Note: Our nightly “S&P 500 Outlook,Forecast, and Trading plan for TUE 06/19″ – please check back later (usually published between 8:30pm EDT and 10:30pm EDT).
S&P 500 TODAY
THE GIST (“THE WHAT”)
The S&P 500 index opened significantly lower, extending Friday’s losses as trade war concerns escalated after China retaliated with tariffs on U.S. imports late Friday. The index bounced off after registering the day’s low at 2757.12 in the early morning session as Energy stocks gained ground.
Holding a steady momentum, but trading mostly lower, the index closed the trading day near session highs at 2773.87, down 5.79 points and losing 0.21% over previous day’s close.
Holding a steady momentum, but trading mostly lower, the index closed the trading day near session highs at 2773.87, down 5.79 points and losing 0.21% over previous day’s close.
THE DETAILS (The “How & Why”):
The Chinese government announced its plan to impose 25% tariffs on American products starting July 6. This came as a retaliatory move after the Trump administration announced a fresh set of tariffs on Chinese goods valued at $50 billion as a punitive measure for China’s unfair trade policies and theft of American intellectual properties. Materials and Industrials sectors extended Friday’s losses on the back of rising trade tensions, losing 0.26% and 0.38% respectively.
Telecommunication services and Consumer Staples sectors erased Friday’s gains, losing 1.97% and 1.48% respectively. Both these sectors led the day’s declines in today’s session after being the best performing sectors in the Friday’s session. The broader Health care sector also added to the day’s weakness. Biogen Inc. was the worst performer in the index, losing 5.22%, after a rival drug-maker PTC Therapeutics Inc. reported promising results of its experimental drug for spinal muscular atrophy, posing a serious threat to Biogen’s Spinraza, the first drug that was approved to treat this disease.
Financials stocks shed a slight 0.07% as the 10-year Treasury yield settled mostly unchanged at 2.916%. Yields remained volatile throughout the session, looking for direction as investors stayed focused on escalating trade tensions between the U.S. and China. On the other hand, Energy stocks helped limit the day’s losses as oil prices edged up ahead of an OPEC and Non-OPEC members meeting in Vienna later this week. It was the best performing sector, gaining 1.12% with several Energy companies among the top gainers of the day. Utilities and Technology stocks also erased their early session losses, gaining 0.35% and 0.26%.