Opening Comment — October 17, 2018
DJIA: 25,798.42
S&P 500: 2,809.92
Nasdaq Composite: 7,645.49
Stock index futures are indicating a lower open Wednesday. The Dow is down 0.5%, while the S&P 500 is losing 0.4% in pre-market action. The Nasdaq 100 is trading 0.5% below fair value on the GLOBEX.
The major averages are poised to decline as market participants remain focused on a flurry of corporate profit tallies. On the data front, a report showed housing starts fell 5.3% in September, well below the prior period’s revised 7.1% increase. Separately, building permits dipped 0.6% last month. Meanwhile, the Fed is scheduled to release the minutes from its latest meeting this afternoon.
In earnings, Netflix is surging 9.4% to $379.01 after easily topping Wall Street profit estimates and besting forecasts on the key subscriber add metrics. IBM is falling 5.4% to $137.31 after revenue missed analyst expectations for the first time in three quarters. In the Industrial space, CSX is adding 0.5% to $72.55 while United Continental is gaining 5.4% to $88.00 after both companies topped revenue estimates.
European bourses are mostly lower near mid-session. The Euro STOXX 600 is off 0.2% after data revealed the region’s car sales dropped by 24% in September. Elsewhere, the British pound is sliding 0.6% after U.K. inflation data came in lower-than-expected. Overnight in Asia, China’s Shanghai Composite rose 0.6%, while Japan’s Nikkei 225 rallied 1.3%.
Treasuries are little changed with the yield on the benchmark 10-year note down one basis point to 3.15%. In commodities, WTI crude is losing 0.5% to $71.54/barrel. COMEX gold is adding 0.1% to $1,227.30/ounce despite a stronger dollar.
Midday Comment — October 17, 2018
DJIA: 25,735.79, down 62.63
S&P 500: 2,807.43, down 2.49
Nasdaq Composite: 7,626.04, down 19.45
Stocks are lower near mid-session Wednesday. The Dow is losing 62 points to 25735 while the S&P 500 is down 2 points to 2807. The Nasdaq Composite is off 19 points to 7626.
The major averages are declining as investors assess the latest economic and corporate earnings. The pullback follows yesterday’s advance, where all three major U.S. averages notched their best trading session since March. On the data front, a report showed housing starts fell 5.3% in September, well below August’s upwardly revised 7.1% increase. In central bank news, the Federal Reserve is scheduled to release the minutes from its latest policy meeting at 2 PM EST.
Seven of 11 S&P 500 sectors are trading in negative territory near mid-day. Energy stocks are down the most in sympathy with lower oil prices. Consumer Discretionary shares are also underperforming with Lowe’s off 3.0% to $102.81 and Home Depot down 4.3% to $185.18 following respective analyst downgrades. The Communication Services sector is outperforming as shares of Netflix are jumping 5.8% to $366.20 after the media giant easily bested new subscriber estimates.
Breadth is negative on issues by roughly 2:1 on both the NYSE and Nasdaq. Composite NYSE volume is more than 1.3 billion shares.
Treasuries are little changed with the yield on the benchmark 10-year note down one basis point to 3.15%. In commodities, WTI crude is losing 2.6% to $70.05/barrel after a government update revealed a 6.5 million barrel build-up in U.S. crude stockpiles in the prior week. COMEX gold is down 0.1% to $1,225.90/ounce amid a stronger dollar.
Closing Comment — October 17, 2018
DJIA: 25,706.68, down 91.74
S&P 500: 2,809.21, down 0.71
Nasdaq Composite: 7,642.70, down 2.79
Stocks ended lower Wednesday. The Dow lost 91 points to 25706 while the S&P 500 fell less than a point to 2809. The Nasdaq Composite slipped 2 points to 7642.
The major averages declined as investors assessed the latest economic updates and corporate earnings results. Today’s modest pullback followed Tuesday’s advance, where all three major U.S. averages notched their best trading session since March. On the data front, a report showed housing starts fell 5.3% in September as Hurricane Florence led to a slowdown in activity. In a separate release, weekly mortgage applications fell 7.1%, the lowest level since December 2014.
Seven of 11 S&P 500 sectors finished in negative territory. Energy stocks underperformed as WTI crude lost 2.6% to $70.05/barrel, touching its lowest price in a month after a government update revealed a larger than expected build in U.S. inventories. Tech shares also lagged with IBM down 7.6% to 134.05 after posting a decline in quarterly revenue. The Communication Services sector outperformed as shares of Netflix jumped 5.3% to $364.70 after the media giant topped both domestic and international new subscriber estimates.
Breadth was negative on issues by roughly 2:1 on the NYSE and even on the Nasdaq. Composite NYSE volume was more than 3.2 billion shares.
Treasuries weakened along the curve following the release of the Federal Reserve minutes from its latest policy meeting. The statement reiterated the FOMC’s optimistic view of the U.S. economy. The yield on the 10-year note gained three basis points to 3.19%. COMEX gold lost 0.3% to $1,223.70/ounce amid a stronger dollar.