Opening Comment — March 30, 2017
S&P 500: 2,361.10
Nasdaq Composite: 5,897.50
Stock index futures are indicating a lower open Thursday. The Dow is down 0.1% in pre-market action. The S&P 500 and the Nasdaq 100 are also trading 0.1% below fair value on GLOBEX.
The U.S. equity market is poised to decline following this morning’s economic data releases. The Commerce Department revised fourth-quarter GDP to a 2.1% annualized rate from the previous 1.9% reading and compared to the consensus estimate of 2.0%. Initial jobless claims fell 3,000 in the most recent week to 258,000, less than a projected decrease to 247,000. Investor attention will likely shift towards monetary policy with scheduled speeches from Regional Fed Presidents Loretta Mester, Robert Kaplan and John Williams.
Shares of Lululemon are dropping 21.6% to $52.00 after the yoga apparel retailer posted disappointing earnings results and current quarter guidance. VF Corp is slipping 0.5% to $55.93 after the company unveiled its five-year growth plan and announced a $5 billion share buyback. In M&A news, ConocoPhillips is gaining 8.2% to $49.60 after agreeing to sell assets to Cenovus Energy for $13.3 billion.
European markets are mixed at midsession. The FTSE is down 0.2% in London. The DAX is up less than 0.1% in Frankfurt. In Asia overnight, the Nikkei declined 0.8% in Tokyo. China’s Shanghai Composite was 1.0% lower on the session.
Treasuries are lower following the U.S. GDP report. The benchmark 10-year note is off 4/32 to yield 2.39%. In commodities, NYMEX WTI crude is up 0.6% to $49.82/barrel. COMEX gold is losing 0.6% to $1246.60/ounce.
Midday Comment — March 30, 2017
DJIA: 20,703.25, up 43.93
S&P 500: 2,365.94, up 4.81
Nasdaq Composite: 5,902.79, up 5.24
Stocks are higher at midsession Thursday. The Dow is up 44 points to 20703. The S&P 500 is gaining 5 points to 2365. The Nasdaq Composite is increasing 5 points to 5902.
The major averages are in positive territory after some generally encouraging data on the U.S. economy. Before the open, fourth-quarter GDP was revised to a 2.1% annualized rate from 1.9% and better than the consensus estimate of 2.0%. A separate report showed weekly initial jobless claims fell 3,000 to 258,000, less than a projected decrease to 247,000. On the Fed front, Cleveland Fed President Loretta Mester said during a speech this morning that she is in favor of several interest rate hikes this year.
Eight of 11 S&P 500 sectors are up in the session. Financials are the best performing group led by banks. Citigroup is 1.5% higher at $60.29. Energy is also providing a lift to the market. ConocoPhillips is climbing 8.6% to $49.92 as oil advances and after announcing the sale of assets to Cenovus Energy for $13.3 billion. Utilities are down the most as NextEra Energy falls 1.6% to $128.52. Shares of Lululemon are plunging 22.7% to $51.28 following the yoga apparel retailer’s reduced guidance.
Breadth is positive on issues by 13-9 on the NYSE; 7-6 on the Nasdaq. Composite NYSE volume is more than 1.2 billion shares.
Treasuries are lower with the benchmark 10-year note down 9/32 to yield 2.41%. In commodities, NYMEX WTI crude is gaining 1.7% to $50.35/barrel. COMEX gold is retreating 0.4% to $1248.40/ounce.
Closing Comment — March 29, 2017
DJIA: 20,659.32, down 42.18
S&P 500: 2,361.13, up 2.56
Nasdaq Composite: 5,897.55, up 22.41
Stocks finished mixed Wednesday. The Dow lost 42 points to 20659. The S&P 500 inched up 2 points to 2361. The Nasdaq Composite gained 22 points to 5897.
The major averages fluctuated throughout the session after the U.K. formally triggered its “Brexit” from the European Union. The move begins what could be a two-year process of exit negotiations. On the data front, a report showed pending home sales reached a 10-month high as contracts rose 5.5% in February, above projections for a 2.5% increase.
Six out of 11 sectors in the S&P 500 finished Wednesday in the red with Financials and Utilities shares underperforming. Energy shares advanced in sympathy with a 2.2% gain in WTI crude to $49.45/barrel. The catalyst for the climb was a report from the EIA which showed a smaller-than-anticipated build in U.S. crude inventories last week. On the earnings front, Restoration Hardware surged 14.9% to $43.65 after providing upbeat forward guidance. Dave and Busters lost 3.4% to $60.09 after the company missed Wall Street same-store-sales expectations. WebMD Health shares jumped 7.1% to $53.79 on reports that the company is exploring a possible sale.
Breadth was positive on issues by roughly 3-2 on both the NYSE and Nasdaq. Composite NYSE volume was more than 3 billion shares.
Treasuries bounced back from yesterday’s decline with the benchmark U.S. 10-year note gaining 10/32 to yield 2.38%. Gold lost 0.2% to $1252.80/ounce on the COMEX as the U.S. dollar strengthened modestly against its major currency peers.
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