Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Friday, 04/04” will be posted around 8:30am EDT, Friday.
THE GIST (“THE WHAT”)
The S&P 500 extended gains for the sixth straight session, moving closer to the September 2018’s all-time highs, albeit on a choppy price action. Price action was however constrained within a tight range as investors keenly await news around trade negotiations, expecting an end to the year-long trade war with President Trump expected to meet Chinese Vice Premier Liu He at 4:30pm ET.
Struggling for direction for most part of the early session, the index gained an upward momentum in the afternoon session. Grinding higher. the index closed the choppy session near day’s highs at 2879.39, up 5.99 points and gaining 0.21% over previous session’s close. Seven out of the eleven primary sectors traded higher with Materials and Energy leading the advances.
THE DETAILS (The “How & Why”):
Materials lead the index higher for the second session in a row, up 1.01% with mining stocks rising on hopes that the U.S. and China could be inching closer to an end to their year-long trade war. Freeport-McMoRan Inc. was the strongest performer within the sector, gaining 3.04% intraday.
EQT Corporation led the rebound in Energy sector, rising 3.93% as oil prices resumed their uptrend after pulling back in the previous session on reports of a surprise jump in U.S crude stockpiles. Oil prices whipsawed for most part of the session as investors weighed supply tightening by the OPEC against cautious optimism amid ongoing U.S. – China trade negotiations. The broader sector closed the session 0.86% higher.
Consumer Discretionary, Communication Services and Industrials were the other notable gainers of today’s choppy session, closing modestly higher by 0.71%, 0.66% and 0.60%. Constellation Brands Inc., the maker of specialty beer brands was the top gainer of the session, soaring 6.54% on beating fourth-quarter earnings estimates.
Retailers and departmental chain stocks gained broadly on trade optimism, led by a 5.61% jump in Macy’s Inc. Kohl’s Corp., Under Armour Inc. and Hanesbrands Inc., all rose more than 3% each. Meanwhile, Boeing Inc. lifted the Industrials space higher. The aerospace giant jumped 2.89% after its management claimed the new Boeing 737 max software test was a success.
Treasury yields pulled back slightly as investors look forward for Friday’s upcoming jobs report, especially after a weaker-than-expected initial jobless claims numbers that came in at their lowest levels since December 1969, suggesting a tightening labor market.
Among the decliners were Utilities, Real Estate and Health Care, down 0.39%, 0.29% and 0.24%, respectively. Semiconductors also gave back some of their recent strong gains, dragging the broader Technology sector down by 0.44%. Micron Technology Inc., Intuit Inc. and Salesforce.com Inc. fell more than 2% a piece.