Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Tuesday, 06/18” will be posted around 8:30am EDT, Tuesday.
THE GIST (“THE WHAT”)
A quite session ahead of the key monetary policy announcement by the Federal Reserve lifted the S&P 500 index to close slightly higher following a narrow, choppy price action. Strong gains in blue-chip Technology stocks helped offset weakness in Financials and Material stocks to close a yet another lackluster session at 2889.67, up only 2.69 points above previous session’s close.
THE DETAILS (The “How & Why”):
On the economic data front, the New York Fed’s Empire State manufacturing index posted a record plunge into a negative territory, coming in at negative 8.6 in June compared to the expected reading of positive 10. Treasury yields settled slightly lower following a choppy session, with the 10-year yield closing at 2.085%.
Investors will be keenly looking forward for Fed’s monetary policy decision on Wednesday. While the broader expectation is that the Fed will leave the benchmark rate unchanged for now, investors will be looking for clues for potential rate cuts later this year in the wake of intensifying trade tensions and signs of slowing economy.
Real Estate was the best performing sector in today’s lackluster session benefiting from lower yields, closing 1.12% higher. All of the FANG components traded higher. Facebook Inc. jumped 4.24% to lead the Communication Services space after several analysts cited potential of the social-media’s foray into cryptocurrencies.
Netflix Inc. also rose 3.21% after an analyst at Piper Jaffray expressed optimism that the video streaming giant could beat subscriber growth expectations in the coming quarter. Dish Network Corp. further fueled the gains within this space, jumping 3.86% on reports that it plans to buy the assets that T-Mobile Inc. and Sprint Corp. will have to sell in order to win regulatory approval for their long-pending merger.
Modest gains in Health Care and Energy sectors added to the day’s gains, up 0.47% and 0.91%, respectively. Incyte Corp. was the top gainer of the session, soaring 5.31%. Marathon Oil Corp., Devon Energy Corp., Concho Resources Inc. all rose more than 2% each.
Meanwhile, capping the day’s gains were weakness in Materials and Financials stocks. Chip stocks remained under pressure after Broadcom Inc. revived concerns of falling demand. Advanced Micro Devices Inc., Lam Research Corp and Microchip Technology shed 3.82%, 2.43% and 2.36%. Utilities, Industrials and Consumer Staples were the other laggard of today’s session, posting modest declines of 0.34%, 0.32% and 0.21%, respectively.