Note: Our nightly “S&P 500 Outlook, Forecast, and Trading plan for Tuesday, 09/11” will be posted around 8:30am EDT, Tuesday.
THE GIST (“THE WHAT”)
Rebounding from a four day Technology-led sell-off, the S&P 500 index closed today’s session with slight gains. Optimism, however, remained capped amid ongoing trade talks between the U.S. and Canada over NAFTA revision. U.S. tariffs on $200 billion worth of Chinese good looms on the horizon, with the Trump administration threatening to impose new round of tariffs on an additional $267 billion of Chinese goods.
Opening higher on the back of rising retail and transportation stocks, the index registered the day’s high at 2886.96 (under one point above the level indicated by our models for a bullish consolidation. Click here to read the full text). Struggling to maintain the gains amid investors’ cautious stand, the index closed off of session highs at 2877.13, up 5.43 points and gaining 0.19% over previous session’s close. 8 out of the 11 sectors closed the session higher, with Utilities and Real Estate sectors leading the day’s advances.
THE DETAILS (The “How & Why”):
Utilities and Real Estate sectors bounced back after leading the declines in previous session. Benefiting from stabilizing yields, these sectors closed the session with modest gains of 0.58% and 0.54%. With the dollar weakening on optimism over Brexit talks, Industrials and Materials stocks also were higher for the day by 0.53% and 0.09%.
United Rentals Inc. was the best performer within the Industrials space, gaining 5.05% on news of acquisition of a privately held BlueLine Rental in an all cash deal. Several transportation and trucking companies were strong gainers in today’s session as investors piled up on these stocks ahead of the arrival of Florence, the first major hurricane of the season. C.H. Robinson Worldwide Inc. and J.B. Hunt Transport Services Inc. were among the best performers of the session, up 3.88% and 3.63%.
Retail and departmental chain stocks extended their gains, lifting the Consumer Discretionary sector higher by 0.35%. Home Depot Inc. and Lowe’s Companies Inc. rallied 2.16% and 2.55% ahead of the major hurricane expected to hit the East coast. Telecommunication and Consumer Staples sectors were the other notable gainers, up 0.49% and 0.35% respectively.
Technology stocks took a breather from last week’s major sell-off, closing the session higher by 0.32%. Semiconductor stocks rebounded from last week’s losses following a downgrade by Morgan Stanley. Apple Inc., however, shed 1.34%. The company was at the receiving end of President Trump’s ire after issuing a warning that the proposed tariffs by the Trump administration could impact their business negatively. In his response, President Trump tweeted over the weekend, urging Apple Inc. to shift its production out of China to the U.S.
On the other hand, Anthem Inc. and UnitedHealth Group Inc. fell 3.42% and 3.19% respectively to drag the broader Health Care sector lower by 0.31%. The broader Financials sector shed a slight 0.08% on concerns of a flattening yield curve. While the 10-year and 30-year Treasury yields settled relatively unchanged on trade policy uncertainties, 2-year Treasury yields registered its highest level since July 2008.