Note: Our nightly “S&P 500 Outlook,Forecast, and Trading plan for Wed, 07/11” – please check back later (usually published around 9:30pm/10:00pm EDT on Tue).
S&P 500 TODAY – TUE 07/10
THE GIST (“THE WHAT”)
With no major news headlines on the trade war front, the S&P 500 extended its recent rally for the fourth session in a row taking the index to the vicinity of March, 2018 highs (2801.90 on 3/13/18) as investors brace for the second round of quarterly earnings results. The index, however, could not approach the highs as the 2795 level proved to be a strong resistance (index’s session high registered at 2795.58) – just on the lines of our forecast published last night, which said: “For Tuesday, the index is likely to test the strong resistance band of 2795-2805, which could prove tough to break out of.“ (click here to see the full forecast).
Note: Today’s failure to probe deeper into the resistance band cited by our models is a concern and could potentially point to a capping of the bull run. For detailed forecast and trading plan, check back later for our nightly “S&P 500 OUTLOOK”.
Note: Today’s failure to probe deeper into the resistance band cited by our models is a concern and could potentially point to a capping of the bull run. For detailed forecast and trading plan, check back later for our nightly “S&P 500 OUTLOOK”.
Trading sideways in a tight range for most part of the day, the index pulled back during the mid-day session as Financials stocks sold-off ahead of the quarterly earnings release by big banks later this week. The index however closed near session highs at 2793.84, up 9.67 points and gaining 0.35% intraday led by gains in defensive sectors like Consumer Staples and Telecommunication services. 10 out of the 11 primary sectors ended the session higher.
THE DETAILS (The “How & Why”):
Energy stocks led early session gains as oil prices edged up on supply concerns. Sentiment was further boosted after Pepsi Co. kicked off the earnings season with better-than-expected results. Oil prices inched up further on news of Royal Dutch Shell shutting down one of its oilfield off the Norway’s coast led by a strike by workers. The sector extended recent gains by 0.74%.
Consumer Staples was the best performing sector in today’s session, up 1.26% led by a 4.76% gain in PepsiCo Inc. and 2.52% gain in Procter & Gamble Co. PepsiCo Inc. was the top gainer within the broader index, lifting the broader sector after the beverage and snack giant reported its second quarter results that topped expectations.
Telecommunications and Utilities sectors also gained 1.13% and 0.98% respectively. Consumer Discretionary sector got a 0.22% lift after an analyst upgraded Wynn Resorts Ltd from buy to hold. Stocks of this casino operator rose 3.28% to be the second best gainer in the index. Trade sensitive Materials and Industrials sectors also extended their recent gains, up 0.84% and 0.34% as investors shrug off trade tensions for now.
Financials sector was the only one to cap the day’s gains. The sector took a breather after rallying for three straight days in a row and leading the index in the previous session. It shed 0.37%, despite a slight gain in yields as investors look forward to the release of second quarter earnings by some of the big banks later this week. The 10-year Treasury yields edged up slightly by 1.1 basis points to settle at 2.857%.