Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Tuesday, 04/29” will be posted around 8:30am EDT, Friday.
THE GIST (“THE WHAT”)
The busiest week of earnings and economic data opened on a positive note with the S&P 500 index logging a new record high daily close. Stronger-than-expected U.S. consumer spending data coupled with a tamed key inflation data helped lift sentiment, which were further supported by positive corporate earnings. Gains were however capped ahead of the week heavy with key earnings and economic data.
Modest gains in Financials and Communication Services sectors helped offset weakness in defensive sectors. With only four out of the eleven primary sectors trading higher for the day, the index closed the relatively quiet session at 2943.03, up 3.15 points and gaining 0.11% over previous session’s close.
THE DETAILS (The “How & Why”):
While the U.S. consumer spending for the month of March rose by the most in more than 9.5 years, the key inflation measure posted its smallest annual gain in 14 months, reinforcing a resilient economy following last week’s surprisingly upbeat GDP data. Treasury yields rose across the board, benefiting banking and financial stocks.
Financials was the best performing sector, closing higher by 0.93%. Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. all rose 2.19%, 1.89% and 1.44% respectively. Investors will be looking forward to the Fed’s latest monetary policy announcement on Wednesday expecting that the central bank will leave the benchmark interest rates unchanged for now.
Communication Services and Industrials sectors were the only other notable gainers of the session, closing modestly higher by 0.85% and 0.27%. C.H. Robinson Worldwide Inc. was the worst decliner of the session, tumbling 7.58% and dragging other trucking stocks lower following reports that Amazon Inc. plans to launch its own online freight-brokerage platform in an attempt to reduce the intermediaries and act as a broker between shippers and truckers. J.B. Hunt Transport Services Inc. and W.W. Grainger were the other major decliners, falling 2.76% and 2.42%, respectively.
Further limiting the day’s gains were defensive stocks, trading lower alongside rising treasury yields. Real Estate was the biggest drag on the index, down 1.06%. Utilities, Consumer Discretionary and Health Care all closed lower by 0.63%, 0.35% and 0.21%, respectively. Oil prices extended its last week’s decline, but pared early session losses, sending Energy stocks lower by 0.25%.