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
For the Results of the morning’s Trading Plans, please click here.
THE GIST (“THE WHAT”)
As investors brace for a busy week of major earnings and key economic data, the S&P 500 managed to eke out a small gain on the back of a choppy price action, closing fractionally above Friday’s record daily close at 3014.30.
Logging a new intraday high at the open at 3017.80, the index was pulled back alongside rising demand for Treasuries following a gloomy economic data out of China. Chopping within a tight range for most part of the session, the index got a slight boost in the late-afternoon session to close in a positive territory. Energy stocks led the day’s decliners, falling alongside sliding oil prices on concerns of a weakening global demand.
THE DETAILS (The “How & Why”):
Energy stocks were among the worst performers of the session, falling sharply alongside sliding oil prices. China reported that its economy slowed down last quarter to its weakest pace since 1992 amid the ongoing trade spat with the U.S. China’s monthly economic data, however, showed signs of improvement resulting out of the billions of dollars of stimulus in the form of tax cuts.
Oil prices slipped on concerns of weakening global demand, weighing down on Energy stocks. Cimarex Energy Co. and Noble Energy Inc. were the worst decliners within this space, down 4.46% and 4.35%, respectively. Diamondback Energy Inc., Devon Energy Corp, Marathon Oil Corp. and Concho Resources Inc. were the other major decliners, all lower by more than 3% apiece.
Citigroup Inc. kicked off bank earnings, beating revenue and profit estimates primarily resulting out of gains from its recent IPO of electronic bond trading platform Tradeweb. The banking giant’s earnings, excluding the one-time $350 million pretax gain on its Tradeweb IPO, were however mostly muted.
While Citigroup Inc. erased its early session plunge to close flat for the day, JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America all traded lower ahead of their earnings release this week. The 10-year Treasury yield settled slightly lower at 2.092% on signs of weakening global economy.
Industrials were the other notable decliners of today’s choppy session, dragged lower by a 1.02% fall in Boeing Inc. on weekend reports that its 737 Max fleet will remain grounded through this holiday travel season. GE Co. further accelerated losses within in space, declining 0.96% following a stock downgrade by UBS, citing overvaluation and weakness in its power market.
On the bright side, chip stocks and biotech stocks outperformed to boost the broader index higher. Gilead Sciences Inc. led the Health Care space higher, jumping 2.75% on reports that the drugmaker will raise its stake in its partner for developing new drugs targeting inflammatory diseases, Galapagos NV, by almost $5.1 billion.
Advanced Micro Devices Inc. surged 3.55% to hit all-time highs on optimism over its recently launched Ryzen processors that have been gaining traction to overtake market share of Intel’s Core processors. Meanwhile, a sharp 10.68% plunge in Symantec Corp offset gains in the technology space following reports that its merger with Broadcom Inc. has been stalled due to disagreement over valuation.