Updated: 01-19-2017

The Market at 04:20PM ET
Dow: -72.32… | Nasdaq: -15.57… | S&P: -8.20…
NASDAQ Vol: 1.66 bln… Adv: 848… Dec: 2215…
NYSE Vol: 890.8 mln… Adv: 739… Dec: 2203…

Moving the Market

A wait-and-see attitude in front of Inauguration Day.

The latest Initial Claims, Housing Starts, and Philadelphia Fed Index reports all lend support to improved growth outlook.

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

04:20PM ET

[BRIEFING.COM] A wait-and-see attitude lingered throughout today's trading session, but the rubber will finally meet the road tomorrow when Donald Trump becomes the 45th President of the United States and gets a chance to deliver on promises that drove the stock market to a fresh record high. The S&P 500 and the Nasdaq closed lower by 0.5% and 0.3%, respectively.

The stock market enjoyed a huge post-election advance, rallying on the vision that Donald Trump promised his electorate; deregulation of the financial industry and increased infrastructure spending. But with over two months to price-in those hopes, investors haven't had much to do as of late but sit back and wait.

This notion has been most apparent in the financial sector (-0.6%), which has been weak despite a growing batch of better-than-expected earnings reports. But in the same breath, after the sector's huge 20.5% Q4 advance, earnings reports are more likely to invoke a "sell-the-news" response.

However, that's not to say the stock market hasn't had its opportunities to move, as the news flow has been steady. For instance, the European Central Bank announced its latest policy decision this morning. The market response was muted, however, as the ECB left rates and the stimulus program unchanged and ECB President Mario Draghi struck a dovish tone in his post-decision press conference. The euro slid in reaction to Mr. Draghi's remarks, but retraced that decline to end higher by 0.3% against the dollar at 1.0660.

Economic data also had its chance to move the market, but a better than expected Housing Starts report (1226K; Briefing.com consensus 1193K) could not prevent homebuilders from retreating. The iShares Dow Jones US Home Construction ETF (ITB 27.63, -0.32) lost 1.1%. Separately, initial claims and the Philadelphia Fed survey were met with a muted reaction.

Conversely, corporate news did have some market-moving impact, pushing the industrial sector (+0.6%) atop of the day's leaderboard. Railroads traded up after Union Pacific (UNP 106.24, +2.47) reported above-consensus earnings and Canadian Pacific (CP 150.31, +5.09) CEO Hunter Harrison left the company to pursue changes at CSX (CSX 45.51, +8.63). Shares of CSX spiked 23.4% after The Wall Street Journal reported Mr. Harrison will partner up with activist investor Paul Hilal.

At the opposite end of today's leaderboard were utilities (-0.9%) and real estate (-1.0%), suffering from an uptick in Treasury yields. Treasuries were in negative territory for the entire session, but the benchmark 10-yr yield retreated from its high by the close, ending higher by four basis points at 2.47%.

Energy (-0.7%) finished only slightly better, ignoring crude oil's modest gain. The commodity finished up 0.5% at $51.27/bbl despite the Energy Information Administration reporting that crude oil inventories had a build of 2.3 million barrels while the consensus called for a draw of 0.342 million barrels.

The top-weighted technology sector (-0.3%) also finished in the red, but ahead of the broader market. Consumer discretionary finished in a similar spot (-0.3%) despite an uptick from its largest component, Amazon (AMZN 809.04, +1.56). The sector was pulled down by retailers who sent the SPDR S&P 500 Retail ETF (XRT 43.52, -0.80) lower by 1.8% on continued weakness following disappointing holiday sales.

Today's economic data included Initial Claims, Housing Starts, and Philadelphia Fed Survey:

  • The latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 252,000. Today's tally was below the revised prior week count of 249,000 (from 247,000). As for continuing claims, they declined to 2.046 million from the revised count of 2.093 million (from 2.087 million).
    • The key takeaway from the report is that it will drive heightened expectations for nonfarm payroll growth in January as this claims report covers the period in which the household and establishment survey for the Employment Situation report are conducted.
  • Housing starts increased to a seasonally adjusted annualized rate of 1.226 million units in December, up from a revised 1.102 million units in November (from 1.09 million). The Briefing.com consensus expected starts to increase to 1.193 million units. Building permits decreased to a seasonally adjusted 1.210 million in December from an upwardly revised 1.212 million (from 1.201 million) for November. The Briefing.com consensus expected a reading of 1.217 million.
    • The key takeaway from the report is that residential construction will be computed as a positive input in Q4 GDP forecasts as the fourth quarter average for privately-owned housing units under construction was 1.8% above the third quarter average.
  • The Philadelphia Fed Survey for January rose to 23.6 from a revised 19.7 (from 21.5) while economists polled by Briefing.com had expected a reading of 15.3.
    • The key takeaway from the report is that it's a first quarter number and it suggests manufacturing activity in the Philadelphia Fed region expanded at an encouraging pace to begin the year.

Investors will not receive any economic data on Friday, allowing them to focus their attention on President-elect Trump's Inauguration at 12:00 ET. 

  • Russell 2000 -0.8% YTD
  • Dow Jones Industrial Average -0.2% YTD
  • S&P 500 +1.1% YTD
  • Nasdaq Composite +3.0% YTD
Dow: -72.32… | Nasdaq: -15.57… | S&P: -8.20…
NASDAQ Adv/Dec 848/2215. …NYSE Adv/Dec 739/2203.

03:30PM ET
[BRIEFING.COM]
  • Crude oil futures ended in the green following the monthly IEA data, despite EIA data showing builds above Consensus for both crude & gasoline inventories
    • Feb crude oil futures rose $0.26 (+0.5%) to $51.37/barrel
    • Baker Hughes rig count data will be released at 1 pm ET tomorrow.
    • Reminder: Oil likely found support near its session low following the EIA release due to monthly IEA report released earlier in the day, which showed OPEC production declines in Dec & a raised global oil demand forecast - see 7:21 am ET comment for highlights
    • EIA highlights:
      • Crude oil inventories had a build of +2.3 mln barrels (consensus called for a draw of -0.342 mln barrels).
      • Gasoline inventories had a build of +6.0 mln barrels (consensus called for a build of +2.023 mln barrels).
      • Distillate inventories had a draw of -1.0 mln barrels.
  • Natural gas ended pit trading near session highs & snapped its 2-session streak of losses on bullish EIA which showed a draw above Consensus
    • Feb natural gas closed $0.08 higher (+2.4%) at $3.37/MMBtu
    • EIA highlights:
      • Natural gas inventory showed a draw of -243 bcf vs expectations for inventory to be a draw of approximately -231 bcf.
      • Working gas in storage was 2,917 Bcf as of Friday, January 13, 2017, according to EIA estimates.
      • Stocks were 431 Bcf less than last year at this time and 77 Bcf below the five-year average of 2,994 Bcf.
      • At 2,917 Bcf, total working gas is within the five-year historical range.
  • In precious metals, gold retreated from a 2-month high hit intra-day yesterday & extended yesterday's modest loss on continued dollar index strength ahead of the Trump Inauguration
    • Feb 2017 gold ended today's session down $10.90 (-0.9%) to $1201.20/oz
    • Mar 2017 silver closed today's session $0.36 lower (-2.1%) at $16.92/oz
  • The dollar index was +0.2% around the 101.17 level, weighed on precious metals 
    • Commodities, as measured by the Bloomberg Commodity Index, were +0.7% around the 88.14 level
Dow: -75.37… | Nasdaq: -14.74… | S&P: -8.52…
NASDAQ Adv/Dec 812/2042. …NYSE Adv/Dec 724/2228.

03:00PM ET

[BRIEFING.COM] The stock market hovers near its session low after ticking down earlier this afternoon. The S&P 500 and the Nasdaq are both down 0.4%.

Consumer discretionary (-0.4%) is poised to log its second-consecutive loss as retailers continue retreating on multiple reports of disappointing holiday sales. Warnings from the likes of Target (TGT 65.29, -1.55), Macy's (M 29.40, -0.03), Kohl's (KSS 40.21, -1.00), Five Below (FIVE 39.69, -1.30), GameStop (GME 23.30, -0.19), and a host of apparel retailers have pushed the SPDR S&P 500 Retail ETF (XRT 43.50, -0.82) lower by 1.9% for the day and 1.3% for the month.

Looking ahead, a bundle of companies are scheduled to report today after the closing bell, including two Dow components. American Express (AXP 76.77, -0.72) and IBM (IBM 166.86, +0.06) will attempt to justify their large Q4 gains. 

Dow: -91.86… | Nasdaq: -17.80… | S&P: -9.62…
NASDAQ Adv/Dec 801/2134. …NYSE Adv/Dec 624/2317.

02:30PM ET

[BRIEFING.COM] Equity indices have dropped to fresh session lows in recent action, finally breaking the stock market's sideways trend. The S&P 500 is lower by 0.5%.

Ten of eleven sectors are in negative territory, with the industrial sector (+0.1%) clinging to a small portion of its earlier gain. Real estate and utilities have lead the retreat, both losing 1.1%, amid today's uptick in Treasury yields. The benchmark 10-yr yield has come down from its session high in tandem with the market's downtick, but remains up four basis points at 2.47%.

There was no particular news catalyst responsible for the latest downtick, which leaves the S&P 500 within 13 points of its January low (2245).

Dow: -99.90… | Nasdaq: -19.80… | S&P: -10.34…
NASDAQ Adv/Dec 763/2164. …NYSE Adv/Dec 588/2348.

02:00PM ET

[BRIEFING.COM] The major averages hover near their session lows, but today's decline remains modest in scope, considering the S&P 500 is down just 0.3%. The benchmark index has approached this week's low, but that underscores the range-bound nature of this week's action.

The financial sector (-0.5%) has been this week's worst performer, falling 2.0%. The sector is now down 0.9% for the month, but this comes after a 14.0% surge in November, which was extended by another 4.4% in December.

Financials have not been able to draw much strength from today's steepening in the yield curve, which has the 30-yr yield rising five basis points to 3.06% while the 2-yr yield is up two basis points at 1.24%. The benchmark 10-yr yield is higher by five basis points at 2.48%.

Dow: -58.31… | Nasdaq: -10.07… | S&P: -6.44…
NASDAQ Adv/Dec 845/2059. …NYSE Adv/Dec 667/2238.

01:35PM ET

[BRIEFING.COM] The major U.S. indices have seen some modest selling pressure since our last update as Steve Mnuchin's confirmation hearing at Capitol Hill remains ongoing. 

A look inside the Dow Jones Industrial Average shows that Exxon Mobil (XOM 84.97, -1.31), Goldman Sachs (GS 231.82, -2.47), & Pfizer (PFE 31.72, -0.31) are underperforming. Exxon is leading the Dow lower after being downgraded this morning to Sell at UBS.

Conversely, UnitedHealth Group (UNH 159.21, +1.47) is the best-performing Dow component as shares recover from this week's earnings-driven decline. 

With today's decline, the DJIA has now eliminated its gains for the year, and is in negative territory for 2017. 

Elsewhere, at the top of the hour, the Treasury's $13 bln 10-year TIPS auction drew a high yield of 0.436% on a bid-to-cover of 2.45.

Dow: -47.11… | Nasdaq: -9.64… | S&P: -5.86…
NASDAQ Adv/Dec 813/2047. …NYSE Adv/Dec 647/2263.

01:05PM ET

[BRIEFING.COM] Today's session has been underpinned by a wait-and-see approach with investors unwilling to make a push in either direction before tomorrow's Presidential Inauguration. The mentality has left the major averages relatively flat with the S&P 500 down a modest 0.2%.

President-elect Trump's unexpected victory in the November 8th presidential election sent the stock market on a huge run as participants bought the promises of deregulation and increased infrastructure spending. However, after having a couple of months to price-in said promises, all investors can do is watch as only time will tell if the dream becomes a reality.

However, today's story had the potential to be a bit different as the European Central Bank made their latest policy decision earlier this morning. But all the hype was put to rest as the ECB left rates and stimulus programs unchanged and ECB President Mario Draghi struck a dovish tone in his post-decision press conference. The euro did slide a bit, and is currently down 0.1% against the dollar, trading near 1.0620.

On the sector leaderboard, industrials (+0.5%) have led the way since the opening bell with railroads giving the sector an extra push. CSX (CSX 44.03, +7.13) has spiked following a Wall Street Journal report that Hunter Harrison will pursue changes at CSX after leaving Canadian Pacific (CP 152.54, +7.40). Telecom services (+0.3%) is the only other sector in positive territory.

At the bottom of the leaderboard is energy (-0.7%) amid the Energy Information Administration's report that crude oil inventories had a build of 2.3 million barrels while the consensus called for a draw of 0.342 million barrels. The energy component has fallen from its session high, but remains up 0.3% and $52.06/bbl.

Financials (-0.5%) and health care (-0.5%) are also notable movers with the latter suffering from a disappointing showing from its biotech components. The three largest biotech names, Amgen (AMGN 153.88, -1.88), Gilead Sciences (GILD 71.50, -0.63), and Celgene (CELG 113.64, -1.58) are all down between 1.0% and 1.5%.

U.S. Treasuries have resided in negative territory for the duration of today's action and currently hover near their session lows. The yield curve has steepened as the front end of the curve has held up a bit better than the back end; the 2-yr yield is one basis point higher at 1.23% while the 30-yr yield is up five basis points at 3.06%.

Today's data included Initial Claims, Housing Starts, and Philadelphia Fed Survey:

  • The latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 252,000. Today's tally was below the revised prior week count of 249,000 (from 247,000). As for continuing claims, they declined to 2.046 million from the revised count of 2.093 million (from 2.087 million).
    • The key takeaway from the report is that it will drive heightened expectations for nonfarm payroll growth in January as this claims report covers the period in which the household and establishment survey for the Employment Situation report are conducted.
  • Housing starts increased to a seasonally adjusted annualized rate of 1.226 million units in December, up from a revised 1.102 million units in November (from 1.09 million). The Briefing.com consensus expected starts to increase to 1.193 million units. Building permits decreased to a seasonally adjusted 1.210 million in December from an upwardly revised 1.212 million (from 1.201 million) for November. The Briefing.com consensus expected a reading of 1.217 million.
    • The key takeaway from the report is that residential construction will be computed as a positive input in Q4 GDP forecasts as the fourth quarter average for privately-owned housing units under construction was 1.8% above the third quarter average.
  • The Philadelphia Fed Survey for January rose to 23.6 from a revised 19.7 (from 21.5) while economists polled by Briefing.com had expected a reading of 15.3.
    • The key takeaway from the report is that it's a first quarter number and it suggests manufacturing activity in the Philadelphia Fed region expanded at an encouraging pace to begin the year.
Dow: -32.68… | Nasdaq: -5.12… | S&P: -4.13…
NASDAQ Adv/Dec 825/2010. …NYSE Adv/Dec 683/2217.

12:30PM ET

[BRIEFING.COM] The morning's sideways trend has carried over into the early afternoon with the S&P 500 (-0.2%) just a tick below its flat line.

Earlier today, the Energy Information Administration reported that crude oil inventories had a build of 2.3 million barrels while the consensus called for a draw of 0.342 million barrels. As a result, crude oil has ticked down to $51.97/bbl in recent action, fighting to stay in the green with a modest 0.1% gain.

Naturally, the energy sector (-0.7%) is also down on the report, hitting a new session low as of late. The sector now sits just ahead of real estate (-1.0%) at the bottom of today's leaderboard.

Treasuries have also reached a fresh session low with the 10-yr yield six basis points higher at 2.48%.

Dow: -42.20… | Nasdaq: -5.29… | S&P: -4.53…
NASDAQ Adv/Dec 807/2007. …NYSE Adv/Dec 649/2234.

12:00PM ET

[BRIEFING.COM] The major averages remain relatively flat while small caps have pushed the Russell 2000 (-0.7%) deep into negative territory. After pacing the post-election rally the small-cap index is in negative territory for the year, posting a 0.6% year-to-date loss.

Investors have continued with a wait-and-see approach, failing to muster up much buying or selling conviction before tomorrow when Mr. Donald Trump will officially become the 45th President of the United States. The stock market has rallied on the hope of deregulation and an uptick in infrastructure spending, but with those aspirations already priced-in, all participants can do is sit back and wait. 

Sector standings remain much the same, with the health care sector performing worse than the broader market. The sector has suffered from a disappointing showing from its biotech components with the three largest biotech names, Amgen (AMGN 154.28, -1.46), Gilead Sciences (GILD 71.38, -0.76), and Celgene (CELG 113.50, -1.75) all down between 1.0% and 1.5%. The iShares Nasdaq Biotechnology ETF (IBB 274.68, -2.13) sits lower by 0.8%.

Dow: -32.16… | Nasdaq: -3.37… | S&P: -3.59…
NASDAQ Adv/Dec 843/1944. …NYSE Adv/Dec 692/2170.

11:30AM ET

[BRIEFING.COM] Equity indices have ticked down as of late, declining in tandem with the U.S. dollar. The S&P 500 is lower by 0.2% while the U.S. Dollar Index (101.38, +0.08) hovers just above its flat line.

Eight of eleven sectors reside in negative territory with energy (-0.6%) leading the retreat even though crude oil remains solidly higher on the day, up 0.9% at $52.32/bbl. The heavily-weighted financials sector sits just above the bottom of the leaderboard with a loss of 0.4%.

The industrial sector (+0.6%) remains ahead of its peers, but its earlier gains have been nearly halved. Telecom services (+0.1%) and consumer discretionary (+0.1%) sit just above their flat lines, fighting to stay out of negative territory for the week.

Dow: -30.85… | Nasdaq: -2.77… | S&P: -3.17…
NASDAQ Adv/Dec 836/1921. …NYSE Adv/Dec 702/2144.

10:55AM ET

[BRIEFING.COM] Equity indices have ticked down in recent action, leaving the three major averages just below their flat lines late this morning. Conversely, the Dow Jones Transportation Average remains near its session high, up 1.0%.

Railroads have driven the DJTA's advance after Hunter Harrison stepped down as CEO of Canadian Pacific (CP 151.15, +5.93) to 'pursue opportunities involving other Class 1 Railroads'. Mr. Harrison turned things around at his former company, more than doubling the value of Canadian Pacific's stock during his tenure.

In terms of potential landing destinations for the highly-prized CEO, the Wall Street Journal reported that Mr. Harrison will be targeting CSX (CSX 43.46, +6.58). The stock has spiked 17.8% on the news, while peers like Union Pacific (UNP 106.88, +3.08) and Norfolk Southern (NSC 114.72, +4.82) are up 3.0% and 4.3%, respectively. Union Pacific reported above-consensus earnings this morning.

U.S. Treasuries have hit fresh session lows in recent action. The 10-yr yield now sits five basis points higher at 2.48%.

Dow: -29.07… | Nasdaq: -3.22… | S&P: -2.96…
NASDAQ Adv/Dec 869/1788. …NYSE Adv/Dec 817/1977.

10:00AM ET

[BRIEFING.COM] The Nasdaq (+0.3%) has outpaced its peers as the S&P 500 and the Dow have been static in early action.

Technology (+0.2%) has contributed to the Nasdaq's advance along with chipmakers, who have pushed the PHLX Semiconductor Index up 0.5%. The sector's cyclical peers reside mostly in positive territory with industrials (+1.0%), consumer discretionary (+0.4%), and materials (+0.1%) all posting gains.

At the bottom of today's leaderboard are the real estate and utilities sectors, showing losses around 0.8%. Financials (-0.5%) have performed only modestly better after a number of regional banks reported mixed earnings results before the opening bell.

Dow: -5.80… | Nasdaq: +15.53… | S&P: +0.12…
NASDAQ Adv/Dec 1113/1333. …NYSE Adv/Dec 1055/1608.

09:45AM ET

[BRIEFING.COM] The stock market opened Thursday flat as investors appear to have a wait-and-see mentality preceding Inauguration Day.

Industrials (+1.1%) have jumped out to an early lead with railroad stocks pacing the advance, while non-cyclical sectors populate the bottom of the leaderboard as four of the five are in negative territory.

Energy (-0.4%) has underperformed thus far despite an uptick in crude oil. The commodity currently hovers near its overnight high, up 1.2% at $52.51/bbl after the International Energy Agency reported that global oil markets were constricting.

Treasuries have bounced back from their overnight lows, but remain below their flat lines. The 10-yr yield is up three basis points at 2.46%.

Dow: -2.36… | Nasdaq: +11.78… | S&P: +0.50…
NASDAQ Adv/Dec 1066/1224. …NYSE Adv/Dec 1194/1413.

09:14AM ET
[BRIEFING.COM] S&P futures vs fair value: -1.30. Nasdaq futures vs fair value: +2.60.

The S&P 500 futures trade one point below fair value after the European Central Bank decided to keep its current policy stance, as was widely expected. ECB President Mario Draghi made dovish-sounding remarks in his press conference following the ECB decision, leading to a retreat in the euro. The single currency is down 0.3% against the dollar at 1.0603.

U.S Treasuries remain in negative territory, but have seen an uptick in buying interest following the ECB decision. The 10-yr yield is up two basis points at 2.45%.

On the corporate front, Netflix (NFLX 142.35, +9.19) is up 6.9% in pre-market trade after reporting better than expected quarterly results and upside Q1 guidance. The company saw its largest ever quarter of net additions, driven by strong acquisition trends in both US and International segments.

Investors received a batch of economic data earlier this morning, with the Philadelphia Fed Survey deviating furthest from expectations. The report for January rose to 23.6 from a revised 19.7 (from 21.5) while economists polled by Briefing.com had expected a reading of 15.3.

Separately, housing starts increased to a seasonally adjusted annualized rate of 1.226 million units in December, up from a revised 1.102 million units in November (from 1.09 million). The Briefing.com consensus expected starts to increase to 1.193 million units. Building permits decreased to a seasonally adjusted 1.210 million in December from an upwardly revised 1.212 million (from 1.201 million) for November. The Briefing.com consensus expected a reading of 1.217 million.

The latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 252,000. Today's tally was below the revised prior week count of 249,000 (from 247,000). As for continuing claims, they declined to 2.046 million from the revised count of 2.093 million (from 2.087 million).


08:55AM ET
[BRIEFING.COM] S&P futures vs fair value: -1.80. Nasdaq futures vs fair value: +2.00.

The S&P 500 futures trade two points (-0.1%) below fair value.

Equity indices in the Asia-Pacific region ended Thursday on a mixed note. Japan's Nikkei (+0.9%) displayed relative strength, climbing as the yen held its ground after sliding during the Wednesday session on Wall Street. Employment data from Australia showed the third consecutive month of growth, but the pace of growth slowed down notably. Elsewhere, Nikkei discussed falling rents in Japan, which will make it more difficult for inflation to reach 2.0%.

  • In economic data:
    • Australia's December Employment Change 13,500 (expected 10,000; last 37,100) and December Unemployment Rate 5.8% (expected 5.7%; last 5.7%). December Participation Rate 64.7% (consensus 64.6%; last 64.6%)
    • New Zealand's November Building Consents -9.2% month-over-month (last 2.0%). December Business NZ PMI 54.5 (last 54.5)
    • Hong Kong's December Unemployment Rate held at 3.3%, as expected

---Equity Markets---

  • Japan's Nikkei gained 0.9% with help from most components. Growth-sensitive names like Fanuc, Yaskawa Electric, Furukawa Electric, Honda, Komatsu, Toho, SUMCO, and Mitsubishi UFJ gained between 2.1% and 3.7%. Toshiba plunged 16.7% amid speculation the company's write-down of a U.S. nuclear could be as much as $8 billion.
  • Hong Kong's Hang Seng shed 0.2%. Cathay Pacific Air fell 4.5% while property names like Sino Land, Henderson Land, New World Development, SHK Properties, and China Resources Land posted losses between 0.7% and 2.3%. Want Want China outperformed, climbing 2.0%.
  • China's Shanghai Composite surrendered 0.4%. Harbin Dongan Auto Engine, Jiangxi Changjiu Biochemical Industry, China United Network Communications, and HuNan Tyen Machinery lost between 4.6% and 7.3%.
  • India's Sensex added 0.2% even though most components ended lower. GAIL surged 5.3% after announcing its Board of Directors will consider issuing bonus shares and fundraising through private placement bonds. Power Grid, Oil & Natural Gas, Tata Motors, and Infosys also outperformed, gaining between 0.8% and 1.8%.

Major European indices trade close to their flat lines while the UK's FTSE (-0.4%) underperforms as the pound (1.2327) adds 0.6% against the dollar. The European Central Bank made no changes to its policy stance, keeping its Deposit Facility Rate and Main Refinancing Rate at a respective -0.4% and 0.0%, as expected. During his press conference, ECB President Mario Draghi struck a dovish tone, leading to a slide in the euro, which is currently down 0.2% at 1.0609 against the dollar.

  • In economic data:
    • Eurozone November Current Account surplus EUR36.10 billion (expected EUR29.30 billion; last surplus EUR28.30 billion)
    • Spain's trade deficit narrowed to EUR1.25 billion from EUR1.80 billion (expected deficit of EUR1.50 billion)
    • Swiss December PPI +0.2% month-over-month, as expected (last 0.1%); 0.0% year-over-year (expected 0.1%; last -0.6%)

---Equity Markets---

  • Germany's DAX is higher by 0.1%. Thyssenkrupp and Fresenius weigh, showing respective losses of 1.6% and 1.1%. Exporters are mixed while financials outperform. BMW is down 0.2%, Daimler sits just above its flat line, and Volkswagen has added 0.5%. Deutsche Bank and Commerzbank lead, rising 1.3% and 4.1%, respectively.
  • France's CAC has added 0.2%. Consumer names are mixed with Essilor International, Accor, and Danone down between 0.6% and 2.2% while Pernod Ricard, Louis Vuitton, and Kering are up between 1.1% and 1.5%.
  • UK's FTSE trades down 0.4%. Energy-related names like BP and Royal Dutch Shell hold respective losses of 0.9% and 1.5%. Homebuilders also lag with Barratt Developments, Taylor Wimpey, and Persimmon down between 1.3% and 1.6%. Pearson has jumped 3.5% after yesterday's 29.1% plunge.

08:36AM ET
[BRIEFING.COM] S&P futures vs fair value: -2.80. Nasdaq futures vs fair value: +0.40.

The S&P 500 futures trade three points below fair value.

The latest weekly initial jobless claims count totaled 234,000 while the Briefing.com consensus expected a reading of 252,000. Today's tally was below the revised prior week count of 249,000 (from 247,000). As for continuing claims, they declined to 2.046 million from the revised count of 2.093 million (from 2.087 million).

Housing starts increased to a seasonally adjusted annualized rate of 1.226 million units in December, up from a revised 1.102 million units in November (from 1.09 million). The Briefing.com consensus expected starts to increase to 1.193 million units. Building permits decreased to a seasonally adjusted 1.210 million in December from an upwardly revised 1.212 million (from 1.201 million) for November. The Briefing.com consensus expected a reading of 1.217 million.

The Philadelphia Fed Survey for January rose to 23.6 from a revised 19.7 (from 21.5) while economists polled by Briefing.com had expected a reading of 15.3.


08:00AM ET
[BRIEFING.COM] S&P futures vs fair value: -2.80. Nasdaq futures vs fair value: +0.40.

The S&P 500 futures trade three points below fair value as the U.S. and European equity markets digest the latest European Central Bank release, which left rates and stimulus programs unchanged, as was widely expected. ECB President Mario Draghi will host a press conference to discuss the outlook for policy at 8:30 ET, which is more uncertain and could lead to some market volatility.

Crude oil has bounced back from yesterday's decline after the International Energy Agency reported that global oil markets were constricting. The energy component has added 1.1% and currently trades at $51.64/bbl.

U.S. Treasuries have carried Wednesday's bearish trend into this morning. The benchmark 10-yr yield is near its overnight high, up five basis points at 2.44%.

Today's economic data will include Initial Claims (Briefing.com consensus 252,000), Housing Starts (Briefing.com consensus 1.193 million), and Philadelphia Fed (Briefing.com consensus 15.3). All three reports will cross the wires at 8:30 a.m. ET.

In U.S. corporate news of note:

  • Netflix (NFLX 144.15, +10.89): +8.2% after beating on earnings and issuing upside Q1 guidance. 
  • Kinder Morgan (KMI 21.40, -1.04): -4.6% after missing revenues estimates.
  • Coca-Cola (KO 41.05, -0.24): -0.6% after the company's stock was downgraded to 'Market Perform' from 'Outperform' at Wells Fargo.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mixed note. Japan's Nikkei +0.9%, Hong Kong's Hang Seng -0.2%, China's Shanghai Composite -0.4%, India's Sensex +0.2%.
    • In economic data:
      • Australia's December Employment Change 13,500 (expected 10,000; last 37,100) and December Unemployment Rate 5.8% (expected 5.7%; last 5.7%). December Participation Rate 64.7% (consensus 64.6%; last 64.6%)
      • New Zealand's November Building Consents -9.2% month-over-month (last 2.0%). December Business NZ PMI 54.5 (last 54.5)
      • Hong Kong's December Unemployment Rate held at 3.3%, as expected
    • In news:
      • Employment data from Australia showed the third consecutive month of growth, but the pace of growth slowed down notably.
      • Nikkei discussed falling rents in Japan, which will make it more difficult for inflation to reach 2.0%.
  • Major European indices trade close to their flat lines while the UK's FTSE underperforms as the pound (1.2327) adds 0.6% against the dollar. Germany's DAX -0.1%, France's CAC -0.2%, UK's FTSE -0.5%.
    • In economic data:
      • Eurozone November Current Account surplus EUR36.10 billion (expected EUR29.30 billion; last surplus EUR28.30 billion)
      • Spain's trade deficit narrowed to EUR1.25 billion from EUR1.80 billion (expected deficit of EUR1.50 billion)
      • Swiss December PPI +0.2% month-over-month, as expected (last 0.1%); 0.0% year-over-year (expected 0.1%; last -0.6%)
    • In news:
      • The European Central Bank made no changes to its policy stance, keeping its Deposit Facility Rate and Main Refinancing Rate at a respective -0.4% and 0.0%, as expected.
      • The ECB also kept its quantitative easing program intact, but comments from ECB President Mario Draghi could lead to movement in the euro.

05:59AM ET
[BRIEFING.COM] S&P futures vs fair value: -4.50. Nasdaq futures vs fair value: -7.10.

05:59AM ET
[BRIEFING.COM] Nikkei...19072...+177.90...+0.90%.  Hang Seng...23050...-48.30...-0.20%.

05:59AM ET
[BRIEFING.COM] FTSE...7203.42...-44.20...-0.60%.  DAX...11585.02...-14.40...-0.10%.

04:30PM ET

[BRIEFING.COM] Wednesday's trading session closed in the neighborhood of where it opened as investors generally elected to watch rather than act amid a batch of economic data and a slew of corporate news. The major averages finished mixed with the S&P 500 and the Nasdaq adding 0.2% and 0.3%, respectively, while the Dow fell 0.1%.  A late burst of buying interest led by the financial sector, however, left each of the major averages at, or near, their best levels of the day when the closing bell rang.

Frankly, there wasn't a lot of trading excitement throughout the session.  The major indices all held to tight trading ranges, reined in by a lack of any meaningful sector leadership, a stark jump in long-term rates, and an awareness that Fed Chair Yellen was going to be speaking at 3:00 p.m. ET on the goals of monetary policy.

Ms. Yellen's speech, as it turned out, was mostly an academic exercise.  She didn't provide any "new" information for the market per se, yet her reminder that interest rates are apt to creep higher provided some verbal reassurance that facilitated the positive finish for today's market.

Her speech followed a mixed batch of economic data this morning, which featured a stronger than expected Industrial Production report for December, a weaker than expected NAHB Housing Market Index for January, and the highest year-over-year increase in the Consumer Price Index (+2.1%) since June 2014.

In aggregate, Ms. Yellen's remarks and today's data didn't alter the view that the Fed will continue to abide by its projection for three rate hikes in 2017.

The financial sector (+0.8%) had a slow-developing rally today, but eventually got it in gear toward the end of the session and finished at its highs for the day.  A lackluster response to better-than-expected earnings news from Goldman Sachs (GS 234.29, -1.45), Citigroup (C 57.39, -0.99), and U.S. Bancorp (USB 50.56, +0.25) kept a lid on things, yet there was underlying strength in other components that proved to be an effective offset and a driver of today's gains.

Thus far, the financial sector has been fairly slow to respond to better-than-expected earnings reports as it continues to digest a huge move following the election, which produced a 20.5% gain for the sector in the fourth quarter.  

In other corporate news, Target (TGT 66.85, -4.09) lowered its Q4 guidance following disappointing holiday sales. The news had a ripple effect on other retailers, which led to a 0.3% decline in the SPDR S&P Retail ETF (XRT 44.25, -0.11, -0.39). Naturally, the consumer discretionary sector (-0.2%) felt the pressure and closed near the bottom of today's leaderboard.

The energy sector (-0.3%) also posted a lackluster performance, falling in tandem with crude oil. The commodity's downtick was forced by some renewed strength in the dollar and expectations that U.S. producers will boost output in response to the higher prices. The U.S. Dollar Index (101.25, +0.92) finished 0.9% higher while gold closed down 0.1% at $1,212.10/ozt.

The top-weighted technology sector outperformed the broader market with a 0.3% increase. The sector was driven primarily by a bullish performance from chipmakers, which rebounded from Tuesday's selling and drove a 1.4% gain in the PHLX Semiconductor Index.

The U.S. Treasury market came under selling pressure in the overnight trade -- pressure which never relented much during the regular session.  Securities across the curve were on the defensive, with the belly and back end of the curve getting hit the hardest.  The yield on the 5-yr note jumped 10 basis points to 2.23%.  The yield on the 10-yr note, meanwhile, also increased 10 basis points to 2.42%

Reviewing today's economic data:

  • Total CPI rose 0.3% (Briefing.com consensus +0.3%) in December while core CPI, which excludes food and energy, increased 0.2% (Briefing.com consensus +0.2%). On a year-over-year basis, total CPI is up 2.1% and core CPI has increased 2.2%.
    • The key takeaway from this report is that the consumer inflation rate is steadily rising, which is supporting the Federal Reserve's tightening bias at this juncture.
  • December Industrial Production increased 0.8% (Briefing.com consensus +0.6%) while Capacity Utilization rose to 75.5% (Briefing.com consensus 75.4%).
    • The key takeaway from the report is that overall industrial production remains soft, having slipped at an annual rate of 0.6% in the fourth quarter and increasing just 0.5% year-over-year.
  • The NAHB Housing Market Index for January fell to 67 from a revised 69 in December (from 70).

Tomorrow's economic data will include Initial Claims (Briefing.com consensus 252,000), Housing Starts (1.193 million), and Philadelphia Fed (briefing.com consensus 15.3). All reports will be released at 8:30 a.m. ET.

Dow: -22.05… | Nasdaq: +16.93… | S&P: +4.00…
NASDAQ Adv/Dec 1679/1278. …NYSE Adv/Dec 1564/1353.

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