Opening Comment — Friday, January 15, 2021
DJIA: 30,849.18, down 142.34
S&P 500: 3,776.91, down 18.63
Nasdaq Composite: 13,072.62, down 40.02
Stocks Open Lower; Head for Weekly Losses
U.S. stocks are lower in early trading Friday as investors digest the unofficial start to fourth-quarter earnings season and economic data releases. A stimulus announcement from the incoming Biden administration is also in focus, after the President-elect outlined a $1.9 trillion stimulus package on Thursday night. Sentiment is being dampened, however, amid speculation that the increase in government spending could bring about higher taxes. The Dow is slipping 142 points, while the S&P 500 is declining 0.5%. The Nasdaq Composite is off 0.3%.
In earnings, JPMorgan is losing 1.7% after the world's largest bank by market cap topping Wall Street earnings and sales projections. Citigroup is also down 4.3% after the bank missed consensus sales estimates amid a reported 10% drop in revenue. PNC Financial Services Group is falling 1.4% despite beating on the top and bottom line. Breadth is negative on issues by 3:1 on the NYSE and by 2:1 the Nasdaq.
On the data front, retail sales fell 0.7% in December, below consensus estimates of a flat reading but slightly better than the downwardly revised 1.4% decrease reported in November. A preliminary report from the University of Michigan showed consumer sentiment eased to 79.2 in January from 80.7 the prior month. Another release revealed industrial production jumped 1.6% in the final month of 2020, above the November increase of 0.5%. Finally, a gauge of manufacturing activity in the New York Fed region for January unexpectedly fell. Treasuries are advancing, with the 10-year note yield down two basis points to 1.11%.
Closing Comment — Thursday, January 14, 2021
DJIA: 30,991.52, down 68.95
S&P 500: 3,795.54, down 14.30
Nasdaq Composite: 13,112.64, down 16.31
Stocks end lower ahead of Biden's speech
The three U.S. major averages reversed early session gains on Thursday, ahead of a speech from President-elect Joe Biden at 7:15 pm ET. He plans to outline an economic plan, which is widely expected to include additional coronavirus relief aid of around $2 trillion. The Dow fell 68 points, retreating from a fresh record high reached near midday, while the S&P 500 slipped 0.4%. The Nasdaq Composite declined 0.1%. Small caps stocks outperformed, with the Russell 2000 jumping 2%.
Underscoring the need for additional fiscal stimulus was new initial jobless claims data, which showed 965,000 Americans filed for unemployment in the week ending January 9. The figure touched a five-month high and came in well above consensus estimates of 789,000. Elsewhere, Federal Reserve Chair Jerome Powell noted the U.S. central bank would not raise interest rates, unless policymakers saw worrying signs of inflation. Treasuries declined, with the yield on the 10-year note rising four basis points to 1.13%. In commodities, WTI crude rose 1.3% to $53.62/barrel to a fresh 10-month high. Gold lost 0.4% to $1846.90/ounce.
Seven of 11 S&P 500 sectors ended in negative territory, with Technology and Communication Services lagging. In corporate news, BlackRock declined 4.6% despite topping Wall Street's estimates and revealing that assets under management surged to a record $8.68 trillion. Delta Airlines rose 2.5% after its CEO signaled optimism for 2021 following a bigger-than-expected quarterly loss and its first annual loss in 11 years. Johnson and Johnson rose 1.8% after trial data showed its experimental single dose COVID-19 vaccine generated a long-lasting immunity response.
Midday Comment — Thursday, January 14, 2021
DJIA: 31,172.87, up 112.40
S&P 500: 3,815.76, up 5.92
Nasdaq Composite: 13,184.84, up 55.89
Stocks Advance; Dow at Record High Midday
U.S. stocks are higher near mid-session Thursday, as investors await details of President-elect Joe Biden's economic plan. He is widely expected to propose additional coronavirus relief measures that are reportedly worth around $2 trillion. The Dow is rising 112 points, while the S&P 500 is climbing 0.2%. The Nasdaq Composite is advancing 0.4%. Sentiment is also being lifted after Johnson & Johnson said trial data of the company's experimental single dose COVID-19 vaccine generated a long-lasting immunity response.
On the data front, initial jobless claims jumped to 965,000 in the week ending January 9, reaching a five-month high and coming in well above consensus estimates for a 789,000 increase. A separate report showed import prices climbed more-than-anticipated, rising 0.9% in December. Treasuries are little changed, with the yield on the 10-year note holding steady at 1.09%. In commodities, WTI crude is falling 0.2% to $52.83/barrel, on track for a second daily decline. Gold is losing 0.4% to $1847.60/ounce.
Six of 11 S&P 500 sectors are in positive territory, with Energy and Industrials pacing the gains. In corporate news, BlackRock is declining 4.1% despite topping Wall Street's estimates and revealing that assets under management surged to a record $8.68 trillion. Delta Airlines is rising 3.6% after its CEO signaled optimism for 2021 following a bigger-than-expected quarterly loss and its first annual loss in 11 years. Nordstrom is falling 2.8% after noting holiday season sales were down 22% compared to a year ago. Breadth is positive on issues by roughly 3:1 on both the NYSE and the Nasdaq. Composite NYSE volume is 2.2 billion shares.