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SPY’s Rally Stalled at 0.09% Fall despite Upbeat Economic Data

Renee Blakely

Healthcare Weighed Down SPY while Johnson Matthey Lifted EWU

SPY ended slightly lower

The SPDR S&P 500 ETF (SPY) and the Direxion Daily S&P500 Bull 3X ETF (SPXL) fell 0.09% and 0.27%, respectively, on Thursday, November 19, 2015. The US Bureau of Labor Statistics released its weekly report on jobless claims for the week ended November 14, 2015. According to the report, the labor market remained solid as new jobless claims fell 5,000 below the prior reading. New claims came in at 271,000 for the November 14 week as compared to 276,000 in the prior week. A falling trend in jobless claims suggests improving labor market condition.

Release of survey data

The graph above presents a snapshot of various market aspects on November 19, 2015. The day saw the release of the Philadelphia Fed’s Business Outlook Survey for November 2015. According to the report, the level of the general business conditions index rose to 1.9 in November, beating the consensus estimate of 0.0 and surpassing the prior reading of -4.5 that signified contraction in industrial activity. The positive outcome of the above indicator buoyed investors’ confidence in the US economy. Hence, the prices of government bonds rose in the wake of the economic data and ahead of the Fed’s policy meeting in December 2015.

Market overview

In the graph above, the US dollar is represented by the PowerShares DB US Dollar Bullish ETF (UUP), oil is represented by the United States Oil Fund (USO), and gold is represented by the SPDR Gold Trust (GLD). The total bond market is represented by the Vanguard Total Bond Market ETF (BND) while volatility is represented by the Volatility S&P 500 Index.

The concerns due to the supply glut in oil led to the fall of oil prices on the day. US crude oil slid to $40.5 per barrel, impacting the energy sector. Lowered oil prices led to the fall in the energy sector that weighed heavily on SPY. Meanwhile, a fall in the US dollar benefited companies with large overseas sales.

Also, precious and industrial metals saw a rise in their respective prices. This benefited material stocks such as Alcoa (AA), Newmont Mining (NEM), Owens-Illinois (OI), and Ball Corporation (BLL). These stocks rose 4.2%, 2.4%, 0.5%, and 0.1%, respectively, on November 19.

Next, let’s look into the performances of the component sectors of the SPDR S&P 500 ETF (SPY) on November 19.

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