THE GIST (“THE WHAT”)
In its best day since June, the S&P 500 index rallied as interest-sensitive technology and real-estate stocks traded higher alongside falling treasury yields. Mixed bag of economic data pushed yields lower, benefiting growth stocks. Opening higher, the index held on to gains for most part of the session, closing near day’s highs at 4436.02, up 48.48 points (1.10%) over the previous session.
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
Trading Plans for WED. 08/23 – Morning Bounce Above 4400 Sustainable?
For the last published Results of the Morning Trading Plans, please click here
THE DETAILS (The “How & Why”):
In economic news, the U.S. August S&P manufacturing PMI index came in weaker-than-expected and flashed signs of economic slowdown, falling from 49.0 to 47.0. Meanwhile, U.S. Jul new home sales rose more-than-expected by 4.4% to a one-and-a-half year high. Yields fell across the board on expectations of a fed rate pause following weaker-than-expected PMI data. The 10-year treasury yields slipped for the second session in a row, falling slightly after hitting its highest level since 2007, settling at 4.197%.
Technology and real-estate stocks were the biggest gainers from falling yields. Nvidia jumped 3.17% ahead of its highly anticipated second quarterly earnings report, boosting other chipmakers in-tandem. Advanced Micro Devices, Intel, and Marvell Technology all closed more than 3% higher. Micron Technology and Broadcom gained more than 2% each. Alphabet also gained 2.55% following reports that Wedbush has initiated coverage of the stock with an outperform rating and a price target of $160.
Energy was the only sector to buck the day’s trend, pulling back alongside a slide in oil and gas prices. WTI crude oil price fell to its 4-week low. Occidental Petroleum, Valero Energy, and Marathon Oil fell more than 1% each. Exxon Mobil, Phillips 66, and Devon Energy slipped slightly by 0.5%. Meanwhile, earnings of retail and consumer goods sector were a mixed bag.