Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan” will be posted around 9:00am EDT, every trading day.
For the Outlook, Forecast, and Trading Plans published this morning, please click here.
THE GIST (“THE WHAT”)
The S&P 500 index snapped a strong 4-day winning streak and closed a choppy session slightly lower, albeit registering record intraday highs and with a third straight weekly gain of 2.20%. The index rocketed higher to hit a fresh new intraday high of 2964.15 following reports that Vice President Mike Pence will postpone his address on China trade policy ahead of the expected meeting between President Trump and his Chinese counterpart Xi Jinping at the G20 Summit in Japan next week.
Early gains were, however, erased after the Trump administration imposed new restrictions of technology exports of five big Chinese supercomputer making companies. Flirting with Thursday’s all-time highs and oscillating between small gains and losses for most part of the afternoon session, the index pulled back in the last few minutes of trading to close slightly lower at 2950.46, down 3.72 points and losing 0.13%.
THE DETAILS (The “How & Why”):
The 10-year Treasury yield bounced back after falling below 2% level in the previous session, settling at 2.063%. Sector-wise performance was mixed with Real Estate posting worst declines alongside stabilizing yields, down broadly by 1.10%. Industrials, Technology and Materials gave back some of the previous session’s strong gains. Consumer Discretionary, Consumer Staples and Financials also added to the day’s losses.
Chip stocks led the losses in the Technology space on reports of U.S. ban on five Chinese technology companies from buying components from American companies. Advanced Micro Devices Inc., Micron Technology Inc. and Xilinx Inc. posted worst declines of 3.03%, 2.64% and 2.28%, respectively. Qorvo Inc., Intuit Inc and Broadcom Inc. also shed more than 1% apiece.
On the positive side, Energy stocks outperformed the broader index, closing 0.82% higher with oil prices rising for the third session in a row to post its biggest weekly gain in 2 years on concerns of supply disruption amid escalating tensions between the U.S. and China after President Trump threatened Iran of military strikes over several tweets.
Utilities, Health Care and Communication Services were the other modest gainers of today’s choppy session, closing higher by 0.47%, 0.44% and 0.40%, respectively. Humana Inc. was the top gainer of the session, jumping 4.40%. Baker Hughes a GE co. Cl A, CarMax Inc. and PVH Corp. were the other strong performers, gaining more than 3% apiece.