|Dow ||29927.07 ||-741.46 || (-2.42%) |
|Nasdaq ||10646.09 ||-453.06 || (-4.08%) |
|SP 500 ||3666.77 ||-123.22 || (-3.25%) |
|10-yr Note ||+1 2/32 ||3.307 || |
|NYSE ||Adv 306 || Dec 2700 || Vol 1.37 bln |
|Nasdaq ||Adv 905 || Dec 2947 || Vol 5.65 bln |
|Strong: -- |
|Weak: Energy, Consumer Discretionary, Materials, Information Technology, Financials, Communication Services |
Moving the Market
|-- Many central banks raising key rates |
-- Unfavorable economic data playing into growth concerns
-- Atlanta GDPNow lowered forecast from 0.9% to 0.0%
Stocks Find Renewed Pressure Amid Stagflation Worries
16-Jun-22 16:25 ET
Dow -741.46 at 29927.07, Nasdaq -453.06 at 10646.09, S&P -123.22 at 3666.77
[BRIEFING.COM] The stock market could not hold onto its late session gains from Wednesday, succumbing to aggressive selling. The S&P 500 (-3.3%) and Nasdaq Composite (-4.1%) were on a slow decline most of the day with the Dow Jones Industrial Average (-2.4%) exhibiting more volatile price action.
The stage was set before today's open with several central banks announcing a shift to more aggressive policies. These shifts coming on the heels of the Fed raising the fed funds rate by 75 basis points exacerbated existing worries about growth and earnings.
The Swiss National Bank announced a surprise rate hike of 50 basis points, the Bank of England increased its key rate by 25 basis points while also projecting a decline of 0.3% in Q2 GDP, and Brazil's central bank raised its key rate by 50 basis points.
The added rub is that their moves are generally being perceived as a catch-up trade, which is feeding worries about a policy mistake that leads to a recession.
Treasuries faced some selling at the start of the session, but they rebounded strongly as stocks struggled, sending the 10-yr yield lower by nine basis points to 3.31% while the 2-yr yield fell eleven basis points to 3.16%.
Stagflation worries were in today's trading mix, emanating from the ongoing inflation pressures and the Atlanta Fed's GDPNow model estimating Q2 real GDP to be flat versus a prior projection calling for 0.9% growth.
With these factors on the forefront, the sell-off was broad-based. The declining issues outpaced the advancing issues by a greater than 9-to-1 margin at the NYSE and an almost 4-to-1 margin at the Nasdaq. Today's session saw above-average volume with more than 1.3 bln shares changing hands at the NYSE floor.
All 11 of the S&P 500 sectors closed in the red with the selling paced by energy (-5.6%), consumer discretionary (-4.8%), information technology (-4.1%), and materials (-3.7%). The best performing sectors were the consumer staples (-0.7%), health care (-1.5%), and the utilities (-1.9%), but they could not stay out of the red.
Profit-taking in the best performing sector of the year narrowed energy's year-to-date gain to 39.2% while the remaining ten groups now show year-to-date losses between 9.2% (utilities) and 34.7% (consumer discretionary).
The energy sector finished near its session low even though crude oil recovered its early loss to end the pit session little changed at $115.28/bbl. WTI crude climbed toward the midpoint of yesterday's range in after-hours trade, but the late rally failed to lift the energy sector out of the last slot on today's leaderboard.
Top-weighted technology suffered from broad-based losses with roughly half of its components hitting fresh 52-week lows. Top component Apple (AAPL 130.06, -5.37, -4.0%) stopped within a point of a 52-week low of its own, but still lost 4.0% while Adobe (ADBE 365.08, -11.84, -3.1%) fell to its lowest level in over two years ahead of tonight's release of quarterly results. Chipmakers had an even worse showing than the tech sector, as the PHLX Semiconductor Index fell 6.2%.
Reviewing today's data:
May Industrial Production (Briefing.com consensus 0.5%; prior 1.1%) and Capacity Utilization (Briefing.com consensus 79.3%; prior 79.0%) will be reported tomorrow at 9:15 ET.
- Housing starts declined 14.4% month-over-month in May to a seasonally adjusted annual rate of 1.549 million units (Briefing.com consensus 1.730 million) while building permits -- a leading indicator -- declined 7.0% month-over-month to 1.695 million (Briefing.com consensus 1.800 million).
- The key takeaway from the report was the broad-based softness in single-family starts and permits. To that end, starts declined month-over-month in three of the four geographic regions while permits declined in all regions with the largest region -- the South -- seeing the largest decline in permits.
- Initial jobless claims for the week ending June 11 decreased by 3,000 to 229,000 (Briefing.com consensus 215,000) while continuing jobless claims for the week ending June 4 increased by 3,000 to 1.312 million.
- The key takeaway from the report is that the improvement in initial jobless claims appears to have stalled, suggesting it could be hitting an inflection point that marks peak conditions for the labor market.
- The Philadelphia Fed survey fell to -3.3 in June (Briefing.com consensus 5.0) from 2.6 in May.
- Dow Jones Industrial Average -17.6% YTD
- S&P 400 -22.5% YTD
- S&P 500 -23.1% YTD
- Russell 2000 -26.5% YTD
- Nasdaq Composite -32.0% YTD
Energy continues its underperformance
16-Jun-22 15:35 ET
Dow -746.50 at 29922.03, Nasdaq -460.09 at 10639.06, S&P -125.23 at 3664.76
[BRIEFING.COM] Of the main indices, the Nasdaq Composite (-4.3%) is trailing the S&P 500 (-3.3%) and Dow Jones Industrial Average (-2.3%) but all three remain off their lows.
The S&P 500 energy sector is the single worst performing sector of the day, down 5.5%. Notably, its the only sector still in the green year-to-date, up 38.9%. WTI crude oil futures were as low as $113.00/bbl earlier but now trade up 1.9% to $117.42/bbl after closing the pit session unchanged at $115.28/bbl. Natural gas futures are down 0.4% to $7.39/mmbtu.
After the close, Adobe (ADBE) is set to release quarterly earnings and revenue.
Looking ahead to Friday, market participants will receive the May Industrial Production (Briefing.com consensus 0.5%; prior 1.1%) and Capacity Utilization (Briefing.com consensus 79.3%; prior 79.0%) report at 9:15 ET.
Airline stocks taking a hit
16-Jun-22 15:00 ET
Dow -905.18 at 29763.35, Nasdaq -494.56 at 10604.59, S&P -132.37 at 3657.62
[BRIEFING.COM] The S&P 500 and Nasdaq Composite have descended to new lows in recent trading. The Dow Jones Industrial Average has been on a downward trend but has stayed above its early session low.
The S&P 500 industrials sector (-3.5%) has been underperforming the broader market for most of the day. The biggest laggards are the airline stocks. United Airlines (UAL 34.44, -3.45, -9.2%), American Airlines (AAL 12.03, -1.28, -9.7%), and Delta (DAL 29.23, -2.73, -8.5%) are down big currently. American Airlines and Delta both reached new 52-week lows while United is approaching its March low.
For context, the Global Jets ETF (JETS) also reached a new 52-week low, down 6.4%.
Treasury yields have continued to drop into the cash close. The 10-yr note yield fell nine basis points to 3.31% and the 2-yr note yield fell 11 basis points to 3.16%.
Etsy underperforms following cautious sell side commentary
16-Jun-22 14:30 ET
Dow -813.83 at 29854.70, Nasdaq -499.60 at 10599.55, S&P -137.55 at 3652.44
[BRIEFING.COM] The S&P 500 (-3.63%) sits firmly in second place to this point on Thursday, bumping up against session lows.
S&P 500 constituents Norwegian Cruise Line (NCLH 10.38, -1.35, -11.51%), Etsy (ETSY 67.78, -8.27, -10.87%), and Generac (GNRC 223.88, -24.66, -9.92%) dot the bottom of the standings. NCLH and cruise line peers fall on Thursday owing to general consumer spending concerns, while ETSY declines on cautious Oppenheimer commentary.
Meanwhile, gold miner Newmont Mining (NEM 64.09, +1.41, +2.25%) is today's top performer, aided in part by today's gains in gold futures.
Gold notches back-to-back gains
16-Jun-22 13:55 ET
Dow -714.00 at 29954.53, Nasdaq -461.52 at 10637.63, S&P -122.96 at 3667.03
[BRIEFING.COM] The major averages have trickled lower in the last half hour, the tech-heavy Nasdaq Composite (-4.16%) now down more than 460 points.
Gold futures settled $30.30 higher (+1.7%) to $1,849.90/oz, aided by a sharp move lower in the dollar.
Meanwhile, the U.S. Dollar Index skids -1.6% to $103.48.