Note: Our nightly “S&P 500 Outlook,Forecast, and Trading plan for FRIDAY 06/22” – please check back later (usually published around 10:30pm EDT).
S&P 500 TODAY
THE GIST (“THE WHAT”)
With trade tension back on the forefront, the S&P 500 index opened Thursday’s session on a bearish note, falling sharply in the first hour of the session but holding on to its 20 DMA support level (now at 2754.02) and maintaining a steady momentum thereafter.
The index however pulled back in the last hour of the session, falling below the 20 DMA support level it tested two times this week, closing near day’s lows at 2749.46, down 17.56 points and losing 0.63% over previous day’s close. Eight out of the eleven primary sectors ended the day in losses.
THE DETAILS (The “How & Why”):
The Energy sector led the day’s declines, losing 1.96%. Oil prices settled lower ahead of the highly anticipated OPEC and Non-OPEC meeting Friday in Vienna. Markets expect the oil producers to near a deal after months of negotiations to boost oil production for taming the high oil prices. Several energy stocks were amongst the worst performers in the index in today’s session.
Industrials and Materials continue to underperform, losing 1.19% and 0.99%, respectively with escalating trade tensions between U.S. and its key trading partners. While the Telecommunications sector extended its Wednesday’s losses by 0.18%, the broader Technology sector shed their recent gains by 0.80% on the back of profit taking as several blue-chip stocks reached record highs.
The broader Consumer Discretionary sector reversed Wednesday’s gains, losing 0.70% led by several online retailers including Amazon Inc., Wayfair Inc. and eBay Inc., following a Supreme Court ruling that allowed states to collect sales taxes from retail internet companies that do not have a physical presence in their states.
Yields were pushed lower as trade tensions simmer in the background, further hurting Financials stocks. The sector was down by 0.19% as the 10-year Treasury yield inched 4.2 basis points lower, settling at 2.895%. Some of the day’s losses were offset by a 0.62% gain in Real Estate sector that benefitted from falling yields. Defensive stocks like Consumer Staples and Utilities also were up 0.07% and 0.33% for the day. Darden Restaurants Inc. was the top gainer in the index, soaring by 14.79% after reporting better-than-expected results.
On the economic data front, initial jobless claims fell for the fourth week in a row to 218,000, indicating a further tightening in the labor market. The Leading Economic Index came in below expectations at 0.2% for the month of May. On the other hand, the Philadelphia Fed’s Manufacturing Index fell to a 19 month low at 19.9 in June, compared to 34.4 in May.