Opening Comment — September 20, 2017
DJIA: 22,370.80
S&P 500: 2,506.70
Nasdaq Composite: 6,461.30
Stock index futures are little changed Wednesday. The Dow is down less than 0.1% in the pre-market. The S&P 500 is fractionally higher and the Nasdaq 100 is trading less than 0.1% below fair value on GLOBEX.
The major averages are poised to open around the flat-line as investors await word from the Fed. With expectations for no change in interest rates, attention will be on the statement released and Chair Janet Yellen’s press conference for indications on monetary policy. Of particular interest will be whether the Fed announces plans to begin reducing the size of its $4.5 billion balance sheet. On the data front, a report may show existing home sales rose 0.2% in August. An earlier release revealed weekly mortgage applications fell 9.7%.
FedEx is down 1.4% to $213.00 after posting disappointing earnings and lowered its profit forecast. Adobe is declining 2.8% to $152.22 following the software maker’s reduced outlook. Retailer Bed, Bath & Beyond is dropping 14.2% to $23.13 as it cut its full-year guidance. Shares of drug maker Pfizer are up 0.9% to $35.78 after positive analyst comments this morning.
Europe is little changed at midsession. The FTSE is up less than 0.1% in London while the DAX slips 0.1% in Frankfurt. In Asia overnight, the Nikkei added 0.1% in Tokyo. China’s Shanghai Composite increased 0.3% on the session.
Treasuries are higher with the benchmark 10-year note gaining 4/32 to yield 2.23%. In commodities, NYMEX WTI crude is advancing 1.0% to $50.02/barrel. COMEX gold is gaining 0.4% to $1312.10/ounce.
Midday Comment — September 20, 2017
DJIA: 22,387.65, up 16.85
S&P 500: 2,507.26, up 0.61
Nasdaq Composite: 6,444.23, down 17.09
Stocks are fluctuating near midsession. The Dow is up 16 points to 22387. The S&P 500 is up less than a point to 2507. The Nasdaq Composite is slipping 17 points to 6444.
The major averages are mixed as investors await the conclusion of the FOMC meeting today. With consensus expectations pointing towards no change in the Federal Funds Rate this afternoon, attention will be on Chair Janet Yellen’s press conference for updates to monetary policy. Of particular interest will be whether the Fed announces plans to begin unwinding the size of its $4.5 trillion balance sheet. On the data front, existing home sales unexpectedly fell 1.7% to the lowest level in a year in August.
Energy is the best performing sector in the S&P 500 while Technology shares are lagging. Apple is off 2.4% to $154.86 following reports that its new watch has issues with wireless connectivity. In earnings news, Adobe is retreating 3.1% to $151.72 following its reduced outlook. General Mills is falling 5.9% to $52.09 after missing profit projections. Bed, Bath & Beyond is dropping 14.8% to $23.00 on its disappointing full-year earnings guidance. FedEx is up 2.8% to $221.96 despite lowering its full year outlook.
Breadth is positive on issues by 11-6 on the NYSE; 4-3 on the Nasdaq. Composite NYSE volume is over 1.2 billion shares.
Treasuries are unchanged with the benchmark 10-year yielding 2.24%. In commodities, NYMEX WTI crude is advancing 1.8% to $50.36/barrel. COMEX gold is gaining 0.4% to $1311.60/ounce. In FOREX, the Dollar Index is sliding 0.2% against its peers.
Closing Comment — September 20, 2017
DJIA: 22,412.59, up 41.79
S&P 500: 2,508.24, up 1.59
Nasdaq Composite: 6,456.04, down 5.28
Stocks finished mostly lower on Wednesday. The Dow was down 41 points to 22412. The S&P 500 gained one point to 2508. The Nasdaq Composite was off 5 points to 6456.
Treasury yields and the dollar rose while equities fluctuated as investors digested the conclusion of the September FOMC meeting. As expected, the U.S. central bank kept the Federal Funds rate unchanged and announced it will begin the process of unwinding its $4.5 trillion balance sheet in October. Additionally, the release suggested that the median forecast still favors another interest rate hike before the end of the year and three more increases in 2018. In the aftermath of the release, the yield on the benchmark 10-year U.S. Treasury note climbed to 2.27%, the highest level since July. At the short end of the curve, the yield on the two-year note rose to a nine-year high of 1.44%.
Seven of 11 sectors in the S&P 500 finished higher on the session with Financials catching a boost after the hawkish Fed commentary. Tech shares lagged with Apple off 1.7% to $156.07 following negative commentary surrounding phone orders and watch issues. In earnings news, Adobe retreated 4.2% to $149.96 while Bed Bath and Beyond retreated 15.9% to $22.74 as each company reduced forward guidance.
Breadth was positive on issues by 7-5 on the NYSE; 13-9 on the Nasdaq. Composite NYSE volume was 3.5 billion shares. In commodities, NYMEX WTI crude advanced 1.9% to $50.41/barrel. COMEX gold fell 0.6% to $1299.40/ounce. In FOREX, the Dollar Index jumped 0.5% to the highest level since January.
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