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 last published Results of the Morning Trading Plans, please click here.
THE GIST (“THE WHAT”)
Mixed bag of economic data, coupled with trade and geopolitical concerns overshadowed optimism over upbeat earnings. Struggling for direction and swinging between gains and losses, the S&P500 index closed today’s wild session lower at 2989.69, down 5.99 points and losing 0.20% over previous session’s close.
THE DETAILS (The “How & Why”):
Trade tensions were back to the forefront after China threatened to retaliate with effective measures to safeguard its sovereignty and development interests in Hong Kong after the U.S. passed a bill favoring protestors in Hong Kong.
Meanwhile, on the economic data front, retail sales fell unexpectedly for the first time in seven months by 0.3% in September as against the expected increase of 0.2%, suggesting softening consumer market that has been considered a backbone of the U.S. economy. Treasury yields edged slightly lower amid renewed concerns of economic slowdown and growing disconnect between U.S. and China.
Energy stocks were the biggest drag on the index, closing broadly lower by 1.49%. Noble Energy Inc., Marathon Petroleum Corp., Halliburton Co and Concho Resources Inc. fell more than 2% apiece. Technology stocks were other major decliners, down 0.71%, led lower by China-exposed semiconductor stocks that gave back some of their recent gains. Lam Research Corp., Micron Technology Inc., Take Two Interactive Software Inc. and Western Digital Corp were all lower by more than 2% each.
On the other hand, Transportation stocks were among the best performers of the session, buoyed by upbeat earnings posted by J.B. Hunt Transport Services Inc. that boosted its stock by 3.63%. Bullish comments by RBC Capital Markets for housing sector lifted homebuilders stocks across the board. Lennar Corp. and Pulte Group Inc. rose 2.41% and 2.47%, respectively.
Extending the trend of strong bank earnings, Bank of America Corp jumped 1.48% on posting better-than-expected quarterly results on the back of strong retail and banking operations that offset losses in trading business. The broader Financials space, however, closed modestly lower for the day alongside falling yields.