Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Friday, 06/14” will be posted around 8:30am EDT, Friday.
THE GIST (“THE WHAT”)
A solid rebound in oil prices helped lift the S&P 500 index to close higher for the first time in three days. Gains, however, remained capped amid investor caution ahead of the keenly awaited G20 Summit wherein President Trump is expected to meet Chinese President Xi Jinping. Ten out of the eleven primary sectors traded higher, with Energy stocks leading the advances.
Price action remains choppy and range bound amid lingering trade uncertainties and several geopolitical headlines risks. Whipsawing within a relatively narrow range, the index took a sharp leg higher during the last few minutes of trading to close near session highs at 2891.64, up 11.80 points and gaining 0.41% over previous session’s close.
THE DETAILS (The “How & Why”):
Oil prices bounced back from their 5-month lows on concerns of a disruption in crude oil supply following reports that two oil tankers in the Gulf of Oman were attacked. Energy stocks were broadly higher to lead the day’s advances by 1.25%. Cimarex Energy Co., Schlumberger Limited and TechnipFMC PLC were the top gainers in the sector, gaining 4.21%, 3.40% and 3.53%, respectively. Devon Energy Corp., Concho Resources Inc. and Hess Corp rose more than 2% apiece.
Communication Services sector received a strong boost from a 4.44% jump in Walt Disney Company after Morgan Stanley raised its price target citing potential of the entertainment company’s new streaming services that could boost its global subscriber base. Centurylink Inc was the other strong gainer within this space, up 3.53% on announcing significant investment in South Florida.
Airlines, transportations and retail stocks were strong performers of today’s session, lifting Consumer Discretionary space. American Airlines Group Inc. was the top gainer of the session, soaring 6.40% following positive comments by JPMorgan that the airline’s recent hike of domestic fares highlights resilience in travel demand.
Industrials, Materials and Financials were the other notable gainers in today’s broad-based rally, closing with modest gains of 0.54%, 0.58% and 0.23%, respectively. Meanwhile, treasury yields edged lower on the back of rising geopolitical tensions in Middle East and rising expectations of a rate cut by Federal Reserve. Weekly jobless claims came in above expectations at 220,000, compared to the expected figure of 218,000.
Defensive stocks lagged the broader index in today’s rally after leading the index higher in the previous session. Utilities, Real Estate and Consumer Staples posted slight gains. Health Care was the only sector to close the session in red, down 0.11%. Alexion Pharmaceuticals Inc. and Eli Lilly and Company dragged the space lower with a 2.83% and 2.97% decline.