Opening Comment — June 28, 2017
DJIA: 21,310.7
S&P 500: 2,419.4
Nasdaq Composite: 6,146.6
Stock index futures are indicating a higher open on Wednesday. The Dow, S&P 500 and Nasdaq 100 are all trading 0.3% above fair value on GLOBEX.
The major averages are poised to advance as technology stocks attempt to rebound from its latest pullback. Despite the recent weakness, the Technology sector in the S&P 500 is up almost 20% this year, twice as much as the benchmark index. On the data front, wholesale inventories rose 0.3% in May, slightly above expectations.
In earnings, General Mills is adding 1.5% to $56.35 as the food maker beat estimates on the top and bottom lines. Shares of KB Home are up 0.5% to $22.93 after the company posted double-digit increases in net order value, backlog, and deliveries.
European markets are declining near mid-session with the broad Euro STOXX 600 down 0.4%. The euro experienced its biggest one-day gain against the dollar in yesterday’s session after European Central Bank President Mario Draghi hinted the ECB might start winding down its stimulus in response to accelerating growth in Europe. Eurozone bond prices retreated amid Draghi’s remarks. In Asia, Japan’s Nikkei 225 fell 0.5% as the Technology sector slid almost 2% on the session. Chinese equities finished lower with the Shanghai Composite losing 0.6% as the yuan continued to rise on speculation of central bank intervention.
Treasuries are fluctuating with the benchmark 10-year note down 4/32 to yield 2.22%. In commodities, NYMEX WTI crude is losing 0.5% to $44.00/barrel. In FOREX, the Dollar Index is falling 0.2%.
Midday Comment — June 28, 2017
DJIA: 21,453.65, up 142.99
S&P 500: 2,438.10, up 18.72
Nasdaq Composite: 6,199.68, up 53.18
Stocks are higher near mid-session on Wednesday. The Dow is up 142 points to 21453. The S&P 500 is adding 18 points to 2438 and the Nasdaq Composite is gaining 53 points to 6199.
The major averages are advancing as investors digest central bank news and economic releases. On the international front, the European Central Bank attempted to clarify comments made by President Mario Draghi on Tuesday. Draghi hinted at the possibility of the ECB winding down its stimulus in response to accelerating growth in Europe. On the data front, wholesale inventories rose 0.3% in May, slightly above expectations. Separately, pending home sales declined 0.8% last month, below estimates of a 1% gain.
Ten of 11 sectors in the S&P 500 are trading in positive territory. In earnings, General Mills is adding 2.2% to $56.75 as the food maker beat estimates on the top and bottom lines. Shares of KB Home are up 3.6% to $23.66 as the company posted double-digit increases in net order value, backlog, and deliveries. In the Materials space, Monsanto is edging higher by 0.9% to $118.31 after topping analyst estimates for its third-quarter results. In Technology, Paychex is losing 2.1% to $57.37 as forward revenue guidance came in below Street forecasts.
Breadth is positive on issues by 5-1 on the NYSE and 3-1 on the Nasdaq. Composite NYSE volume is 1.3 billion shares.
Treasuries are mixed with the benchmark 10-year note down 2/32 to yield 2.21%. In commodities, NYMEX WTI crude is rising 0.6% to $44.53/barrel. COMEX gold is gaining 0.2% to $1249.70/ounce.
Closing Comment — June 28, 2017
DJIA: 21,454.61, up 143.95
S&P 500: 2,440.69, up 21.31
Nasdaq Composite: 6,234.41, up 87.79
Stocks finished higher on Wednesday. The Dow was up 143 points to 21454. The S&P 500 added 21 points to 2440 and the Nasdaq Composite gained 87 points to 6234.
The major averages advanced on the session as Financials rallied and investors digested central bank news. Overseas, the European Central Bank attempted to clarify comments made by President Mario Draghi on Tuesday. Draghi hinted at the possibility of the ECB winding down its stimulus in response to accelerating growth in Europe. On the data front, wholesale inventories rose 0.3% in May, slightly above expectations. Separately, pending home sales declined for the third consecutive month.
Nine of 11 sectors in the S&P 500 ended in positive territory. Financials paced the gains amid the prospect of higher interest rates. Bank of America climbed 2.6% to $23.88 while JPMorgan advanced 2% to $89.82. In earnings, General Mills added 1.6% to $56.42 as the food maker reported better-than-expected quarterly results. KB Home jumped 5.4% to $24.06 after the company posted double-digit increases in net order value and deliveries. In Technology, Paychex lost 1.7% to $57.65 as revenue guidance came in below Street forecasts. Advance Auto Parts slid 4.3% to $116.71 after being the subject of negative analyst commentary.
Breadth was positive on issues by 35-9 on the NYSE and 22-7 on the Nasdaq. Composite NYSE volume totaled 3.4 billion shares.
Treasuries finished mixed with the benchmark 10-year note down 3/32 to yield 2.22%. In commodities, NYMEX WTI crude added 1.1% to $44.74/barrel. In FOREX, the Dollar Index fell 0.4%.
Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly-owned subsidiary of Wells Fargo & Company and provides investment advice to Wells Fargo Bank, N.A., Wells Fargo Advisors, and other Wells Fargo affiliates. Wells Fargo Bank, N.A. is a bank affiliate of Wells Fargo & Company.