Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan” will be posted around 9:00am EDT, every trading day.
For the Outlook, Forecast, and Trading Plans published this morning, please click here
For the Results of the morning’s Trading Plans, please click here.
THE GIST (“THE WHAT”)
Cautious optimism ahead of the keenly-awaited G20 Summit lifted the S&P 500 index higher to snap a four-day losing streak. Reports that Chinese President Xi Jinping plans to present certain terms for a temporary trade truce lifted investor sentiment at open.
Holding on to early session gains, the index closed near session highs at 2924.92, up 11.14 points and gaining a decent 0.38% over previous session’s close. Ten out of the eleven primary sectors posted modest gains, led by Financials. Energy was the only sector to cap the day’s gains. Meanwhile, Boeing Inc. limited gains within Industrials space on fresh concerns around its controversial 737 Max jets.
THE DETAILS (The “How & Why”):
Treasury yields pulled back slightly amid fading hopes of a potential rate cut in July. The 10-year Treasury managed to settle above the closely-watched 2% level at 2.015%. Financials sector, however, outperformed the broader index, benefiting from rising bank stocks ahead of the release of Fed’s annual stress-test that tests the financial strength of banks. Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and Wells Fargo & Co. all rose more than 1% apiece.
Sliding yields helped lift Real Estate and Health Care sectors to erase their previous session’s sharp losses. Consumer Discretionary stocks were the other notable gainers of today’s session. Conagra Brands Inc., meanwhile, weighed down heavily on Consumer Staples space, tumbling 12.10% on missing earnings expectations. Walgreens Boots Allaince Inc. limited losses within this space, jumping 4.09% after the pharmacy operator posted strong quarterly results on the back of rising prescription drug sales.
Energy stocks gave up some of previous session’s solid gains, despite a rise in oil prices as investors closely monitor developments around U.S. – Iran tensions that could potentially disrupt global crude supplies. EQT Corp, ConocoPhillips and Halliburton Co were the worst decliners within this space, all declining more than 2% apiece.
Meanwhile, Boeing Inc. kept the gains within the Industrials sector capped, falling 2.91% on fresh concerns around its controversial 737 Max planes. The aircraft manufacturer announced that the U.S. Federal Aviation Administration (FAA) has identified new issues with the jet’s software that could further delay the aircraft’s return to service after being grounded following two fatal crashes.