points above fair value.

Most markets in the Asia-Pacific region closed the week on a winning note and with strong gains in the case of smaller markets like Indonesia (+1.9%) and Thailand (+1.8%). China's Shanghai Composite was an exception as it closed out a terrible month with a 1.1% decline.

  • In economic data: 
    • Japan's June Household Spending -3.0% month-over-month (expected -0.5%; prior +2.4%); -2.0% year-over-year (expected +1.7%; prior +4.8%). June National CPI +0.4% year-over-year (expected +0.3%; prior +0.5%). July Tokyo CPI +0.2% year-over-year (expected +0.2%; prior +0.3%). June National Core CPI +0.1% (expected 0.0%; prior +0.1%). July Tokyo Core CPI -0.1% (expected 0.0%; prior +0.1%). June unemployment rate 3.4% (expected 3.3%; prior 3.3%). June Construction Orders +15.4% year-over-year (prior -7.4%). June Housing Starts +16.3% year-over-year (expected +2.9%; prior +5.8%) 
    • Hong Kong's June Retail Sales -0.4% year-over-year (prior -0.1%) 
    • South Korea's June Industrial Production +2.3% month-over-month (expected +0.1%; prior -1.6%); +1.2% year-over-year (expected -1.0%; prior -3.0%). Separately, Retail Sales -3.7% month-over-month (expected -0.1%; prior -0.1%) and August Manufacturing BSI Index 73 (prior 67) 
    • Australia's Q2 PPI +0.3% quarter-over-quarter (expected +0.6%; prior +0.5%); +1.1% year-over-year (prior +0.7%). June Housing Credit +0.6% (prior +0.5%) and June Private Sector Credit +0.4% month-over-month (expected +0.5%; prior +0.5%) 
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  • Japan's Nikkei increased 0.3% and closed at its highs for the day. The modest gains followed a large batch of economic reports that included some disappointing household spending data for June. The technology (+1.4%) financials (+0.7%), and industrials (+0.4%) sectors provided leadership. NEC Corp (+9.1%), Kansai Electric Power (+8.0%), and FUJIFILM Holdings (+7.9%) topped the list of individual winners. Nicherei Corp (-9.0%), Sumitomo Heavy Industries (-6.4%), and Mitsubishi Motors (-5.0%) paced the decliners. Out of the 225 index members, 137 ended higher, 76 finished lower and 12 were unchanged. For the week, the Nikkei gained 0.2% and for the month it was up 1.7%. 
  • Hong Kong's Hang Seng jumped 0.6%, scoring the bulk of its gains in a closing volley of buying interest that left it near its highs for the session. Galaxy Entertainment (+5.6%), Sands China (+4.3%), and Power Assets Holdings (+3.1%) were the best-performing stocks while Lenovo Group (-2.7%), Li & Fung (-2.6%), and Cathay Pacific Airways (-1.9%) were the worst. Out of the 50 index members, 31 ended higher, 17 finished lower, and 2 were unchanged. For the week, the Hang Seng declined 2.0% and for the month it was down 6.2%. 
  • China's Shanghai Composite declined 1.1%, suffering most of its losses in the final hour of action. Securities regulators are reportedly looking into the influence of automated trading on market activity, according to Reuters. For the month, the Shanghai Composite declined 13.4%. 
Major European indices trade in mixed fashion with Spain's IBEX (-0.8%) trailing the region. The International Monetary Fund will not take part in another Greek bailout unless the package includes an explicit agreement regarding debt relief, according to reports.
  • Economic data was plentiful: 
    • Eurozone July CPI +0.2%, as expected, while core CPI +1.0% (consensus 0.8%; prior 0.8%). Separately, the Unemployment Rate held at 11.1%, as expected 
    • Germany's June Retail Sales -2.3% month-over-month (expected 0.3%; prior 0.4%); +5.1% year-over-year (consensus 4.0%; last -1.0%) 
    • France's June Consumer Spending +0.4% month-over-month (consensus 0.6%; last 0.1%) while June PPI -0.2% month-over-month (last -0.5%) 
    • Italy's June PPI -0.2% month-over-month (prior 0.2%); -2.3% year-over-year (last -1.9%). Separately, July CPI -0.1% month-over-month (consensus 0.0%; prior 0.2%); +0.2% year-over-year (expected 0.3%; last 0.2%). Also of note, June Unemployment Rate rose to 12.7% from 12.5% (expected 12.3%) 
    • Spain's Business Confidence slipped to -0.9 from -0.1 (expected 1.5) 
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  • UK's FTSE trades higher by 0.2%. Consumer names outperform with ITV, Persimmon, and Barratt Developments up between 1.8% and 2.5% while miners lag. Antofagasta, Anglo American, Glencore, Randgold Resources, and Fresnillo are down between 2.0% and 4.1%. 
  • Germany's DAX trades flat. Basic materials outperform with K+S, HeidelbergCement, Linde, and BASF holding gains between 0.9% and 4.1%. 
  • In France, the CAC trades higher by 0.4% with defense contractors in the lead. Airbus and Safran hold respective gains of 4.3% and 2.0% while exporters also hold gains. Peugeot has climbed 1.6% while Renault trades up 0.2%. 
  • Spain's IBEX trails the region with a loss of 0.8% despite better than expected results from the financial sector. Banco Popular, Caixabank, BBVA, and Santander are down between 1.5% and 4.1%.

8:31 am: [BRIEFING.COM] S&P futures vs fair value: +1.10. Nasdaq futures vs fair value: +2.20. The S&P 500 futures trade one point above fair value.

The Q2 Employment Cost Index rose 0.2% while the Briefing.com consensus expected an increase of 0.6%.

7:56 am: [BRIEFING.COM] S&P futures vs fair value: -2.30. Nasdaq futures vs fair value: -3.30. U.S. equity futures trade near their pre-market lows after slipping to these levels within the past hour. The S&P 500 futures hover two points below fair value after trading inside a seven-point range throughout the night.

Similar to equity futures, Treasuries hold modest losses with the 10-yr yield higher by a basis point at 2.27%.

The Q2 Employment Cost Index will be released at 8:30 ET (Briefing.com consensus 0.6%) while the Chicago PMI for July (consensus 50.5) will be reported at 9:45 ET. The day's data will be topped off with the 10:00 ET release of the final reading of the Michigan Sentiment index for July (consensus 94.0).

In U.S. corporate news of note:

  • Amgen (AMGN 175.00, +3.31): +1.9% after beating estimates and raising its guidance. 
  • ArcelorMittal (MT 8.98, +0.11): +1.2% following better than expected results. 
  • Electronic Arts (EA 70.55, -1.75): -2.4% after cautious earnings/revenue guidance masked better than expected results. 
  • Expedia (EXPE 116.40, +8.79): +8.2% in reaction to results that may not be comparable to estimates. 
  • FireEye (FEYE 45.94, -1.82): -3.8% despite beating estimates and guiding in-line with expectations. 
  • Honda Motor (HMC 33.76, +2.11): +6.7% after beating estimates and guiding below analyst expectations. 
  • LinkedIn (LNKD 215.00, -12.15): -5.4% after the company's disappointing revenue guidance overshadowed better than expected results. 
Reviewing overnight developments:
  • Asian markets ended mostly higher. Japan's Nikkei +0.3%, Hong Kong's Hang Seng +0.6%, and China's Shanghai Composite -1.1% 
    • In economic data: 
      • Japan's June Household Spending -3.0% month-over-month (expected -0.5%; prior +2.4%); -2.0% year-over-year (expected +1.7%; prior +4.8%). June National CPI +0.4% year-over-year (expected +0.3%; prior +0.5%). July Tokyo CPI +0.2% year-over-year (expected +0.2%; prior +0.3%). June National Core CPI +0.1% (expected 0.0%; prior +0.1%). July Tokyo Core CPI -0.1% (expected 0.0%; prior +0.1%). June unemployment rate 3.4% (expected 3.3%; prior 3.3%). June Construction Orders +15.4% year-over-year (prior -7.4%). June Housing Starts +16.3% year-over-year (expected +2.9%; prior +5.8%) 
      • Hong Kong's June Retail Sales -0.4% year-over-year (prior -0.1%) 
      • South Korea's June Industrial Production +2.3% month-over-month (expected +0.1%; prior -1.6%); +1.2% year-over-year (expected -1.0%; prior -3.0%). Separately, Retail Sales -3.7% month-over-month (expected -0.1%; prior -0.1%) and August Manufacturing BSI Index 73 (prior 67) 
      • Australia's Q2 PPI +0.3% quarter-over-quarter (expected +0.6%; prior +0.5%); +1.1% year-over-year (prior +0.7%). June Housing Credit +0.6% (prior +0.5%) and June Private Sector Credit +0.4% month-over-month (expected +0.5%; prior +0.5%) 
    • In news: 
      • Japanese officials attributed the unexpected decline in Household Spending to poor weather in June. For the record, daily air temperatures in Tokyo oscillated around historical averages throughout the month.
  • Major European indices trade in mixed fashion. UK's FTSE -0.1%, France's CAC +0.4%, and Germany's DAX +0.1%. Elsewhere, Italy's MIB +0.4% and Spain's IBEX -0.6% 
    • Economic data was plentiful: 
      • Eurozone July CPI +0.2%, as expected, while core CPI +1.0% (consensus 0.8%; prior 0.8%). Separately, the Unemployment Rate held at 11.1%, as expected 
      • Germany's June Retail Sales -2.3% month-over-month (expected 0.3%; prior 0.4%); +5.1% year-over-year (consensus 4.0%; last -1.0%) 
      • France's June Consumer Spending +0.4% month-over-month (consensus 0.6%; last 0.1%) while June PPI -0.2% month-over-month (last -0.5%) 
      • Italy's June PPI -0.2% month-over-month (prior 0.2%); -2.3% year-over-year (last -1.9%). Separately, July CPI -0.1% month-over-month (consensus 0.0%; prior 0.2%); +0.2% year-over-year (expected 0.3%; last 0.2%). Also of note, June Unemployment Rate rose to 12.7% from 12.5% (expected 12.3%) 
      • Spain's Business Confidence slipped to -0.9 from -0.1 (expected 1.5) 
    • Among news of note: 
      • The International Monetary Fund will not take part in another Greek bailout unless the package includes an explicit agreement regarding debt relief, according to reports.

5:49 am: [BRIEFING.COM] S&P futures vs fair value: -1.10. Nasdaq futures vs fair value: -1.10.

5:49 am: [BRIEFING.COM] Nikkei...20585.24...+62.40...+0.30%.  Hang Seng...24636.28...+138.30...+0.60%.

5:49 am: [BRIEFING.COM] FTSE...6661.16...-7.20...-0.10%.  DAX...11263.43...+6.30...+0.10%.

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