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S&P 500 TODAY
S&P 500 TODAY
THE GIST (“THE WHAT”)
The S&P 500 index opened a politically charged week by extending last week’s strong gains. Reaching the day’s high at 2790.21 in early session, the index traded within a narrow range thereafter but held on to the gains. It pulled back in the last half hour of the session as investors focused their attention on the highly awaited and a historic summit between North Korean leader Kim Jong Un and President Trump, ending the session mostly unchanged at 2782, up 2.97 points and gaining a slight 0.11% over previous day’s close.
THE DETAILS (The “How & Why”):
The market shrugged off trade concerns that escalated after the U.S. made an early exit from the G7 Summit this weekend and a spat erupted between President Trump and the Canadian Prime Minister Justin Trudeau. Consumer Staples sector led advances in today’s session with a 0.77% gain, building up on last week’s rally. Telecommunication services and Consumer Discretionary were the next best performing sectors, gaining 0.67% and 0.37% respectively.
Expected supply disruptions in Iran and Venezuela lifted oil prices, boosting Energy stocks. Sempra Energy soared 15.54% to be the top gainer in the index, following news that Elliot Management and Bluescape Energy have partnered to overhaul the company’s board and plan to conduct a strategic review of the company.
The day’s gains were capped by a 0.33% and 0.28% loss in Utilities and Financials stocks respectively. The 10-year Treasury yield settled mostly unchanged at 2.95%, looking past the ongoing Treasury auctions as investors keenly look forward to a week filled with policy changing and politically charged events that could be a catalyst in defining the market direction for the short term.
While the market expects a quarter-point rate hike announcement post the 2-day FOMC meeting, investors will be taking clues for further rate hikes in the coming year as rising inflation and tightening labor could put the Federal Reserve on a more aggressive path.
Further potential market-moving event could be the ECB policy announcement this week with an expected rate hike. The central bank is also expected to end its massive monthly bond-purchasing program citing the strength in the Eurozone.