Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Friday, 11/30” will be posted around 8:30am EDT, Friday.
THE GIST (“THE WHAT”)
Ending its three-days winning streak, the S&P 500 index closed the session lower as investors turn their focus on trade related issues ahead of the highly awaited G-20 summit this weekend. Technology sector was the biggest drag on the index. The 10-year Treasury yield edged below the 3% mark after the release of FOMC minutes that reconfirmed its plan to continue with rate hikes next year, albeit noting the need to be flexible with its monetary policy, weighing down on Financials stocks.
Trading lower for most part of the session, the index gained an upwards momentum and moved into positive territory after the anxiously awaited FOMC minutes release. Gains were however erased in the last hour of the session with the return of trade jitters. With five out of the eleven sectors lower for the day, the index closed off of session lows at 2737.76, down 6.03 points and losing 0.22% over previous session’s close.
THE DETAILS (The “How & Why”):
Technology sector was the worst performer in today’s volatile session, down a modest 0.95%. Semiconductor stocks were broadly lower as investors look forward to the highly awaited meeting between President Trump and Chinese President Xi Jinping at the G-20 summit this weekend. Western Digital Corp., Twitter Inc. and Seagate Technology were the worst performers within the sector, down 5.46%, 4.37% and 3.29%, respectively.
The FOMC minutes release in the afternoon reaffirmed the central bank’s plan to continue with the rate hikes for the next year as long as the job market and inflation data stayed in line with the expectations. It, however, reiterated the need to be flexible in its monetary policy, sending the 10-year Treasury yields under 3% for the first time in two months, hurting Financials stocks to close the session lower by 0.82%.
Retail and departmental chain stocks gave up some of their recent strong gains, dragging the broader Consumer Discretionary sector lower by 0.43%. Homebuilders stocks also traded lower following weaker-than-expected pending home sales numbers that suggested a slowing housing market. Utilities sector was the other notable decliner of the session, down 0.15%, led by a 2.55% decline in PG&E Corp.
On the bright side, Energy sector was the best performer of the session, up 0.59% alongside a rebound in oil prices after hitting below the psychologically important $50/b price level. Exploration & production, pipeline and integrated oil companies traded higher on reports that Russia might join OPEC in a production cut to curtail the global supply glut. Communication Services, Materials and Health Care were notable gainers of the session, up 0.36%, 0.55% and 0.30% respectively.