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”)
In its worst week of the year, the S&P 500 index logged a 5-day losing streak as trade war jitters continued to weigh down on investor confidence. China exposed stocks extended their sharp declines into the second straight session after President Trump threatened China of levying a new round of 10% tariffs on the remaining $300 billion worth of Chinese imports starting September.
Tumbling at the open, the index bounced off the day’s low at 2914.11 and attempted to stabilize for most part of the remaining session. A late-session rally helped to trim losses and close off of session lows at 2932.05, down 21.51 points and losing 0.73% over previous session’s close. Technology, Energy and Materials were the worst performing sectors of today’s sell-off.
THE DETAILS (The “How & Why”):
China-exposed stocks continued to remain under pressure amid intensifying U.S. – China trade tensions. Investors’ flight towards safety pushed the 10-year Treasury further down to their November 2016 lows, settling at 1.846%.
Technology stocks posted the worst decline of the session, closing broadly lower by 1.68%. Software services and semiconductor stocks were the biggest decliners within this space. All of the FAANG components traded lower, with Apple Inc. leading the declines with 2.12%.
NetApp Inc. nose-dived 20.22% after the hybrid cloud specialist warned that its sales for the fiscal 2019 could be well below expectations amid falling global demand for technology hardware. Hewlett Packard Enterprise Co, IPG Photonics Corp and Skyworks Solutions Inc. were the other major decliners, down by 6.15%, 5.93% and 4.16%, respectively.
Trade-sensitive sectors including Materials, Communication Services, Consumer Discretionary and Industrials were sharply lower for the second session in a row. Disappointing earnings posted by Arista Networks Inc. and LyondellBasell Industries N.V. fueled the day’s losses, both plunging by 10.32% and 6.57%, respectively.
Energy stocks remained under pressure in today’s broad-based sell-off, despite oil prices staging a rebound from its biggest one-day decline in four years amid concerns of slowing global growth story. Baker Hughes and Concho Resources Inc. were the worst performers within the Energy space, losing more than 4% apiece. Occidental Petroleum Corp., Marathon Petroleum Corp, Halliburton Co and TechnipFMC also shed more than 3% each. A solid 6.78% jump in Noble Energy Inc., however, capped losses after the Oil and Gas Exploration Company surpassed quarterly revenue estimates.
On the bright side, falling yields helped lift dividend-paying defensive stocks. Real Estate and Consumer Staples closed 0.76% and 0.12% higher, respectively, offsetting some of the day’s weaknesses.
Newell Brands Inc. surged 14.22% after the distributor of consumer and commercial products beat earnings estimates and raised its sales guidance. Fortinet Inc. and Sealed Air Corp. were the other strong gainers the session, climbing 8.90% and 7.73% following better-than-expected quarterly results.