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 last published Results of the Morning Trading Plans, please click here.
THE GIST (“THE WHAT”)
Taking a breather from a strong five-day winning streak that bolstered it to fresh record close, the S&P 500 index hovering around record high levels ahead of a big day of Tech earnings and highly anticipated Fed policy statement release. Flipping between gains and losses, the index managed to eke out a fresh intraday high for second straight session at 3047.87.
The index, however, closed the choppy session slightly lower at 3036.89, down 2.53 points as investors digested a mixed batch of key earnings. Dialing down of trade optimism further capped sentiment. Health Care sector led the advances that were offset by weakness in Technology stocks after Alphabet Inc. issued disappointing results.
THE DETAILS (The “How & Why”):
On the trade front, reports that the much-touted phase one of U.S.-China trade deal may not be ready for signing ahead of the scheduled time dampened sentiment. Technology stocks gave back some of their recent strong gains. A 2.20% decline in Google-parent Alphabet Inc. weighed down on the space after the internet giant surprised investors by issuing a rare profit miss due to heavy spending on hiring and real estate.
All FAANG components closed lower in today’s choppy session. Apple Inc. also slipped 2.31% from its record highs. IPG Photonics Corp. was the worst performer of the session, plunging 13.47% on missing earnings estimates.
On the bright side, Health Care stocks received a solid boost from stronger-than-expected results by Merck & Co Inc. and Pfizer Inc. Both these drug makers jumped 3.53% and 2.49% on beating estimates and raising their guidance. HCA Healthcare Inc. and Incyte Corp were the other strong performers within this space, jumping 6.40% and 4.37% following stronger-than-expected earnings.
Meanwhile, Treasury yields inched slightly lower as Federal Reserve commenced its 2-day monetary policy meeting. While markets are broadly expecting the central bank to follow through the expectations of a third rate cut, investors will be closely looking for signs for further monetary easing. Quarterly results by General Electric Co, Apple Inc. and Facebook Inc. will also remain on the radar.