Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Thursday, 11/15” will be posted around 8:30am EDT, Thursday.

THE GIST (“THE WHAT”)

A wild price action led the S&P 500 index to register five straight days of declines as Apple Inc., the largest stock by market cap remains under pressure amid stock downgrades by several analysts on concerns of waning iPhone demand. Bank stocks further accelerated the day’s declines, falling sharply on prospects of stricter regulations on the banking industry.
Opening higher alongside a rebound in oil prices, gains soon lost steam with Technology stocks and banks stocks weighing down on the broader index. The index, however, attempted to reverse trend in mid-day session after British Prime Minister Theresa May won the backing of her senior ministers on a draft agreement for exiting the European Union, only to be pulled back in the last 30 minutes of trading to close off of session lows at 2701.58, down 20.60 points and losing 0.76% over previous session’s close. Whipsawing within a wide range, nine out of the ten primary sectors closed the session lower with Financials being the biggest laggard.

THE DETAILS (The “How & Why”):

Financials sector was the biggest drag on the index, down 1.37%, led lower by insurance companies on concerns of a significant exposure to claims from the Northern California’s recent wildfires. Progressive Corp was the worst decliner, down 9.48% followed by Citizens Financial Group Inc. and SVB Financial Group, down 3.93% and 3.56% respectively.
Banks stocks also traded lower for the day following reports that Democrat Maxine Waters, the new expected chair of the House Financial Services Committee plans to push for stricter regulations on banking sector, stressing the importance of maintaining a close supervision on financial institutions.
The Consumer Price Index (CPI) data released today indicated that the consumer inflation jumped at its fastest pace in nine months. Investors’ reaction in the bond market was, however, muted amid turbulence in equities. The 10-year Treasury yield settled at 3.126%, slightly lower and weighing down on the broader Financials sector.
Apple Inc. fell for the fifth straight session, down 2.82%, registering a seventh weekly loss and falling briefly into the bear-market territory. The tech-giant was once again beaten down following stock downgrade by Guggenheim Partners and UBS, citing weaker outlook for iPhones sales. Semiconductors, however, outperformed the broader sector to offset some of these declines. Advanced Micro Devices Inc. led the semiconductor rally, soaring 6.12%. The broader Technology sector closed the session lower by 1.29%.
Utilities sector shed 1.13%, led lower by PG&E Corp. The utility company was the worst decliner of the session, tumbling 21.79% after it warned of significant liability beyond its insurance coverage if one of its equipment was found to be the cause of the wildfires ravaging the Northern California.
Consumer Discretionary was dragged lower by retail and departmental stocks. Macy’s Inc. fell 7.18%, on concerns of sustainable growth, despite beating third-quarter earnings estimates. Kohl’s Corp and Nordstrom Inc. also declined 5.43% and 4.40% in-tandem. Industrials, Materials and Consumer Staples were the other notable decliners of the session, down 0.37%, 0.21% and 0.63% respectively.
Oil prices took a pause from a record losing streak of 12 straight sessions following reports that OPEC and its partners are con
sidering a reduction in their crude output by 1.4 million b/d. Energy sector, however, closed slightly lower by 0.11% led by a 5.82% decline in EQT Corp. On the positive side, Communication Services and Real Estate were the only sectors to close the session higher, up 0.46% and 0.04% respectively.