Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Tuesday, 11/27” will be posted around 8:30am EDT, Tuesday.
THE GIST (“THE WHAT”)
Solidly rebounding from last week’s steep losses, the S&P 500 index rallied on the back of a promising start to the holiday shopping season. Consumer Discretionary led the gains, further fueled by Technology and Energy rebound. Positive news around Brexit deal helped lift sentiment at the open. Gains soon lost steam but regained momentum mid-session to close near session highs at 2673.45, up 40.89 points and gaining 1.55% over previous session’s close. All of the eleven primary sectors traded higher with rising risk appetite in today’s session.
THE DETAILS (The “How & Why”):
Retail and departmental chain stocks were among the best performers of the session, lifting the Consumer Discretionary sector by 2.44%. Newell Brands Inc. soared 8.19% after the consumer-products specialist announced that it has hired a new Chief Financial Officer. Amazon.com Inc. rose 5.28% on prospects of a strong Cyber Monday sales. According to Adobe Analytics Inc., this Cyber Monday could be the biggest online shopping day, registering a double digit increase to $7.8 billion, giving a major lift to the e-commerce giant.
General Motors Company further boosted the broader sector, rising 4.79% on news of a major restructuring. The automaker announced its plan to slash workforce in its North American plant and cut its production of its slow-selling traditional gas-powered sedans. Wynn Resorts Ltd. and L Brands Inc. were the other strong gainers within the sector, up 6.89% and 6.74%.
FAANG stocks staged a strong rebound, led by Amazon.com Inc. Technology and Communication Services sectors rose broadly by 2.25% and 1.93%. Facebook Inc., Apple Inc., Netflix Inc. and Alphabet Inc. gained 3.53%, 1.35%, 1.01% and 2.51%, respectively in today’s broad-based rally. NVIDIA Corp was the top gainer within the Technology sector, up 5.55% after Credit Suisse indicated that the chipmaker presents an attractive buying opportunity, citing its sharp decline over the last two months.
With a rise in risk appetite, yields edged higher as investors sold-off safe-haven bonds in favor of risky equity assets, benefiting Financials stocks. The Financials sector was another strong performer of the session, up 2.10%. Investors will be looking forward to the release of the latest meeting minutes of Federal Reserve and Chairman Jerome Powell’s speech this week, looking for clues of the central bank’s monetary approach given the volatility in equity markets.
Other modest gainers of the session were Energy, Materials and Industrials, up 1.72%, 1.19% and 0.84% respectively. Oil prices bounced back, holding on the psychologically important $50/b price level after hitting their lowest levels in more than a year, benefiting energy stocks. Investors will be keenly looking forward to the highly awaited meeting between the OPEC and its trading partners on December 6, expecting a production cut to curtail the global supply glut.