Note: Our nightly “S&P 500 Outlook,Forecast, and Trading plan for Friday, 06/29” – please check back later (usually published around 9:30pm/10:00pm EDT on Thursday).
S&P 500 TODAY – THURSDAY 06/28
THE GIST (“THE WHAT”)
The S&P 500 index rebounded from Wednesday’s broad-based sell-off as Technology and Financials stocks gained lost ground in the afternoon session. Swinging between slight gains and losses, the index found a strong support at the psychologically important 2700 level during the early session following a lackluster GDP report. Gaining a bullish momentum in the afternoon session, the index registered the day’s high at 2724.34 (just 0.16 points away from the take-profit level indicated by our models in the INTRADAY ALERT – click here for details) led by a strong rally in Technology and Financials stocks.
The index closed at 2716.31 – just about half a point below the 50 DMA which is at 2716.97. The index registered a gain of 16.68 points over yesterday’s close (up 0.62%). Nine out of the eleven primary sectors ended the session with gains. However, confined within our referred-to 2700-2745 trading range for the fourth day in a row, the index has several resistance levels to clear through to get back into the bulls’ territory.
THE DETAILS (The “How & Why”):
Telecommunications sector was the best performing sector in the index, gaining a solid 2.29% led by a 4.22% gain in Verizon Communication Inc. The broader Technology sector also gained a decent 1.08%, erasing some of the losses in Wednesday’s sell-off.
Financials sector ended its longest streak of 13 days of straight losses, gaining 0.86% ahead of the much awaited results of Federal Reserve’s Comprehensive Capital Analysis and Review (CCAR) which evaluates banks on the parameters of capital adequacy, capital planning process and planned capital distributions. Yields inched up in today’s risk-on mood. The 10-year Treasury yield settled slightly up by 150 basis points at 2.84%.
Real Estate and Consumer discretionary sectors edged up 0.86% and 0.76%, respectively. Amazon Inc. announced its plan to acquire PillPack, an online pharmacy for $1 billion, sending its stocks up by 2.47%. This move puts Amazon in direct competition with several drug distributors and drugstore chains. Walgreens Boots Alliance Inc. was the biggest loser in the index, down a sharp 9.90%. McKesson Corp., Cardinal Health Inc. and CVS Health Inc. were also amongst the top losers in the index, weighing down on the broader Health-care sector, which was up by a slight 0.17%.
Materials and Industrials sectors also erased some of the losses of the last session, gaining 0.44% and 0.16% respectively. While defensive Utilities stocks closed lower by only 0.02% as yields inched up, Consumer Staples ended the session higher by 0.17% led by an 8.40% gain in stocks of McCormick & Co., the top gainer in the index today.
Day’s gains were capped by Energy stocks that shed some of the previous session gains, losing 0.12% despite the oil prices soaring to reach their 2018 highs. The first quart
er GDP growth of 2% missed the consensus forecast of 2.2%, primarily due to a decline in health care spending and a fall in inventories buildup. The initial jobless claims for the week rose by 9,000 to 227,000, compared with the estimated 220,000.
er GDP growth of 2% missed the consensus forecast of 2.2%, primarily due to a decline in health care spending and a fall in inventories buildup. The initial jobless claims for the week rose by 9,000 to 227,000, compared with the estimated 220,000.