Updated: 07-20-2017

The Market at 12:30PM ET
Dow: -15.68… | Nasdaq: +9.71… | S&P: +2.01…
NASDAQ Vol: 852.0 mln… Adv: 1447… Dec: 1314…
NYSE Vol: 300.0 mln… Adv: 1461… Dec: 1370…

Moving the Market

ECB & BoJ leave policy programs unchanged; ECB President Draghi says substantial degree of accommodation still needed

Countercyclical sectors outperform, Treasuries rally amid risk-off sentiment

Sector Watch
Strong: Health Care, Consumer Staples, Utilities, Telecom Services, Real Estate
Weak: Financials, Consumer Discretionary, Industrials, Energy, Materials

12:30PM ET

[BRIEFING.COM] Equity indices have ticked up since the last update with the Nasdaq now sporting a gain of 0.2%.

Seven of the eleven sectors are trading in the green with gains ranging from 0.1% to 1.2%. The influential health care sector is one of the strongest spaces, jumping 0.7%, amid broad strength. Biotechnology names have shown particular resolve, pushing the iShares Nasdaq Biotechnology ETF (IBB 322.72, +309) higher by 1.0%. However, pharmaceutical giant Pfizer (PFE 33.49, -0.13) has struggled, losing 0.4%, after the company's shares were downgraded to 'Neutral' from 'Outperform' at Credit Suisse. 

On a related note, Senate Republicans are planning to hold a vote next week that would open a formal debate on health-care reform, however, Senator John McCain's (R-AZ) office revealed last night that the Senator has been diagnosed with brain cancer. It's unclear if Mr. McCain plans to be in Washington for next week's vote, but if he isn't, it will make obtaining the 50 required votes even more difficult for the GOP.

Dow: -15.68… | Nasdaq: +9.71… | S&P: +2.01…
NASDAQ Adv/Dec 1447/1314. …NYSE Adv/Dec 1461/1370.

12:00PM ET

[BRIEFING.COM] Stocks continue trending sideways moving into the afternoon session with the S&P 500 (unch) keeping within a five-point range over the last hour of action.

Crude oil has retraced its earlier gain of 0.9% and now trades lower by 0.5% at a price of $47.08/bbl. There is no word of a catalyst behind the move, but it comes on the heels of a two-week rally in the WTI crude futures market. The energy sector (-0.3%), which typically moves in tandem with the price of oil, trades behind the broader market.

The U.S. Dollar Index (94.06, -0.59) has dropped 0.6% to an 11-month low following the latest policy decisions from the European Central Bank and the Bank of Japan. Both central banks left their policy programs unchanged with ECB President Mario Draghi saying a substantial degree of stimulus is still needed.

Dow: -50.14… | Nasdaq: +1.92… | S&P: -0.91…
NASDAQ Adv/Dec 1351/1402. …NYSE Adv/Dec 1350/1460.

11:30AM ET

[BRIEFING.COM] Equity indices trade just a tick below their flat lines late this morning with the Dow Jones Industrial Average (-0.2%) exhibiting relative weakness.

Home-appliance retailers and manufacturers like Home Depot (HD 146.35, -6.97), Lowe's (LOW 72.45, -4.42), and Whirlpool (WHR 189.12, -9.26) have dropped 4.6%, 5.8%, and 4.6%, respectively, following news that Sears Holdings (SHLD 9.87, +1.19) will soon be selling Kenmore appliances on Amazon.com (AMZN 1029.73, +2.86). Conversely, SHLD shares have spiked 13.9% to a fresh two-month high following the news.

Meanwhile, the consumer discretionary sector (-0.2%) underperforms and is currently in danger of breaking its three-session winning streak. However, for the week, the group is still up 0.9%.

Dow: -48.74… | Nasdaq: -1.26… | S&P: -1.57…
NASDAQ Adv/Dec 1320/1432. …NYSE Adv/Dec 1320/1457.

11:00AM ET

[BRIEFING.COM] The major averages have slipped into the red this morning, giving back their modest opening gains. The S&P 500 currently holds a loss of 0.1%.

Six of the eleven sectors are trading in negative territory with the materials (-0.8%) and industrials (-0.6%) spaces hovering at the bottom of the leaderboard. Transports are among the industrial group's weakest components, evidenced by the Dow Jones Transportation Average's loss of 1.2%, with Union Pacific (UNP 104.65, 3.20) leading the retreat. The railroad company has dropped 3.0% despite beating top and bottom line estimates. 

As for the five advancers, the telecom services sector (+0.6%) is the strongest group. Within the wireless space, T-Mobile US (TMUS 61.23, -0.71) has tumbled 1.1% despite beating top and bottom line estimates and raising its full-year guidance. Meanwhile, large-cap telecom names like Verizon (VZ 43.76, +0.30) and AT&T (T 36.37, +0.24) hold gains of 0.7% apiece. 

Dow: -21.76… | Nasdaq: -4.74… | S&P: -0.26…
NASDAQ Adv/Dec 1396/1294. …NYSE Adv/Dec 1489/1248.

10:40AM ET

[BRIEFING.COM] Commodities are beginning the day higher:

  • Overall, commodities, as measured by the Bloomberg Commodity Index, are currently higher 0.57% at 84.1115
  • Dollar index is currently down 0.45 % at 94.35
  • Looking at energy...
    • Sept WTI crude oil futures are up $0.30 at $47.42/barrel
    • August natural gas has rallied since the release of EIA inventory data
      • The data showed a draw of 28 bcf
    • August natural gas futures are up $0.025 at $3.091/MMBtu
  • Moving on to metals...
    • Aug gold is up $3.10 at $1245.10/oz, while Sept silver is up $0.018 at $16.315/oz
    • Sept copper is up $0.001 at $2.7115/lb
  • In agriculture...
    • Sept corn futures are up $0.075 at 4.0375
    • November soy futures are up $0.135 at 10.26
    • Sept wheat futures are up $0.0125 at 5.0425
Dow: -57.97… | Nasdaq: -18.18… | S&P: -5.1…
NASDAQ Adv/Dec 1249/1445. …NYSE Adv/Dec 1337/1397.

10:05AM ET

[BRIEFING.COM] The benchmark S&P 500 continues to hover just a tick above its flat line.

Just in, the Conference Board's Leading Indicators report for June increased 0.6% (Briefing.com consensus 0.4%) after moving higher by an unrevised 0.3% in May.

Dow: -7.73… | Nasdaq: +8.71… | S&P: +2.72…
NASDAQ Adv/Dec 1378/1199. …NYSE Adv/Dec 1536/1129.

09:40AM ET

[BRIEFING.COM] The major averages opened Thursday's session in the green with the S&P 500 sporting a slim gain of 0.1%.

Sector movement has been pretty modest in the early going with most groups hovering within 0.2% of their unchanged marks. The energy sector (+0.5%) is demonstrating relative strength while the materials (-0.4%) and consumer staples (-0.2%) groups trade at the back of the pack.

U.S. Treasuries are rallying in a curve-flattening trade; the 10-yr yield is down two basis points at 2.25% while the 2-yr yield is down just one basis point at 1.35%.

Dow: -14.70… | Nasdaq: +4.62… | S&P: +1.55…
NASDAQ Adv/Dec 1225/1271. …NYSE Adv/Dec 1477/1088.

09:18AM ET
[BRIEFING.COM] S&P futures vs fair value: +3.00. Nasdaq futures vs fair value: +12.80.

It appears that the stock market will open Thursday's session little changed from yesterday's record-closing level. The S&P 500 futures trade three points, or 0.1%, above fair value.

As expected, the European Central Bank decided to leave its key interest rates and its asset-purchase program unchanged. President Mario Draghi is currently giving his post-decision press conference. So far, Mr. Draghi has mentioned that the economy has continued to see economic expansion, but underlying inflation remains subdued and a substantial degree of accommodation is still needed. 

The Bank of Japan also decided to leave its policy stance as is, but the central bank did acknowledge that reaching its 2.0% inflation target will take at least until fiscal year 2019/20. Inflation during fiscal year 2017/18 is now expected to hit 1.1%, down from previous expectations for an increase of 1.4%.

U.S. Treasuries are trading higher while the U.S. dollar is trading lower; the benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, is down two basis points at 2.26% while the U.S. Dollar Index (94.55, -0.10) has shed 0.1%.

In corporate news, Dow components American Express (AXP 83.90, -2.03) and Travelers (TRV 124.00, -2.46) are both down following their latest earnings reports, dropping 2.4% and 2.0%, respectively. AXP beat top and bottom line estimates, but reported a 33.0% decline in profit for the second quarter. Meanwhile, TRV missed bottom-line estimates.

Philip Morris (PM 118.62, -3.00) and Qualcomm (QCOM 55.74, -1.04) are also trading lower, down 2.5% and 1.8%, respectively. PM missed both top and bottom line estimates in addition to lowering its earnings per share outlook for 2017. QCOM reported better than expected earnings and revenues, but slipped on downbeat earnings guidance. 

On the data front, the latest weekly initial jobless claims count totaled 233,000 while the Briefing.com consensus expected a reading of 245,000. Today's tally was below the revised prior week count of 248,000 (from 247,000). As for continuing claims, they rose to 1.977 million from the revised count of 1.949 million (from 1.945 million).

Separately, the Philadelphia Fed Survey for July declined to 19.5 from an unrevised 27.6 in June while economists polled by Briefing.com had expected a reading of 22.0.

Today's last economic report--the June Leading Indicators Index (Briefing.com consensus 0.4%)--will cross the wires at 10:00 ET.


08:50AM ET
[BRIEFING.COM] S&P futures vs fair value: +3.00. Nasdaq futures vs fair value: +12.80.

The S&P 500 futures trade three points, or 0.1%, above fair value.

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. The Bank of Japan made no changes to its policy stance, but did acknowledge that reaching its 2.0% inflation target will take at least until fiscal year 2019. Inflation during fiscal year 2017/18 is now expected to hit 1.1%, down from previous expectations for an increase of 1.4%. South Korea's Finance Minister Kim Dong-Yeon is expected to discuss economic policy next week.

  • In economic data:
    • Japan's June trade surplus JPY80 million (expected surplus of JPY120 billion; last surplus of JPY120 billion). June Imports +15.5% year-over-year (consensus 14.8%; last 17.8%) and June Exports +9.7% year-over-year (consensus 9.5%; previous 14.9%). All Industries Activity Index -0.9% month-over-month (expected -0.8%; last 2.3%)
    • Hong Kong's June CPI +1.9% year-over-year (last 2.0%)
    • Australia's June Employment Change 14,000 (expected 15,000; last 38,000) and Full Employment Change 62,000 (last 53,400). June Participation Rate 65.0% (expected 64.9%; last 64.9%) and June Unemployment Rate 5.6%, as expected (last 5.6%)

---Equity Markets---

  • Japan's Nikkei climbed 0.6% amid help from most components. Chugai Pharmaceutical, TDK, SUMCO, Hitachi Construction, Advantest, Trend Micro, Tokyo Electron, Olympus, Furukawa Electric, and Isuzu Motors gained between 1.3% and 4.9%.
  • Hong Kong's Hang Seng rose 0.3% to a fresh high for the year. Apple supplier AAC Technologies led, spiking 5.8%, while financials like AIA Group, ICBC, HSBC, Hang Seng Bank, and BoC Hong Kong added between 0.1% and 1.4%. Want Want China was the weakest performer, falling 1.5%.
  • China's Shanghai Composite added 0.4%. Xiamen Faratronic, Minmetals Development, HuNan Tyen Machinery, Cangzhou Danhua, and Shinva Medical Instrument rallied between 7.6% and 10.0%.
  • India's Sensex shed 0.2% with most components ending lower. Tata Steel lost 2.6% while Infosys, Wipro, and Tata Consultancy posted losses between 0.5% and 1.1%. Financials were mixed as AXIS Bank jumped 3.9%, HDFC Bank rose 0.9%, ICICI Bank fell 0.5%, and SBI surrendered 0.9%.

Major European indices trade in the green. The European Central Bank decided to leave its monetary policy unchanged, as expected. President Mario Draghi is currently giving his post-decision press conference. So far, Mr. Draghi has mentioned that the economy has continued to see economic expansion, but underlying inflation remains subdued and a substantial degree of accommodation is needed.

  • In economic data:
    • Eurozone May Current Account EUR30.10 billion (expected EUR23.30 billion; last EUR23.50 billion)
    • Germany's June PPI 0.0% month-over-month (expected -0.1%; last -0.2%); +2.4% year-over-year (consensus 2.3%; last 2.8%)
    • UK's June Retail Sales +0.6% month-over-month (expected 0.4%; last -1.1%); +2.9% year-over-year (consensus 2.5%; last 0.9%). June Core Retail Sales +0.9% month-over-month (expected 0.5%; last -1.5%); +3.0% year-over-year (consensus 2.5%; last 0.6%)
    • Swiss June trade surplus narrowed to CHF2.81 billion from CHF3.39 billion (expected surplus of CHF2.89 billion.

---Equity Markets---

  • UK's FTSE trades up 1.0% with consumer names in the lead following today's retail sales report. Kingfisher, Dixons Carphone, Next, Marks & Spencer, and Tesco are up between 1.1% and 2.6%. Select financials also display strength with Old Mutual, Prudential, Aviva, Admiral Group, and Lloyds Banking showing gains between 0.5% and 1.4%.
  • Germany's DAX has climbed 0.9% with heavyweights like Siemens, BASF, Thyssenkrupp, Bayer, and Merck rising between 0.9% and 2.8%. SAP is lower by 0.4% despite in-line results while Lufthansa has slid 6.6% after earnings from UK's EasyJet showed ticket price pressures.
  • France's CAC is higher by 0.6%. Publicis Groupe has jumped 4.7% in reaction to earnings while consumer stocks like Kering, Carrefour, and Louis Vuitton are up between 0.5% and 1.1%. Automakers Peugeot and Renault hold gains of 1.0% apiece. On the downside, ArcelorMittal is the weakest performer, falling 0.5%.

08:32AM ET
[BRIEFING.COM] S&P futures vs fair value: +4.30. Nasdaq futures vs fair value: +15.60.

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

Just in, the latest weekly initial jobless claims count totaled 233,000 while the Briefing.com consensus expected a reading of 245,000. Today's tally was below the revised prior week count of 248,000 (from 247,000). As for continuing claims, they rose to 1.977 million from the revised count of 1.949 million (from 1.945 million).

Separately, the Philadelphia Fed Survey for July declined to 19.5 from an unrevised 27.6 in June while economists polled by Briefing.com had expected a reading of 22.0.


08:00AM ET
[BRIEFING.COM] S&P futures vs fair value: +2.00. Nasdaq futures vs fair value: +10.00.

Equity futures are pointing to a slightly higher open this morning coming off yesterday's advance to new record highs. The S&P 500 futures are currently trading two points, or 0.1%, above fair value.

The S&P 500, the Nasdaq, the Dow, and the Russell 2000 all finished at new record highs on Wednesday with the tech-heavy Nasdaq extending its winning streak to nine sessions in a row. Technology names will be a focal point again today as persistently-weak economic data--specifically, weak wage growth data--has tempered rate-hike concerns and placed a renewed premium on growth stocks.

As expected, the European Central Bank and the Bank of Japan left their policy programs unchanged. Investors will be looking for clues in President Mario Draghi's post-decision press conference, which will begin at 8:30 ET, as to when the ECB might start tempering its asset-purchase program. The benchmark 10-yr yield is one basis point lower at 2.27% while the U.S. Dollar Index (94.95, +0.31) is up 0.3%. 

Senate Republicans are planning to hold a vote next week that would open a formal debate on health-care reform, however, Senator John McCain's (R-AZ) office revealed last night that the Senator has been diagnosed with brain cancer. It's unclear if Mr. McCain plans to be in Washington for next week's vote, but if he isn't, it will make obtaining the 50 required votes even more difficult for the GOP.

Oil prices are steady this morning with WTI crude up 0.4% at $47.52/bbl. The energy component is coming off two-consecutive advances and currently trades higher by 2.1% for the week.

On the data front, investors will receive several economic reports, including the July Philadelphia Fed Index (Briefing.com consensus 22.0) at 8:30 ET, the weekly Initial Claims Report (Briefing.com consensus 245K) also at 8:30 ET, and the June Leading Indicators Index (Briefing.com consensus 0.4%) at 10:00 ET.

In U.S. corporate news:

  • American Express (AXP 84.65, -1.28): -1.5% after reporting a 33.0% decline in profit for the second quarter. However, the company did beat top and bottom line estimates.
  • Travelers (TRV 125.00, -1.46): -1.2% after missing bottom-line estimates.
  • Qualcomm (QCOM 55.53, -1.25): -2.2% after below-consensus earnings guidance overshadowed better than expected earnings and revenues.
  • T-Mobile US (TMUS 63.75, +1.78): +2.9% after reporting above-consensus earnings and revenues and raising its full-year guidance.
  • Nike (NKE 59.00, +1.23): +2.1% after NKE shares were upgraded to 'Overweight' from 'Equal-Weight' at Morgan Stanley.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Japan's Nikkei +0.6%, Hong Kong's Hang Seng +0.3%, China's Shanghai Composite +0.4%, India's Sensex -0.2%.
    • In economic data:
      • Japan's June trade surplus JPY80 million (expected surplus of JPY120 billion; last surplus of JPY120 billion). June Imports +15.5% year-over-year (consensus 14.8%; last 17.8%) and June Exports +9.7% year-over-year (consensus 9.5%; previous 14.9%). All Industries Activity Index -0.9% month-over-month (expected -0.8%; last 2.3%)
      • Hong Kong's June CPI +1.9% year-over-year (last 2.0%)
      • Australia's June Employment Change 14,000 (expected 15,000; last 38,000) and Full Employment Change 62,000 (last 53,400). June Participation Rate 65.0% (expected 64.9%; last 64.9%) and June Unemployment Rate 5.6%, as expected (last 5.6%)
    • In news:
      • The Bank of Japan made no changes to its policy stance, but did acknowledge that reaching its 2.0% inflation target will take at least until fiscal year 2019. Inflation during fiscal year 2017/18 is now expected to hit 1.1%, down from previous expectations for an increase of 1.4%.
      • South Korea's Finance Minister Kim Dong-Yeon is expected to discuss economic policy next week.
  • Major European indices trade in the green. UK's FTSE +0.7%, Germany's DAX +0.6%, France's CAC +0.4%.
    • In economic data:
      • Eurozone May Current Account EUR30.10 billion (expected EUR23.30 billion; last EUR23.50 billion)
      • Germany's June PPI 0.0% month-over-month (expected -0.1%; last -0.2%); +2.4% year-over-year (consensus 2.3%; last 2.8%)
      • UK's June Retail Sales +0.6% month-over-month (expected 0.4%; last -1.1%); +2.9% year-over-year (consensus 2.5%; last 0.9%). June Core Retail Sales +0.9% month-over-month (expected 0.5%; last -1.5%); +3.0% year-over-year (consensus 2.5%; last 0.6%)
      • Swiss June trade surplus narrowed to CHF2.81 billion from CHF3.39 billion (expected surplus of CHF2.89 billion.
    • In news:
      • The European Central Bank left rates and its asset-purchase program unchanged, as expected.
      • ECB President Mario Draghi will hold his post-decision press conference shortly at 8:30 ET.

05:55AM ET
[BRIEFING.COM] S&P futures vs fair value: +1.40. Nasdaq futures vs fair value: +0.75.

05:53AM ET
[BRIEFING.COM] Nikkei...20145...+123.70...+0.60%.  Hang Seng...26740...+68.10...+0.30%.

05:53AM ET
[BRIEFING.COM] FTSE...7476.39...+45.50...+0.60%.  DAX...12514.20...+62.20...+0.50%.

04:30PM ET

[BRIEFING.COM] The Nasdaq (+0.6%) kept on rolling in the midweek session, cruising to its ninth-consecutive victory--which marks its longest winning streak in two years--and a new all-time high. The S&P 500 (+0.5%), the Dow (+0.3%), and the Russell 2000 (+1.0%) also notched new record closes, finishing at their best marks of the day.

Today's win was a team effort with all 11 of the S&P 500's sectors finishing in positive territory. The industrial sector (+0.2%) was the weakest performer while the energy group (+1.4%) was the strongest.

The energy space was underpinned by a positive performance from crude oil, which climbed 1.5% to $47.31/bbl on the heels of a better than expected EIA inventory report. According to the Department of Energy, U.S. crude stockpiles declined by 4.7 million barrels last week while the consensus expected a draw of just 3.5 million barrels.

Elsewhere, the influential health care sector (+0.8%) exhibited strength throughout the session with Vertex Pharmaceuticals (VRTX 159.69, +27.53) leading the charge. VRTX shares spiked 20.8% to a fresh all-time high after the biotech company announced positive clinical trial results for three of its newest Cystic-Fibrosis drugs. Unsurprisingly, the iShares Nasdaq Biotechnology ETF (IBB 319.63, +4.49) finished comfortably ahead of the broader market, climbing 1.4%.

The top-weighted technology sector (+0.6%) advanced for the ninth session in a row, but struggled to keep ahead of the broader market. IBM (IBM 147.53, -6.47) weighed on the group, dropping 4.2%, after reporting a decline in revenue for the 21st quarter in a row. Meanwhile, chipmakers finished modestly ahead of the benchmark index, evidenced by the 0.9% increase in the PHLX Semiconductor Index.

As for the laggards, financials struggled to stay afloat despite relatively upbeat earnings reports from Morgan Stanley (MS 46.62, +1.48) and US Bancorp (USB 52.08, +0.45). MS shares jumped 3.3% after the company reported better than expected earnings and revenues while USB shares added 0.9% after the company beat bottom-line estimates. Still, no matter how small the margin of victory, the financial group (+0.2%) managed to put an end to its three-session losing streak.

Like financials, the industrial group finished at the back of the pack. Transports weighed, sending the Dow Jones Transportation Average lower by 0.6%, with CSX (CSX 51.87, -2.77) and United Continental (UAL 74.24, -4.66) pacing the retreat. Both companies beat earnings per share estimates, with CSX also reporting better than expected revenues, but slipped on relatively unimpressive third-quarter guidance. CSX shares dropped 5.1% while UAL shares slipped a bit further, losing 5.9%.

In the bond market, U.S. sovereign debt finished relatively flat as participants hesitated to alter their positioning ahead of policy statements from two major central banks--the Bank of Japan and the European Central Bank. The BoJ will release its policy decision overnight while the ECB will release its decision tomorrow morning. The benchmark 10-yr yield climbed one basis point to 2.27%.

Reviewing Wednesday's economic data, which was limited to June Housing Starts and the weekly MBA Mortgage Applications Index:

  • Housing starts increased to a seasonally adjusted annualized rate of 1.215 million units in June (Briefing.com consensus 1.160 million), up from a revised 1.122 million units in May (from 1.092 million). Building permits increased to a seasonally adjusted 1.254 million in June (Briefing.com consensus 1.196 million), up from an unrevised 1.168 million in May.
    • The key takeaway from the report is that there was solid growth in both single-family starts (+6.3%) and permits for single-family homes (+4.1%), both of which are important given the supply constraints in the housing market that have crimped affordability for many prospective home buyers.
  • The weekly MBA Mortgage Applications Index rose 6.3% to follow last week's 7.4% decrease.

On Thursday, investors will receive several economic reports, including the July Philadelphia Fed Index (Briefing.com consensus 22.0) at 8:30 ET, the weekly Initial Claims Report (Briefing.com consensus 245K) also at 8:30 ET, and the June Leading Indicators Index (Briefing.com consensus 0.4%) at 10:00 ET.

  • Nasdaq Composite +18.6% YTD
  • S&P 500 +10.5% YTD
  • Dow Jones Industrial Average +9.5% YTD
  • Russell 2000 +6.2% YTD
Dow: +66.02… | Nasdaq: +40.74… | S&P: +13.22…
NASDAQ Adv/Dec 1821/997. …NYSE Adv/Dec 2187/725.

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