Opening Comment — October 22, 2018
S&P 500: 2,767.78
Nasdaq Composite: 7,449.03
Stock index futures are indicating a higher open Monday. The Dow and S&P 500 are up 0.4% in pre-market action. The Nasdaq 100 is trading 0.8% above fair value on the GLOBEX.
The major averages are poised for a firmly higher open as a rally in Chinese markets overnight helps lift investor sentiment. This morning’s gains come on the heels of a volatile week in which the Dow gained 0.4%, the S&P 500 edged less than 0.1% higher, and the Nasdaq Composite slipped 0.6%. On the data front, the sole update from the Chicago Fed showed that national activity expanded slower than anticipated in September.
In earnings, Kimberly-Clark is rising 3% in pre-market trading after topping consensus earnings estimates and offering a full-year guidance above analyst forecasts. Oilfield services company Halliburton is up 2% after delivering a slight beat on both the top and bottom line. Elsewhere, Hasbro is sliding 7.6% after missing Wall Street earnings and revenue projections.
European bourses are higher near mid-session. The Euro STOXX 600 is adding 0.5% with automakers in the region pacing gains. U.K’s FTSE 100 is up 0.9% ahead of Prime Minister Theresa May’s meeting with lawmakers. Overnight in Asia, China’s Shanghai Composite surged 4.1% to post its best session since March 2016 amid proposed Chinese tax cuts.
Treasuries are higher with the yield on the 10-year note down one basis point to 3.18%. In commodities, WTI crude is adding 0.1% to $69.20/barrel, coming off its second consecutive weekly decline. COMEX gold is down 0.1% to $1,224.50/ounce amid a stronger dollar.
Midday Comment — October 22, 2018
DJIA: 25,288.50, down 155.84
S&P 500: 2,756.75, down 11.06
Nasdaq Composite: 7,477.14, up 28.11
Stocks are mostly lower near mid-session. The Dow is down 155 points to 25288, while the S&P 500 is losing 11 points to 2756. The Nasdaq Composite is adding 28 points to 7477.
The Dow and S&P 500 have given back early gains as investors digest a slew of earnings reports. Lingering trade tensions are also in focus after a report from Axios revealed President Trump does not intend to ease tariffs on Beijing. Overnight in Asia, China’s Shanghai Composite surged more than 4% to post its best session since March 2016 amid proposed Chinese tax cuts. On the data front, the sole update from the Chicago Fed showed that national activity expanded at a slower-than-anticipated pace last month.
Eight of 11 S&P 500 sectors are lower with Energy and Financials down the most. The Healthcare group is also lagging as Bristol-Myers Squibb is falling 5.8% to $51.15 after the pharmaceutical company announced a three-month FDA delay for its new combo-therapy drug. Technology shares are bucking the downtrend as Apple is climbing 1.4% to $222.39 and Microsoft is advancing 1.2% to $109.94. In earnings, Kimberly-Clark is slipping 4.4% to $105.35 despite topping consensus earnings estimates and raising its forward guidance.
Breadth is negative on issues by 8:7 on the NYSE and by 10:9 on the Nasdaq. Composite NYSE volume is more than 1.2 billion shares.
Treasuries are little changed with the yield on the 10-year note flat at 3.19%. In commodities, WTI crude is off 0.2% to $69.99/barrel. COMEX gold is off 0.5% to $1,219.60/ounce amid a stronger dollar.
Closing Comment — October 22, 2018
DJIA: 25,317.41, down 126.93
S&P 500: 2,755.88, down 11.90
Nasdaq Composite: 7,468.63, up 19.60
Stocks finished mixed Monday. The Dow dropped 126 points to 25317, while the S&P 500 slipped 11 points to 2755. The Nasdaq Composite gained 19 points to 7468.
The Dow and S&P 500 erased early session gains as disappointing quarterly earnings releases overshadowed strength in Asia overnight. China’s Shanghai Composite surged more than 4% to post its best session since March 2016 amid proposed Chinese tax cuts. On the data front, the sole update from the Chicago Fed showed national activity expanded at a slower-than-anticipated pace last month.
Nine of 11 S&P 500 sectors closed in negative territory with Financials sliding more than 2.0%. Energy shares also lagged as Halliburton’s earnings weighed on the sector. The oilfield services company fell 3.0% to $36.40 after offering a weak year-end forecast amid a projected slowdown in activity. Strength in Technology shares buoyed the major averages as Microsoft advanced 0.9% to $109.63, and Intel jumped 2.3% to $45.01 following an analyst upgrade. In other earnings, Hasbro slid 3.1% to $95.01 after missing consensus earnings and revenue estimates.
Breadth was negative on issues by 8:5 on the NYSE and 7:5 on the Nasdaq. Composite NYSE volume was more than 3.2 billion shares.
Treasuries were essentially unchanged with the yield on the 10-year note flat at 3.19%. In commodities, WTI crude added 0.1% to $69.17/barrel after touching its lowest point in five weeks. COMEX gold lost 0.3% to $1,221.20/ounce as the U.S. dollar climbed to its best level in two months.