Updated: 04-29-2016

The Market at 05:56AM ET

Moving the Market

Wait-and-see ahead of core PCE Prices (Briefing.com consensus +0.1%)

Dollar extends loss against yen

Eurozone CPI disappoints (-0.2%; consensus -0.1%)

Oil moves higher

Quarterly results in focus

Sector Watch

05:56AM ET
[BRIEFING.COM] S&P futures vs fair value: +3.30. Nasdaq futures vs fair value: +24.00.

05:55AM ET
[BRIEFING.COM] Nikkei...Holiday.........  Hang Seng...21067...-321.00...-1.50%.

05:55AM ET
[BRIEFING.COM] FTSE...6288.04...-34.40...-0.50%.  DAX...10237.95...-83.20...-0.80%.

04:15PM ET

[BRIEFING.COM] The stock market ended the Thursday affair under selling pressure as the influential technology sector (-1.4%) reversed early gains to end on the bottom of the leaderboard. Other contributing factors in today's trade included investor disappointment regarding the Bank of Japan's latest policy statement, an increase in M&A activity, an in-line reading of the advance estimate of Q1 GDP (+0.5%; Briefing.com consensus +0.9%), and the underperformance of the heavily-weighted technology (-1.4%), financial (-1.1%), and consumer discretionary (-1.1%) spaces. The Dow Jones Industrial Average (-1.2%) ended behind the tech-heavy Nasdaq (-1.2%) and the S&P 500 (-0.9%).

Today's session began under pressure as investors ruminated over the latest policy statement from the Bank of Japan and the advance reading of Q1 GDP. Overnight, the Bank of Japan surprised investors when it voted to leave its monetary policy unchanged. Participants had been expecting further easing measures from the central bank, given the recent rally in the yen and diminishing inflation expectations.

On the home front, the advance estimate of Q1 GDP (+0.5%; Briefing.com consensus +0.9%) missed the Briefing.com consensus, but fell roughly in-line with the Atlanta Fed's GDPNow model (+0.6%). While this number was in-line with market expectations it was still a a far cry from the Atlanta Fed's original estimate for the first quarter (+1.2%).

The major averages lifted from their opening levels as they found support from a rally in dollar-denominated commodities and early strength in the technology (-1.4%) and consumer discretionary (-1.1%) sectors. However, a final hour sell off would push the indices to new lows as the technology (-1.4%), energy (-1.4%), and financial (-1.1%) sectors rounded out the leaderboard. Conversely, countercyclical consumer staples (UNCH), utilities (-0.1%), and health care (-0.6%) finished in front of the pack.

In the energy space (-1.4%), independent oil and gas names demonstrated relative weakness as the broader sector succumbed to profit-taking pressure. The energy space is up 8.8% in the month of April, compared to a gain of 0.8% in the benchmark index over that period. Meanwhile, the energy component ended its pit session at $46.04 (+1.8%), but dropped to the $45.58/bbl level in electronic trade. Separately, Dow components Exxon Mobil (XOM 88.03, -0.43) and Chevron (CVX 102.40, -1.45) ended the day lower by a respective 0.5% and 1.4% ahead of tomorrow morning's quarterly reports.

The technology sector (-1.4%) helped lead the reversal in the broader market as heavily-weighted Apple (AAPL 94.80, -3.01) extended its post-earnings decline to 9.2%. Today's decline in the tech giant followed activist investor Carl Icahn revealed that he closed his position in the stock. Separately, fellow large caps Alphabet (GOOG 691.02, -14.82) and Microsoft (MSFT 49.93, -1.01) also fell to new lows in the final hour. Elsewhere, Facebook (FB 116.73, +7.84) trimmed early gains, but still ended the day higher by 7.2% after beating estimates for the quarter.

In the financial sector (-1.1%), asset management names demonstrated relative weakness as the sub-group traded lower in sympathy with Invesco (IVZ 31.49, -1.24). The company sank 3.8% after missing top- and bottom-line estimates for the first quarter. Separately, CME Group (CME 92.33, -2.13) fell 2.3% after reporting in-line results for the first quarter. The company also reported that the total average volume reached a record of 16.9 million contracts per day in the first-quarter of 2016.

The U.S. Dollar Index (93.75, -0.63) ended near its lows as the euro and the yen gained against the greenback. The euro/dollar pair finished higher by 0.3% (1.1355) while the dollar lost 3.0% against the yen (108.10).

The Treasury complex ended on its highs as the yield on the 10-yr note finished its day at 1.83% (-2 bps).

Today's participation was above the recent average as more than one billion shares changed hands on the NYSE floor.

Today's economic data included the advance reading of Q1 GDP and weekly initial claims: 

  • First quarter real GDP increased at a seasonally adjusted annual rate of just 0.5% (Briefing.com consensus 0.9%). That was below expectations and the weakest quarter of growth since the first quarter of 2015, which was up just 0.6%.
  • The GDP Deflator was up 0.7% (Briefing.com consensus +0.6%).
    • This was not an uplifting GDP report, yet the market knew that was likely to be the case with the Atlanta Fed's GDPNow model tracking at 0.6%. Accordingly, the reaction to the headline print has been muted.
    • Personal consumption expenditures growth was a weak 1.9% in the first quarter; meanwhile, gross private domestic investment declined 3.5%, exports were down 2.6%, imports were up 0.2%, and government spending was up 1.2%.
    • There was a 1.27 percentage point contribution to Q1 GDP from personal consumption expenditures, which flowed almost entirely from a 1.24 percentage point contribution from spending on services.
    • Gross private domestic investment subtracted 0.6 percentage points as a 0.76 percentage point drag from nonresidential investment weighed heavily. Net exports subtracted 0.34 percentage points, and government spending added 0.2 percentage points.
    • The change in private inventories, which factors into the overall change in gross private domestic investment, subtracted 0.33 percentage points.
    • Real final sales of domestic product, which excludes the change in inventories, were up a scant 0.9% versus the prior 10-quarter average of 2.4%.
  • Initial claims for the week ending April 23 increased by 9,000 to 257,000 (Briefing.com consensus 259,000).
    • That was roughly in-line with expectations and marked the 60th straight week that claims have been below 300,000, which is the longest since 1973. In other words, no change really in the underlying trend.
    • The four-week moving average for initial claims decreased by 4,750 to 256,000, which is the lowest average since December 8, 1973.
  • Continuing claims for the week ending April 16 decreased by 5,000 to 2.130 million.
    • That dropped the four-week moving average to 2.158 million, which is the lowest average since November 11, 2000.

Tomorrow's economic data will include Core PCE Prices for March (Briefing.com consensus +0.1%), Personal Income for March (Briefing.com consensus 0.3%), Personal Spending for March (Briefing.com consensus 0.2%), and the Q1 Employment Cost Index (Briefing.com consensus 0.6%), which will each cross the wires at 8:30 ET. Meanwhile, Chicago PMI for April (Briefing.com consensus 53.3) and the final reading of the University of Michigan Consumer Sentiment Index for April (Briefing.com 90.0) will cross the wires at 9:45 ET and 10:00 ET, respectively. 

  • Dow Jones +2.3% YTD
  • S&P 500 +1.6% YTD
  • Russell 2000 +0.4% YTD
  • Nasdaq Composite -4.0% YTD 
Dow: -210.79… | Nasdaq: -57.85… | S&P: -19.34…
NASDAQ Adv/Dec 1001/2085. …NYSE Adv/Dec 1037/1944.

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