Opening Comment — April 20, 2018
DJIA: 24,664.89
S&P 500: 2,693.13
Nasdaq Composite: 7,238.06
Stock index futures are indicating a slightly lower opening Friday. The Dow is off less than 0.1% while the S&P 500 is off less than 0.1% in premarket action. The Nasdaq 100 is trading 0.2% below fair value on GLOBEX.
The major averages are set to open little changed as investors weigh positive corporate earnings releases against rising interest rates. A recent run of positive economic data and hawkish fed commentary are cited as the main causes for the spike in treasury yields. In central bank news, Chicago Fed President Charles Evans and San Francisco President John Williams are both set to speak this morning and discuss the U.S. economy. There are no notable data releases scheduled today.
In earnings news, General Electric is rising 5.6% to $14.77 after posting profits above estimates and reaffirming its forward guidance. Honeywell is climbing 1.1% to $149.70 as quarterly revenues topped forecasts and the company raised its full year guidance. Schlumberger is falling 1.4% to $69.30 and State Street is falling 0.5% $103.70 despite both companies revealing quarterly earnings above analyst expectations.
European bourses are mixed at mid-session. The European STOXX 600 is off 0.1% while the DAX is down 0.3% in Frankfurt. The FTSE 100 is adding 0.3% in London. In Asia overnight, the Nikkei lost 0.1% in Tokyo while China’s Shanghai Composite slipped 1.5%.
Treasuries are slightly weaker with the yield on the 10-year note up less than one basis point to 2.91%. In commodities, WTI crude is losing 0.6% to $67.95/barrel. COMEX gold is down 0.3% to $1349.70/ounce.
Midday Comment — April 20, 2018
DJIA: 24,467.88, down 197.01
S&P 500: 2,672.19, down 20.94
Nasdaq Composite: 7,156.44, down 81.62
Stocks are lower near mid-session Friday. The Dow is losing 197 points to 24467 while the S&P 500 is off 20 points to 2672. The Nasdaq Composite is down 81 points to 7156.
The major averages remain on track for weekly gains, but are declining as investors weigh the latest corporate earnings releases against rising interest rates. A recent run of positive economic data and hawkish Fed commentary are cited as the main causes for the spike in Treasury yields. In central bank news, Chicago Fed President Charles Evans said he believes a gradual increase in interest rates remains appropriate given the current environment. There are no notable economic data releases scheduled today.
Ten of 11 S&P 500 sectors are in negative territory. Tech shares are lagging with Apple falling 3.5% to $166.82 amid reports that smartphone demand may be softer than analysts originally predicted. In earnings, General Electric is adding 3.8% to $14.52 after topping profit projections and reaffirming guidance. Honeywell is climbing 0.8% to $150.51 as quarterly revenues topped forecasts and the company raised its full year guidance. Schlumberger is losing 1.2% to $69.44 and State Street is retreating 3.9% $100.08 despite both companies revealing quarterly earnings above analyst expectations.
Breadth is negative on issues by 7:3 on the NYSE and 3:2 on the Nasdaq. Composite NYSE volume is more than 1.4 billion shares.
Treasuries are weaker with the yield on the 10-year note up two basis points to 2.93%. In commodities, WTI crude is gaining 0.1% to $68.37/barrel. COMEX gold is down 0.6% to $1338.60/ounce amid a stronger dollar.
Closing Comment — April 19, 2018
DJIA: 24,664.89, down 83.18
S&P 500: 2,693.13, down 15.51
Nasdaq Composite: 7,238.06, down 57.18
Stocks finished lower Thursday. The Dow lost 83 points to 24664. The S&P 500 fell 15 points to 2693 while the Nasdaq Composite declined 57 points to 7238.
The major averages declined amid a mixed bag of corporate earnings releases and concerns over rising interest rates. On the data front, weekly initial jobless claims fell 1,000 to 232,000, slightly less than expectations to decline to 230,000. A separate report showed the U.S. leading indicators economic index rose for the fifth consecutive month in March with a 0.3% gain.
Nine of 11 sectors of the S&P 500 finished lower. Consumer Staples were down the most as Philip Morris tumbled 15.6% to $86.64 after missing revenue projections. Financials outperformed as American Express added 7.2% to $102.37 after the consumer finance company posted its second biggest quarterly profit in its history. Technology provided a strong headwind to the market as Apple fell 2.8% to $172.80 while NVIDIA dropped 3.1% to $229.04 after a key Asian chip partner Taiwan Semiconductor Manufacturing provided weak forward guidance for the second quarter. Shares of Amazon added 1.9% to $1556.91 after CEO Jeff Bezos revealed prime memberships have surpassed 100 million worldwide.
Breadth is negative on issues by roughly 2:1 on the NYSE and 3:2 on the Nasdaq. Composite NYSE volume is more than 3.2 billion shares.
Treasuries were weaker as the yield on the 10-year note jumped five basis points to 2.91%. In commodities, WTI crude fell 0.4% to $68.20/barrel. COMEX gold is down 0.4% to $1346.20/ounce amid a stronger dollar.
Wells Fargo Investment Institute, Inc., is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.