Updated: 05-25-2017

The Market at 04:25PM ET
Dow: +70.53… | Nasdaq: +42.23… | S&P: +10.68…
NASDAQ Vol: 1.61 bln… Adv: 1533… Dec: 1326…
NYSE Vol: 946.1 mln… Adv: 1524… Dec: 1399…

Moving the Market

S&P 500 & Nasdaq hit fresh record highs; no technical resistance in sight

OPEC decides to extend supply cut, but won't increase amount; oil slips

Sector Watch
Strong: Consumer Discretionary, Technology
Weak: Energy, Materials, Financials

04:25PM ET

[BRIEFING.COM] The stock market posted its sixth-consecutive win in style on Thursday with the S&P 500 (+0.4%) settling at a record high for the second day in a row. The Nasdaq (+0.7%) also finished at an all-time high while the Dow (+0.3%) missed its record close by around 30 points. The major averages closed at the upper end of the day's trading range.

As expected, OPEC and non-OPEC nations agreed to "extend their production adjustments, which originally started 1 January 2017, for a further period of nine months, beginning 1 July 2017." However, the OPEC/non-OPEC nations will not be increasing the size of the supply cut. The latter headline was somewhat disappointing for investors since the Kuwaiti Oil Minister said just yesterday that "all options are still open", including deeper output cuts.

WTI crude tumbled 4.8% to $48.87/bbl. However, it's important to note that crude oil went on a two-week rally ahead of today's announcement. Therefore, even with today's tumble, the commodity settled $2.99/bbl, or 6.5%, above its closing level on May 9.

Like crude oil, the energy sector (-1.8%) suffered a sizable loss. The lightly-weighted materials space (-0.2%) also closed in negative territory, but the nine remaining groups finished in the green with gains between 0.2% and 0.9%. The consumer discretionary (+0.9%) and technology (+0.8%) sectors were the top-performers while the financial space (+0.2%) lagged.

Retailers helped the consumer discretionary sector finish ahead of the broader market, evidenced by the 1.0% increase in the SPDR S&P Retail ETF (XRT 40.81, +0.41). Best Buy (BBY 61.25, +10.83) led the charge, spiking 21.5%, after beating top and bottom line estimates. Large-cap names like Amazon (AMZN 993.38, +13.03) and Starbucks (SBUX 62.90, +1.01) also underpinned the consumer discretionary space, adding 1.3% and 1.6%, respectively.

For technology, top-performers included Microsoft (MSFT 69.62, +0.85), Facebook (FB 151.96, +1.92), and Alphabet (GOOGL 991.86, +14.25). The three names added between 1.2% and 1.5%. Today's performance extended the tech sector's year-to-date gain to 19.7%. For comparison, the S&P 500 currently holds a year-to-date gain of 7.9%.

The Dow Jones Transportation Average also had a solid performance, adding 1.6%. However, small-caps lagged with the Russell 2000 (+0.1%) finishing just at tick above its unchanged mark.

U.S. Treasuries finished Thursday's session flat, giving little to no additional insight into investor sentiment; the benchmark 10-yr yield settled at its unchanged mark (2.25%). However, the CBOE Volatility Index (VIX 10.00, -0.02, -0.2%) settled around the historically-low 10.00 mark for the second day in a row, signaling that the market believes near-term risks are minor.

On the data front, investors received Initial Claims, April Advance International Trade in Goods, and April Advance Wholesale Inventories on Thursday:

  • The latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 238,000. Today's tally was above the revised prior week count of 233,000 (from 232,000). As for continuing claims, they rose to 1.923 million from the revised count of 1.899 million (from 1.898 million).
    • The key takeaway from the report is that the low level of initial claims continues to support the notion that employers are generally reluctant to cut staff, which is typically the case in the face of a tight labor market.
  • The Advance report for International Trade in Goods for April showed a deficit of $67.6 billion, up from a revised deficit of $65.1 billion for March (from -$64.8 billion).
  • April Advance Wholesale Inventories showed a 0.3% decline, down from a revised 0.1% uptick in March (from 0.2%).

Tomorrow, investors will receive several economic reports, including April Durable Orders (Briefing.com consensus -1.8%) at 8:30 ET, the second estimate of first quarter GDP (Briefing.com consensus 0.8%) also at 8:30 ET, and the final reading of the University of Michigan Consumer Sentiment Survey for May (Briefing.com consensus 97.5) at 10:00 ET.

  • Nasdaq Composite +15.3% YTD
  • S&P 500 +7.9% YTD
  • Dow Jones Industrial Average +6.7% YTD
  • Russell 2000 +1.9% YTD
Dow: +70.53… | Nasdaq: +42.23… | S&P: +10.68…
NASDAQ Adv/Dec 1533/1326. …NYSE Adv/Dec 1524/1399.

03:45PM ET
[BRIEFING.COM]
  • Oil prices sell off after disappointing OPEC/non-OPEC oil output cut deal extension
  • Clearly, the market wanted more as the 6 or 9-month extension was getting priced-in ahead of today's meeting
  • There were high expectations to see a deeper cut beyond the 1.8 mln barrels per day
  • By the end of today's floor session, July crude oil dropped $2.48 (or -4.8%) to $48.87/barrel
  • In electronic trade here, July crude is 
  • In other energy, July natural gas closed $0.02 lower at $3.28/MMBtu following today's weekly EIA storage data
  • Metals closed higher, gold with modest gains
  • June gold finished $3.10 higher at $1256.30/oz, while July silver rose $0.08 to $17.19/oz
  • July copper gained $0.02 to $2.60/lb
Dow: +71.13… | Nasdaq: +47.27… | S&P: +11.63…
NASDAQ Adv/Dec 1562/1295. …NYSE Adv/Dec 1559/1384.

03:00PM ET

[BRIEFING.COM] Moving into the final stretch, the S&P 500 (+0.5%) and the Nasdaq (+0.9%) are on track to close at new record highs. Meanwhile, the Dow (+0.4%) hovers about 20 points below its record close. 

Nine of eleven sectors trade in positive territory this afternoon. The consumer discretionary (+1.1%) and technology (+1.0%) sectors have maintained their spots at the top of the leaderboard while the consumer staples group (+0.8%) has faded a bit. On the flip side, the energy sector (-2.0%) hovers at a fresh session low as crude oil extends its loss above 5.0%. WTI crude trades at $48.73/bbl.

Earnings season is nearly in the books with over 97.0% of S&P 500 components having already reported their quarterly results. Costco (COST 174.38, +1.37), Ulta Beauty (ULTA 292.46, +11.95), and GameStop (GME 23.48, +0.77) headline tonight's earnings docket. Things will be quiet on the earnings front tomorrow morning with the most notable report coming from Big Lots (BIG 48.28, +1.30).

Dow: +78.23… | Nasdaq: +52.37… | S&P: +12.47…
NASDAQ Adv/Dec 1502/1347. …NYSE Adv/Dec 1531/1371.

02:30PM ET

[BRIEFING.COM] Equity indices have not changed since the last update.

Like the major U.S. averages, the Dow Jones Transportation Average (+0.7%) is looking for its sixth-consecutive win today. Thus far, the DJTA is on track to do just that. Airlines like Alaska Air (ALK 86.01, +1.47), Delta Air Lines (DAL 49.89, +1.01), JetBlue Airways (JBLU 22.79, +0.43), Southwest Airlines (LUV 60.73, +1.17), and United Continental (UAL 80.89, +1.95) have provided a pocket of strength. The five names hold gains between 1.8% and 2.5%.

Similarly, railroad companies like CSX (CSX 53.35, +1.02), Kansas City Southern (KSU 91.66, +1.36), and Norfolk Southern (NSC 117.96, +2.97) also outperform, holding gains between 1.5% and 2.5%. 

Dow: +75.09… | Nasdaq: +49.71… | S&P: +11.56…
NASDAQ Adv/Dec 1433/1400. …NYSE Adv/Dec 1481/1414.

02:00PM ET

[BRIEFING.COM] Equity indices continue trending sideways with the S&P 500 (+0.4%) drifting within a five-point range since noon ET. 

The stock market has been racking up victories lately; a win today would mark the S&P 500's sixth in a row. The rally started last Thursday with a 'buy-the-dip' trade on the heels of the stock market's worst one-day decline since September. The catalyst behind last Wednesday's dive, a New York Times article highlighting a potential obstruction of justice move by President Trump, hasn't gone away. However, the market believes that the short-term risks of the alleged incident are minor, evidenced by the historically-low level of the CBOE Volatility Index (VIX 10.00, -0.02, -0.2%).

The VIX, which hit 16.30 a week ago, is now trading around the 10.00 mark. The index has closed under 10.00 only around a dozen times since it was launched back in 1993.

Dow: +74.96… | Nasdaq: +46.84… | S&P: +11.63…
NASDAQ Adv/Dec 1429/1386. …NYSE Adv/Dec 1463/1423.

01:25PM ET

[BRIEFING.COM] The major averages remain near their session highs with the Nasdaq (+0.7%) trading ahead of the S&P 500 (+0.5%).

The benchmark index has underperformed the tech-heavy Nasdaq due to a 1.5% decline in the energy sector. While the energy sector represents a clear outlier, it has fared better than crude oil, which is down 4.0% at $49.29/bbl after marking a session low at $48.77/bbl. Oil's drop comes after the OPEC/non-OPEC meeting in Vienna ended with an announcement that producers will maintain current levels of production for nine months, which was expected by a market hungry for more bullish news like reducing production levels once again.

From a technical standpoint, the reversal in oil comes after the commodity spent three days trying to claim the $52.00/bbl level, which had triggered downswings on two occasions in 2016. After finally climbing above $52.00/bbl in late 2016, oil made a 2017 high at $55.24 at the start of January, but selling in March pushed the commodity back below the $52.00 level, which was briefly breached in early April, but has acted as resistance today.

Dow: +73.96… | Nasdaq: +44.79… | S&P: +11.05…
NASDAQ Adv/Dec 1396/1393. …NYSE Adv/Dec 1429/1413.

01:05PM ET

[BRIEFING.COM] The S&P 500 (+0.5%) and the Nasdaq (+0.8%) have climbed to fresh record highs today as the stock market eyes its sixth consecutive win. The major averages, including the Dow (+0.4%), currently hover at their best marks of the day.

As widely expected, OPEC and non-OPEC nations decided to extend their current production cut agreement by nine months to March 2018. However, the oil producers stopped short of increasing the magnitude of the supply cut. Crude oil has tumbled 3.9% to $49.39/bbl in the wake of the decision. 

Investors were somewhat disappointed with the decision to forego deeper cuts in light of recent reports that said that option was on the table. However, it's important to note that WTI crude went on a two-week rally ahead of today's announcement. Even with today's tumble, the commodity trades $3.51/bbl, or 7.7%, above where it closed on May 9.

Unsurprisingly, the energy sector (-1.2%) trades at the bottom of the day's leaderboard. The lightly-weighted materials space (-0.2%) also hovers in negative territory, but its loss is considerably smaller than the energy sector's. The remaining nine sectors hold gains between 0.3% (financials) and 1.0% (consumer discretionary). 

The consumer discretionary space has profited from broad strength. The sector's top component by market cap, Amazon (AMZN 999.00, +18.52), has climbed 1.9% to a fresh record high. Retailers have also put together a solid performance, evidenced by the 1.0% increase in the SPDR S&P Retail ETF (XRT 40.82, +0.42), with Best Buy (BBY 60.35, +9.93) leading the charge. BBY shares have spiked 19.6% after the company reported better than expected earnings and revenues. 

Mega-cap tech names like Microsoft (MSFT 69.44, +0.68), Alphabet (GOOGL 992.40 +14.72), and Facebook (FB 151.91, +1.87) have put the top-weighted technology sector (+0.9%) just behind the consumer discretionary group at the top of the leaderboard. Similarly, the consumer staples space (+0.9%) trades ahead of the broader market.

In the bond market, U.S. Treasuries have clung to their flat lines throughout today's session, leaving the benchmark 10-yr yield at its unchanged mark (2.25%). The CBOE Volatility Index (VIX 9.96, -0.06, -0.6%) also trades relatively flat. However, the VIX is hovering at a historically low level, which signals a complacency in the market regarding near-term risks.

On the data front, investors received Initial Claims, April Advance International Trade in Goods, and April Advance Wholesale Inventories on Thursday:

  • The latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 238,000. Today's tally was above the revised prior week count of 233,000 (from 232,000). As for continuing claims, they rose to 1.923 million from the revised count of 1.899 million (from 1.898 million).
    • The key takeaway from the report is that the low level of initial claims continues to support the notion that employers are generally reluctant to cut staff, which is typically the case in the face of a tight labor market.
  • The Advance report for International Trade in Goods for April showed a deficit of $67.6 billion, up from a revised deficit of $65.1 billion for March (from -$64.8 billion).
  • April Advance Wholesale Inventories showed a 0.3% decline, down from a revised 0.1% uptick in March (from 0.2%).
Dow: +78.34… | Nasdaq: +47.03… | S&P: +12.38…
NASDAQ Adv/Dec 1473/1287. …NYSE Adv/Dec 1526/1318.

12:30PM ET

[BRIEFING.COM] The major averages have not moved since the last update.

The consumer staples space (+0.8%) trades with the technology (+0.8%) and consumer discretionary (+0.9%) groups atop today's sector standings amid broad strength. Soft drink names like PepsiCo (PEP 117.38, +1.33) and Monster Beverage (MNST 50.99, +1.12) are among the sector's top-performers with respective gains of 1.1% and 2.3%. A win today would mark the sixth in a row for the consumer staples sector.

In the bond market, U.S. Treasuries continue clinging to their flat lines with the benchmark 10-yr yield hovering at its unchanged mark (2.25%). Similarly, the U.S. Dollar Index (97.05, +0.10) trades relatively flat.

Dow: +61.70… | Nasdaq: +41.21… | S&P: +10.27…
NASDAQ Adv/Dec 1450/1311. …NYSE Adv/Dec 1474/1341.

12:00PM ET

[BRIEFING.COM] The equity market has ticked down from its best level of the day. However, the major averages still hover at the upper end of today's trading range. The S&P 500 is up 0.4%.

The financial sector (unch) has slipped to its flat line in recent action after hovering in line with the broader market earlier. Most of the financial sector's components deal in positive territory. However, influential banking names like JPMorgan Chase (JPM 85.23, -0.48), Wells Fargo (WFC 52.74, -0.35), Bank of America (BAC 23.25, -0.10), and Citigroup (C 61.91, -0.36) lag. The four companies show losses between 0.4% and 0.7%.

After pacing the stock market's post-election rally on promises of tax reform and deregulation, the financial sector has struggled thus far in 2017; the group currently holds a 1.1% year-to-date gain while the S&P 500 is higher by 7.8% for the year. The financial sector will continue to be a focal point going forward as its performance largely depends on the implementation of President Trump's pro-growth agenda.

Dow: +49.61… | Nasdaq: +35.03… | S&P: +8.41…
NASDAQ Adv/Dec 1438/1281. …NYSE Adv/Dec 1475/1317.

11:35AM ET

[BRIEFING.COM] The major averages hover at their best marks of the day with the Nasdaq (+0.7%) showing relative strength.

Mega-cap tech names like Microsoft (MSFT 69.44, +0.68) and Alphabet (GOOGL 988.33, +10.72) have put the top-weighted technology sector ahead of the broader market. While these two companies show relative strength, adding around 0.8% apiece, tech components trade higher virtually across the board. 

On the flip side, the energy sector (-0.6%) has struggled this morning as crude oil weighs; the commodity currently hovers at its worst mark of the day, down 2.0% at $50.35/bbl. However, today's slip follows a two-week rally that was fueled on the belief that the OPEC/non-OPEC supply cut would be extended.

As expected, OPEC decided to extend its production cut agreement by nine months to March 2018. Nearly a dozen non-OPEC producers are expected to participate in the extension.

Dow: +83.66… | Nasdaq: +43.48… | S&P: +12.24…
NASDAQ Adv/Dec 1671/1024. …NYSE Adv/Dec 1697/1053.

11:00AM ET

[BRIEFING.COM] The S&P 500 (+0.5%) and the Nasdaq (+0.6%) have climbed to fresh record highs this morning. Meanwhile, the Dow (+0.4%) is about 80 points below its all-time high (21,169).

Ten of eleven sectors are higher this morning. The consumer discretionary space (+0.8%) is leading the advance amid broad strength. Some of the sector's top-performers include Amazon (AMZN 992.35, +12.01), PVH (PVH 107.19, +5.15), and Best Buy (BBY 59.30, +8.88). PVH and BBY are up 4.9% and 17.5%, respectively, after both companies reported better than expected earnings and revenues.

Retailers show broad strength, evidenced by the 1.7% increase in the SPDR S&P Retail ETF (XRT 41.10, +0.70). L Brands (LB 50.62, +1.04), Ross Stores (ROST 63.05, +1.11), and TJX (TJX 75.27, +1.28) are among the top performers with gains between 1.7% and 2.0%.

Dow: +79.81… | Nasdaq: +36.00… | S&P: +10.57…
NASDAQ Adv/Dec 1696/959. …NYSE Adv/Dec 1775/947.

10:40AM ET
[BRIEFING.COM]
  • Oil prices are trading lower this morning following OPEC's decision in Vienna, which was to extend oil output cuts with participating producers
  • Clearly, this was a disappointment as many likely hoped to see an extension plus a deeper cut than the current 1.8 mln barrels per day figure
  • So, in current trade, July crude oil is
  • In other energy, natural futures sold off to a new LoD following weekly EIA storage data, which showed a build of 75 bcf
  • July natural gas is now -$0.01 at $3.29/MMBtu
  • Precious metals aren't showing much action
  • June gold is +$0.80 at $1253.90/oz, while July silver is +$0.07 at $17.19/oz
  • July copper +$0.02 at $2.60/lb
Dow: +82.28… | Nasdaq: +38.06… | S&P: +11.22…
NASDAQ Adv/Dec 1729/884. …NYSE Adv/Dec 1893/802.

09:55AM ET

[BRIEFING.COM] Equity indices have ticked up from their opening levels with the S&P 500 now sporting a gain of 0.4%.

Ten of eleven sectors trade in the green, but gains have been fairly modest. The consumer discretionary (+0.7%) and energy (+0.7%) groups show relative strength, but the top-weighted technology (+0.3%) and financials (+0.4%) spaces trade roughly in line with the broader market. The lightly-weighted utilities sector (-0.1%) is the lone laggard.

In the bond market, U.S. Treasuries trade flat with the benchmark 10-yr yield unchanged at 2.25%. Meanwhile, gold is up 0.3% at $1,256.69/ozt.

Dow: +73.37… | Nasdaq: +24.26… | S&P: +8.44…
NASDAQ Adv/Dec 1628/761. …NYSE Adv/Dec 1952/639.

09:45AM ET

[BRIEFING.COM] The major U.S. indices open Thursday's session with modest gains. The S&P 500 trades higher by 0.2%.

Most sectors trade in positive territory with the consumer discretionary sector (+0.5%) showing relative strength. Retailers have helped push the consumer discretionary space ahead of its peers following a mixed batch of earnings reports. The SPDR S&P Retail ETF (XRT 40.88, +0.48) is up 1.2%.

On the flip side, select countercyclical groups lag with the health care (unch) and utilities (unch) sectors hovering at their unchanged marks.

Dow: +49.59… | Nasdaq: +11.97… | S&P: +4.13…
NASDAQ Adv/Dec 1435/817. …NYSE Adv/Dec 1795/718.

09:16AM ET
[BRIEFING.COM] S&P futures vs fair value: +5.30. Nasdaq futures vs fair value: +22.30.

The S&P 500 settled at a fresh record high on Wednesday after the FOMC minutes from the May 2-3 meeting were received well by investors. That optimism lingers this morning; the S&P 500 futures trade five points, or 0.2%, above fair value.

As widely expected, OPEC decided to extend its production cut agreement by nine months to March 2018. However, the magnitude of the cut is expected to stay the same. Nearly a dozen non-OPEC producers, including Russia, Mexico, and Kazakhstan, will likely participate in the extension.

The decision to extend the supply cut is a combative response to persistently high U.S. production, which has weighed on the price of crude oil over the last few months. WTI crude went on a two-week rally ahead of the production decision, adding 12.2% from May 9 to May 23. This morning, however, the commodity is down 1.0% at $50.86/bbl.

In U.S. corporate news, Best Buy (BBY 57.02, +6.60) has spiked 13.2% in pre-market action after beating top and bottom line estimates. HP (HPQ 19.80, +0.79) also trades higher, up 4.2%, after reporting better than expected earnings/revenues and issuing upbeat guidance. However, on the downside, Signet Jewelers (SIG 52.50, -2.04) has lost 3.7% after missing on the top and bottom lines.

U.S. Treasuries trade flat with the benchmark 10-yr yield unchanged at 2.25%. The weekly Initial Claims Report came in slightly better than expected (234,000 actual vs 238,000 Briefing.com consensus), but it did not prompt much movement in the bond market. As for continuing claims, they rose to 1.923 million from the revised count of 1.899 million (from 1.898 million).

Also of note, the CBOE Volatility Index (VIX 9.92, -0.08, -0.8%) has returned to a historically low level. Yesterday, the VIX closed below the 10.00 mark, which has only happened around a dozen times.


08:51AM ET
[BRIEFING.COM] S&P futures vs fair value: +5.50. Nasdaq futures vs fair value: +22.10.

The S&P 500 futures trade six points, or 0.2%, above fair value.

Equity indices in the Asia-Pacific region ended Thursday on a higher note. The uptick in the region developed alongside a sudden, late-evening, six-point spike in the S&P 500 futures, which was not associated with any particular headline. It is worth noting that overnight reports from the OPEC meeting indicate that the supply freeze will be extended for nine months, which is disappointing to participants who hoped to hear about an export cut. The Bank of Korea left its repurchase rate unchanged at 1.25%, as expected.

  • In economic data:
    • Singapore's Q1 GDP -1.3% quarter-over-quarter (expected -1.0%; last -1.9%); +2.7% year-over-year, as expected (last 2.5%)
    • Hong Kong's April trade deficit HKD34.10 billion (last deficit of HKD42.30 billion). April Imports +7.3% month-over-month (last 13.0%) and April Exports +7.1% month-over-month (last 16.9%)

---Equity Markets---

  • Japan's Nikkei gained 0.4% with countercyclical names like Softbank, Furukawa Electric, Osaka Gas, and Chubu Electric Power gaining between 1.9% and 3.6%. Toshiba jumped 3.3% while Konami, Pioneer, Suzuki Motor, and Fanuc advanced between 1.6% and 3.5%.
  • Hong Kong's Hang Seng climbed 0.8% to a fresh high for the year. Financials and property-related names outperformed with Ping An Insurance, China Overseas, China Construction Bank, China Life Insurance, Link Reit, BoC Hong Kong, and Henderson Land rising between 1.1% and 3.3%. Cathay Pacific Air lagged after yesterday's show of strength, falling 1.8%.
  • China's Shanghai Composite rallied 1.4%. Huafa Industrial Co, Sinolink Securities, Hebei Baoshuo, Zhonghang Heibao, and Beijing Airport High-Tech Park gained between 5.5% and 9.9%.
  • India's Sensex jumped 1.5% to a new record high. Larsen & Toubro surged 5.0% while financials like ICICI Bank, HDFC Bank, SBI, and AXIS Bank climbed between 1.4% and 3.5%. Lupin fell 7.3% in reaction to disappointing results.

Major European indices trade near their flat lines with Italy's MIB (-0.4%) showing relative weakness. British political parties will resume campaigning on Friday after a suspension was called in the wake of the terrorist attack in Manchester. U.S. President Donald Trump is in Brussels today, meeting with representatives from the European Union and North Atlantic Treaty Organization. It is worth noting that NATO is in the process of adding Montenegro as its 29th member. The accession is expected to be completed on June 5.

  • In economic data:
    • UK's Q1 GDP +0.2% quarter-over-quarter (expected 0.3%; last 0.3%); +2.0% year-over-year (consensus 2.1%; last 2.1%). Index of Services +0.2% (consensus 0.3%; last 0.4%). Q1 Business Investment +0.6% quarter-over-quarter (expected 0.2%; last -0.9%); +0.8% year-over-year (last -0.9%). BBA Mortgage Approvals 40,800, as expected (last 40,900)
    • Italy's March Industrial New Orders -4.2% month-over-month (last 5.2%); +9.2% year-over-year (last 7.8%). March Industrial Sales +0.5% month-over-month (last 2.0%); +7.2% year-over-year (last 4.6%)
    • Spain's Q1 GDP was left unrevised at 0.8% quarter-over-quarter, as expected (last 0.8%); +3.0% year-over-year, as expected (last 3.0%)

---Equity Markets---

  • UK's FTSE is down 0.1%. Unilever, Burberry, British American Tobacco, and Sainsbury are up between 0.6% and 1.4% while RSA Insurance, Land Securities, and Barclays show losses between 0.6% and 1.3%.
  • Germany's DAX is also lower by 0.1% with Deutsche Bank and Commerzbank both down near 0.7%. Automakers Daimler and BMW show respective losses of 0.5% and 0.4% while Volkswagen has risen 0.3%.
  • France's CAC trades flat. Heavyweights like TechnipFMC, ArcelorMittal, LafargeHolcim, and Peugeot have given up between 1.1% and 2.6% while consumer names like L'Oreal, Louis Vuitton, and Danone are up between 0.4% and 0.9%.
  • Italy's MIB trades down 0.4%. Financials like Banco Bpm, UBI Banca, Intesa Sanpaolo, FinecoBank, and UniCredit show losses between 0.6% and 2.4%.

08:34AM ET
[BRIEFING.COM] S&P futures vs fair value: +4.30. Nasdaq futures vs fair value: +18.40.

The S&P 500 futures trade four points, or 0.2%, above fair value.

Just in, the latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 238,000. Today's tally was above the revised prior week count of 233,000 (from 232,000). As for continuing claims, they rose to 1.923 million from the revised count of 1.899 million (from 1.898 million).

Separately, the Advance report for International Trade in Goods for April showed a deficit of $67.6 billion, up from a revised deficit of $65.1 billion for March (from -$64.8 billion). 


08:00AM ET
[BRIEFING.COM] S&P futures vs fair value: +4.80. Nasdaq futures vs fair value: +18.60.

The S&P 500 settled at a record high yesterday after the FOMC minutes from the May 2-3 meeting were received well by investors. The benchmark index looks poised to extend its record level this morning with the S&P 500 futures trading five points, or 0.2%, above fair value.

OPEC decided to extend its production cut agreement by nine months to March 2018. However, the magnitude of the cut is expected to stay the same. Nearly a dozen non-OPEC producers, including Russia, Mexico, and Kazakhstan, will likely participate in the extension. The decision to extend the supply cut is a combative response to persistently high U.S. production, which has weighed on the price of crude oil over the last few months.

Crude oil went on a two-week rally ahead of the decision, adding 12.2% from May 9 to May 23. This morning, however, the commodity is down 1.4% at $50.64/bbl. 

U.S. Treasuries trade slightly higher this morning with the benchmark 10-yr yield slipping one basis point to 2.24%. Meanwhile, the CBOE Volatility Index (VIX 9.98, -0.04, -0.4%) has returned to a historically low level. Yesterday, the VIX closed below the 10.00 mark, which has only happened around a dozen times.

On the data front, investors will receive Initial Claims (Briefing.com consensus 238,000) and April Advance International Trade in Goods. Both reports will cross the wires at 8:30 ET.

In U.S. corporate news:

  • HP (HPQ 19.58, +0.57): +3.0% after reporting better than expected earnings/revenues and issuing upbeat guidance.
  • Dollar Tree (DLTR 76.50, -1.58): -2.0% after missing bottom-line estimates and issuing below-consensus guidance. 
  • Best Buy (BBY 57.04, +6.69): +13.3% after beating top and bottom line estimates.
  • Signet Jewelers (SIG 52.00, -2.53): -4.6% after missing on the top and bottom lines.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a higher note. Japan's Nikkei +0.4%, Hong Kong's Hang Seng +0.8%, China's Shanghai Composite +1.4%, India's Sensex +1.5%.
    • In economic data:
      • Singapore's Q1 GDP -1.3% quarter-over-quarter (expected -1.0%; last -1.9%); +2.7% year-over-year, as expected (last 2.5%)
      • Hong Kong's April trade deficit HKD34.10 billion (last deficit of HKD42.30 billion). April Imports +7.3% month-over-month (last 13.0%) and April Exports +7.1% month-over-month (last 16.9%)
    • In news:
      • Overnight reports from the OPEC meeting indicate that the supply freeze will be extended for nine months, which is disappointing to participants who hoped to hear about an export cut.
      • The Bank of Korea left its repurchase rate unchanged at 1.25%, as expected.
  • Major European indices trade near their flat lines with Italy's MIB showing relative weakness. UK's FTSE unch, Germany's DAX -0.1%, France's CAC -0.1%, Italy's MIB -0.5%.
    • In economic data:
      • UK's Q1 GDP +0.2% quarter-over-quarter (expected 0.3%; last 0.3%); +2.0% year-over-year (consensus 2.1%; last 2.1%). Index of Services +0.2% (consensus 0.3%; last 0.4%). Q1 Business Investment +0.6% quarter-over-quarter (expected 0.2%; last -0.9%); +0.8% year-over-year (last -0.9%). BBA Mortgage Approvals 40,800, as expected (last 40,900)
      • Italy's March Industrial New Orders -4.2% month-over-month (last 5.2%); +9.2% year-over-year (last 7.8%). March Industrial Sales +0.5% month-over-month (last 2.0%); +7.2% year-over-year (last 4.6%)
      • Spain's Q1 GDP was left unrevised at 0.8% quarter-over-quarter, as expected (last 0.8%); +3.0% year-over-year, as expected (last 3.0%)
    • In news:
      • British political parties will resume campaigning on Friday after a suspension was called in the wake of the terrorist attack in Manchester.
      • U.S. President Donald Trump is in Brussels today, meeting with representatives from the European Union and North Atlantic Treaty Organization.
      • NATO is in the process of adding Montenegro as its 29th member. The accession is expected to be completed on June 5.

06:00AM ET
[BRIEFING.COM] S&P futures vs fair value: +6.50. Nasdaq futures vs fair value: +19.40.

06:00AM ET
[BRIEFING.COM] Nikkei...19813...+70.20...+0.40%.  Hang Seng...25631...+202.30...+0.80%.

06:00AM ET
[BRIEFING.COM] FTSE...7523.77...+8.90...+0.10%.  DAX...12658.59...+15.70...+0.10%.

04:30PM ET

[BRIEFING.COM] Equities posted their fifth consecutive win on Wednesday with the S&P 500 (+0.3%) jumping to a new record high. The Nasdaq (+0.4%) and the Dow (+0.4%) also settled with modest gains after the FOMC minutes for the May 2-3 meeting led to an uptick in buying interest in the afternoon session.

The FOMC minutes revealed that Committee members agree that it will soon be appropriate to begin reducing the central bank's massive balance sheet, and provided a possible straightforward approach to do so. Currently, the central bank is holding the balance sheet steady by reinvesting the principal of maturing securities. But, by the end of the year, the Fed would like to introduce a gradual increase of caps to limit the reinvestment.

Taking steps to reduce the Fed's balance sheet would add to the tightening effect from rising rates, but it is worth noting that the plan revealed in the minutes is not as aggressive as it could be if the Fed decided to stop reinvestments altogether. The Fed's willingness to discuss the issue shows that the central bank has pretty good confidence in the economic outlook, having attributed first quarter weakness to transitory factors.

The fed funds futures market still points to the June FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 83.1%, up from yesterday's 78.5%.

U.S. Treasuries took the FOMC minutes in stride, hitting their best levels of the day following the release; the benchmark 10-yr yield slipped two basis points to 2.26%. Meanwhile, the U.S. Dollar Index (97.01, -0.28) moved lower in tandem with interest rates and the CBOE Volatility Index (VIX 9.99, -0.73, -6.8%) dropped below the 10.00 mark.

In the equity market, the S&P 500 drifted within a three-point range going into the FOMC minutes, but then moved to a fresh session high following the release. Eight of eleven sectors settled in positive territory, however, sector leadership was weak. The lightly-weighted materials (+0.7%), utilities (+0.7%), and real estate (+0.6%) spaces paced the advance while the top-weighted technology (+0.5%) and financials (unch) sectors failed to really distinguish themselves.

The energy (-0.4%) sector settled with the telecom services group (-0.7%) at the bottom of the day's leaderboard as crude oil fell 0.3% to $51.35/bbl. The Energy Information Administration (EIA) reported a larger than expected draw in U.S. crude stocks for the week ended May 19 (-4.4 million barrels actual vs -2.4 million barrels consensus). However, the report prompted little to no movement as investors remained cautious ahead of tomorrow's OPEC/non-OPEC production meeting.

In U.S. corporate news, retailers slipped after producing another largely disappointing batch of earnings; Lowe's (LOW 79.85, -2.49) lost 3.0% on downbeat earnings, Tiffany & Co. (TIF 85.03, -8.11) lost 8.7% on worse than expected revenues, and Advance Auto Parts (AAP 133.02, -7.64) dropped 5.4% after missing top and bottom line estimates. The SPDR S&P 500 Retail ETF (XRT 40.40, -0.15) lost 0.4% while the consumer discretionary sector (+0.4%) finished a tick above the broader market.

The remaining sectors--industrials (+0.1%), health care (+0.2%), and consumer staples (+0.5%)--finished the session with modest gains.

On the data front, investors received several economic reports on Wednesday, including April Existing Home Sales, the March FHFA Housing Price Index, and the weekly MBA Mortgage Applications Index:

  • Existing home sales for April decreased 2.3% from March to an annualized rate of 5.57 million units while the Briefing.com consensus expected a reading of 5.65 million. The prior month's reading was revised to 5.70 million from 5.71 million.
    • The key takeaway from the report remains the same: existing home sales are being impeded by a lack of affordable supply, particularly in the lower- and mid-market price range.
  • The FHFA Housing Price Index for March increased 0.6%, which followed an unrevised increase of 0.8% in February.
  • The weekly MBA Mortgage Applications Index increased 4.4% to follow last week's 4.1% decrease.

Tomorrow, investors will receive Initial Claims (Briefing.com consensus 238,000) and April Advance International Trade in Goods. Both reports will cross the wires at 8:30 ET.

  • Nasdaq Composite +14.5% YTD
  • S&P 500 +7.4% YTD
  • Dow Jones Industrial Average +6.3% YTD
  • Russell 2000 +1.9% YTD
Dow: +74.51… | Nasdaq: +24.31… | S&P: +5.97…
NASDAQ Adv/Dec 1441/1352. …NYSE Adv/Dec 1645/1260.

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