Opening Comment — March 21, 2019
S&P 500: 2,824.23
Nasdaq Composite: 7,728.97
Stock index futures are indicating a lower open Thursday. The Dow and S&P 500 are both down 0.3% in pre-market action. The Nasdaq 100 is trading 0.4% below fair value on the GLOBEX.
U.S. equities are poised to decline as investors continue to weigh the Fed’s rate decision. Yesterday, the Federal Reserve left interest rates unchanged, as expected, and signaled for no additional rate hikes in 2019 amid global growth concerns. Meanwhile, trade headlines are weighing on sentiment after President Trump noted yesterday tariffs on Chinese goods will remain for a “substantial period of time” ahead of high level trade negotiations planned for next week. On the data front, initial jobless claims ticked down more than anticipated to 221,000 in the most recent week. A separate release from the Fed’s Philadelphia district showed manufacturing activity in the region rebounded in March.
In corporate news, Micron is adding 3.7% to $41.60 after beating analyst expectations on both the top and bottom line, and providing an optimistic industry outlook. Biogen is tumbling 26.2% to $236.76 after revealing disappointing late-stage trial results for its Alzheimer’s drug.
European markets are mixed near mid-session. The Euro STOXX 600 down 0.6%, while the U.K.’s FTSE 100 is advancing 0.3%. Overnight in Asia, China’s Shanghai Composite added 0.4%, while Japan’s markets were closed for a holiday.
Treasuries are strengthening with the yield on the 10-year note down two basis points to 2.51%. In commodities, NYMEX WTI crude is losing 0.6% to $59.87/barrel. COMEX gold is adding 1.1% to $1,316.40/ounce despite a stronger dollar.
Midday Comment — March 21, 2019
DJIA: 25,971.04, up 225.37
S&P 500: 2,850.26, up 26.00
Nasdaq Composite: 7,814.31, up 85.35
Stocks are higher near midsession Thursday. The Dow is jumping 225 points to 25,971 while the S&P 500 is gaining 26 points to 2,850. The Nasdaq Composite is climbing 85 points to 7,814.
U.S. equities are advancing as a surge in Technology shares is providing a tailwind to the market. Monetary policy remains in focus after the Federal Reserve left interest rates unchanged and signaled for no additional hikes in 2019, citing global growth concerns. On the data front, initial jobless claims fell more than anticipated to 221,000 in the most recent week. A separate release from the Fed’s Philadelphia district showed manufacturing activity in the region rebounded in March. Another update revealed the U.S. leading economic index ticked up 0.2% in February.
Ten of 11 S&P 500 sectors are in positive territory with Technology shares pacing the gains. Shares of Micron are jumping 7.1% to $42.99 while Apple is advancing 3.5% to $194.70. Financials are the lone laggard as a sharp downturn in Treasury yields is pressuring bank stocks. In corporate news, Biogen is tumbling 27.1% to $233.84 after revealing disappointing late-stage trial results for its Alzheimer’s drug.
Breadth is positive on issues by 11:3 on the NYSE and 7:3 on the Nasdaq. Composite NYSE Volume is more than 1.3 billion shares.
Treasuries are strengthening with the yield on the 10-year note down one basis point to 2.52%, the lowest level since January 2018. In commodities, NYMEX WTI crude is losing 0.1% to $60.17/barrel. COMEX gold is adding 0.7% to $1,310.70/ounce despite a stronger dollar.
Closing Comment — March 20, 2019
DJIA: 25,745.67, down 141.71
S&P 500: 2,824.23, down 8.34
Nasdaq Composite: 7,728.97, up 5.02
Stocks finished mixed Wednesday. The Dow lost 141 points to 25,745 while the S&P 500 fell 8 points to 2,824. The Nasdaq Composite added 5 points to 7,728.
The major averages fluctuated as investors digested central bank and trade related updates. As widely expected, the Federal Reserve announced its decision to leave interest rates unchanged, and the ‘dot-plot’ showed the majority of policymakers do no project additional rate hikes in 2019. In the post-meeting news conference, Chairman Jerome Powell noted the Fed’s balance sheet ending figure will be “a bit above $3.5 trillion” with the runoff projected to end in September. In geopolitics, President Trump said that tariffs on Chinese goods will remain for a “substantial period of time” ahead of high level trade negotiations planned for next week.
Six of 11 S&P 500 sectors finished in negative territory with Financials underperforming amid a weakness in banks. The Energy group was a notable outperformer with NYMEX WTI crude adding 1.4% to $59.83/barrel after an update showed a sharp drawdown in domestic crude inventories in the prior week. In earnings news, FedEx lost 3.5% to $175.07 after missing analyst earnings estimates and lowering its 2019 profit forecast for the second consecutive quarter, citing slowing global growth.
Breadth was negative on issues by 9:5 on the NYSE and 5:3 on the Nasdaq. Composite NYSE Volume was more than 3.7 billion shares.
Treasuries strengthened following the Fed’s update with the yield on the 10-year note down eight basis points to 2.53%. In commodities, COMEX gold advanced 0.6% to $1,314.40/ounce amid a weaker dollar.