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”)
Mixed batch of latest earnings drove the S&P 500 index lower for the second straight session as investors keenly await Fed’s key monetary policy decision. Expectations of a trade deal were dampened after President Trump criticized China of not buying U.S. agricultural products to the extent promised.
Opening lower, the index whipsawed within a relatively tight range as investors digested a mixed bag of earnings across sectors. Energy led the day’s advances, while Utilities and Technology stocks dragged the index lower to close the session off of session lows at 3013.18, down 7.79 points and losing 0.26% over previous session’s close.
THE DETAILS (The “How & Why”):
Stronger-than-expected consumer confidence and consumer spending data pushed the Treasury yields slightly higher. The 10-year Treasury yield settled at 2.063%. The Federal Reserve is expected to release its key monetary policy decision tomorrow after a 2-day meeting with broad expectations of a quarter-basis point rate cut for the first time since the financial crisis.
Meanwhile, earnings continued to drive the price action as investors await a rate cut announcement by the Fed. Some of the strong movers under the broader lackluster price action were National-Oilwell Varco Inc., Martin Marietta Materials Inc. and Wabtec, all jumping 11.32%, 9.98% and 9.45%, respectively on better-than-expected quarterly performance.
Energy sector was the strongest performer of the session, up 1.09%, receiving a solid boost from narrower-than-feared quarterly loss posted by National-Oilwell Varco Inc. Oil prices rose more than 2% to hit their two-month high following a seventh straight weekly drop in U.S. crude inventories by 6.024 million barrels. Cimarex Energy Co, Noble Energy Inc. and Devon Energy Corp were the other strong performers in this space, jumping 6.31%, 5.89% and 5.33%, respectively.
Real Estate, Materials and Industrials sectors added to the day’s gains, driven modestly higher by better-than-expected earnings. On the other hand, Utilities, Technology and Communication Services stocks overshadowed these gains, trading lower by 0.77%, 0.70% and 0.67% amid disappointing earnings. Consumer Discretionary, Health Care and Financials also closed lower.
Gartner Inc. weighed down heavily on Technology space, tumbling 19.02% on guiding lower for the 2019 fiscal year citing increasing challenges for its large optical communications business. Under Armor Inc. dragged retail and department chain stocks lower after the athletic-apparel maker plunged 13.69% on missing revenue estimates and issued a gloomy outlook amid falling sales in North America.
HCA Healthcare Inc., DISH Network Corp and PerkinElmer Inc. were the other sharp decliners of the session, falling more than 7% apiece on posting disappointing quarterly results. Meanwhile, Capital One Financial Corp. fell 5.91%, leading the broader Financials sector lower on reports of a largest data breach which compromised close to 106 million customers data of the credit card company.