S&P 500 TODAY
THE GIST (“THE WHAT”)
The S&P 500 index traded lower during the early session as investors remained cautious ahead of the key G7 Summit underway in Canada. Weakness in Technology stocks further fueled negative sentiment. Losses were trimmed in the afternoon as Consumer Staples stocks gained momentum, leading the index to reach the day’s high at 2779.39. Trading in a tight range thereafter, but holding on to the gains, the index closed near session highs at 2779.03, up 8.66 points, gaining a slight 0.31% over the previous day’s close. The index ended its best week in months with a solid weekly gain of 1.62%.
THE DETAILS (The “How & Why”):
Nine out of the eleven primary sectors ended the day higher. Up for the second straight day, Consumer Staples was the best performing sector, gaining 1.30%, led by Monster Beverage and Mattel Inc. Real Estate and Health-care were also amongst the top gainers of the day, up 0.46% and 0.70% respectively.
The broader Consumer Discretionary gained 0.25%, riding on Evercore ISI’s optimistic view on the Retail industry. Retail stocks had a best week in months after the analyst double-upgraded the stocks of Macy’s Inc., citing strength in the company’s near-term growth prospects, given the increasing cash-flows in the hands of consumers.
While the broader Technology sector ended the session with a slight gain of 0.03%, gains remained capped following reports that Apple Inc. expects a fall in the demand of its iPhone in the coming quarter. Stocks of Apple Inc. and its suppliers, Broadcom Inc. and Taiwan Semiconductor traded low for the day.
Energy stocks erased some of Thursday’s solid gains, losing 0.22%. Crude oil prices pulled back from yesterday’s rally after the EIA reported a rise in U.S. oil production. Reports of a likely increase of oil production by the OPEC and Non-OPEC members later this month also further the negative sentiment on oil prices.
Financial stocks were up 0.26% as yields remained mostly unchanged. The 10-year Treasury yield settled at 2.945%, down 2 basis points as investors remained cautious ahead of the Federal Reserve’s FOMC meeting next week. While the market expects the Federal Reserve to increase rates next week, it will be looking forward to clues of a fourth rate hike this year. Investors will also be closely watching an unprecedented U.S. – North Korea summit scheduled for June 12 in Singapore.