Opening Comment — September 30, 2016
S&P 500: 2,151.10
Nasdaq Composite: 5,269.20
Stock index futures are indicating a lower open Friday. The Dow and Nasdaq 100 are down 0.1% in the pre-market. The S&P 500 is trading less than 0.1% below fair value on GLOBEX.
The major averages are poised to end September on a down note on fears Deutsche Bank’s problems may spread throughout the global financial sector. On the economic front, personal income rose 0.2 % in August while spending was flat. Shortly after the open, a report may show manufacturing activity in the Midwest expanded at a faster pace in September. The University of Michigan is expected to revise its sentiment index up to 90.0 from 89.9. At 1:00 p.m. ET, Regional Fed President Robert Kaplan is scheduled to participate on a panel in Dallas.
Costco is gaining 2.1% to $150.64 as quarterly earnings came in above consensus estimates. Spice maker McCormick is rising 2.7% to $99.99 after raising its full-year guidance. Qualcomm is advancing 2.1% to $68.89 on reports it is in talks to buy NXP Semiconductor.
European markets are retreating at midsession. The FTSE is down 0.8% in London. The DAX is shedding 0.8% in Frankfurt. Asian was broadly lower overnight. The Nikkei lost 1.5% in Tokyo. China’s Shanghai Composite rose 0.2% on the session.
Treasuries are higher this morning. The 10-year is up 3/32 to yield 1.55% attributed to investors seeking perceived safety in U.S. government debt. In commodities, NYMEX WTI crude slipping 0.2% to $47.73/barrel. COMEX gold is up 0.1% to $1323.40/ounce.
Midday Comment — September 30, 2016
DJIA: 18,312.98, up 169.53
S&P 500: 2,168.74, up 17.61
Nasdaq Composite: 5,312.03, up 42.88
Stocks are firmly higher at midsession. The Dow is up 170 points to 18312. The S&P 500 is climbing 18 points to 2168 and the Nasdaq Composite is gaining 43 points to 5312.
The major averages are poised to end the third-quarter on a positive note attributed to reports the Department of Justice is close to a settlement with Deutsche Bank over the sale of mortgage-backed securities. On the economic front, personal income rose 0.2 % in August while spending was flat. A separate report showed Midwest manufacturing activity expanded faster than forecasted this month. The University of Michigan’s sentiment reading for September was revised up to 91.1 from 89.8. Attention may turn to commentary from policy makers with Dallas President Robert Kaplan scheduled to speak at 1:00 p.m. ET.
Financials are the best performing group in the session. Bank of America is adding 3.0% to $15.61. Citigroup is increasing 3.1% to $47.20. Energy and Consumer Staples are also pacing the market’s gains. Shares of Chevron are advancing 1.1% to $102.41. Costco is climbing 4.1% to $153.48 after posting quarterly results above consensus. Utilities are down the most as Consolidated Edison retreats 1.7% to $75.22 and Southern Company declines 1.3% to $51.36.
Breath is positive on issues by 3-1 on the NYSE; 14-5 on the Nasdaq. Composite NYSE volume is more than 1.6 billion shares.
Treasuries are weaker as equities advance. The 10-year note is down 10/32 to yield 1.59%. In commodities, NYMEX WTI crude is up 0.4% to $48.01/barrel. COMEX gold is slipping 0.1% to $1320.40/ounce.
Closing Comment — September 29, 2016
DJIA: 18,143.45, down 195.79
S&P 500: 2,151.13, down 20.24
Nasdaq Composite: 5,269.15, down 49.39
Stocks closed lower Thursday. The Dow fell 196 points to 18143. The S&P 500 lost 20 points to 2151 and the Nasdaq Composite dropped 49 points to 5269.
The major averages finished firmly in negative territory led by Financials. J.P. Morgan declined 1.6% to $65.65 and Citigroup retreated 2.3% to $45.80 on concerns problems at Deutsche Bank could spread across the sector. On the data front, second-quarter GDP was revised to a 1.4% annualized rate from 1.1%. Initial jobless claims ticked up 3,000 to 254,000 while pending home sales fell 2.4% in August. Atlanta President Dennis Lockhart said with employment and inflation are nearing the Fed’s stated targets, the economy may be ready higher interest rates.
Along with Financials, Health Care was the biggest drag on the market with Endo International dropping 6.4% to $20.93. Energy was the lone sector up on the session as oil advanced after OPEC reached a preliminary deal to cut production for the first time in eight years. Transocean climbed 6.1% to $10.63 in sympathy with crude’s rise and news activist investor Carl Icahn cut his stake in the company by 75%. ConAgra added 7.2% to $46.25, Pepsi gained 0.4% to $107.76 and Accenture increased 4.3% to $121.64 following their positive quarterly results.
Breadth was negative on issues by 4-1 on the NYSE; 3-1 on the Nasdaq. Composite NYSE volume totaled 4.2 billion.
Treasuries finished up with the 10-year note up 4/32 to yield 1.56%. In commodities, NYMEX WTI crude rose 1.3% to $47.65/barrel. COMEX gold increased 0.1% to $1320.50/ounce.