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End of Day Briefing - Tuesday Sept. 15, 2020

Tech leadership prevails as Nasdaq rises, Doq weaker as banks has some selling

Dow +2.27 at 27985.60, Nasdaq +133.67 at 11190.33, S&P +17.66 at 3401.20

[BRIEFING.COM] The S&P 500 gained 0.5% on Tuesday, although it started the day up as much as 1.1% in a relatively broad-based continuation of the prior day's rebound. The mega-caps and growth stocks generally outperformed their value-oriented peers.

The Nasdaq Composite advanced 1.2%, reflecting the tech-oriented leadership, while the Russell 2000 (+0.1%) and Dow Jones Industrial Average (unch) finished little changed.

Apple ($AAPL 115.54, +0.19, +0.2%) was the exception to the mega-cap excellence despite the company revealing a new watch with added fitness and health capabilities, a new iPad, and new subscription plans. Shares opened higher by 3.0% but briefly turned negative after the conclusion of its product event in the afternoon, weighing on the major indices.

Most components in the top-weighted S&P 500 information technology sector (+1.0%) still showed relative strength, though, and gains in the communication services (+1.7%), real estate (+1.4%), and consumer discretionary (+1.0%) sectors supported the market. Conversely, the financials (-1.4%), energy (-0.8%), and consumer staples (-0.1%) sectors closed lower.

Losses were broad in the financials sector, but JPMorgan Chase ($JPM 99.28, -3.19, -3.1%) particularly weighed on sentiment after lowering its FY20 net interest income guidance to $55 bln from prior guidance of $56 bln. Citigroup ($C 44.81, -3.34, -6.9%) fell another 7% after falling 5% yesterday on news of a potential penalty from federal regulators.

Other notable laggards included Caterpillar ($CAT 148.60, -4.91, -3.2%) after providing disappointing sales figures for August, Lennar ($LEN 75.90, -3.10, -3.9%) despite reporting better-than-expected earnings results, and Carnival ($CCL 15.93, -1.92, -10.8%) after disclosing a $1 billion stock offering.

Shares of NextEra Energy ($NEE 295.70, +13.78, +4.9%) rose 5% after the utilities company increased its EPS guidance for 2021 and announced a 4:1 stock split.

U.S. Treasuries finished mixed and little changed. The 2-yr yield declined one basis point to 0.13%, and the 10-yr yield increased one basis point to 0.68%. The U.S. Dollar Index was flat at 93.08. WTI crude futures rose 2.9%, or $1.08, to $37.22/BBL.

Reviewing Tuesday's economic data:

  • Industrial production increased 0.4% m/m in August (Briefing.com consensus +1.0%) after increasing an upwardly revised 3.5% (from 3.0%) in July. The capacity utilization rate increased to 71.4% (Briefing.com consensus 71.7%) from an upwardly revised 71.1% (from 70.6%).
    • The key takeaway from the report is the understanding that gains for most manufacturing industries have gradually slowed since June.
  • The Empire State Manufacturing Survey for September was better than expected, checking in at 17.0 (Briefing.com consensus 5.9) versus 3.7 in August.
  • Import prices increased 0.9% in August; and prices, excluding oil, increased 0.7%. Export prices increased 0.5% in August; and prices, excluding agriculture, increased 0.8%.

Looking ahead to Wednesday, investors will receive Retail Sales for August, the FOMC Rate Decision, the NAHB Housing Market Index for September, Business Inventories for August, Net Lon-Term TIC Flows for July, and the weekly MBA Mortgage Applications Index.

  • Nasdaq Composite +24.7% YTD
  • S&P 500 +5.3% YTD
  • Dow Jones Industrial Average -1.9% YTD
  • Russell 2000 -7.8% YTD

Market Snapshot

Dow27985.60+2.27(0.01%)
Nasdaq11190.33+133.67(1.21%)
SP 5003401.20+17.66(0.52%)
10-yr Note 0/320.676
NYSEAdv 1626 Dec 1352 Vol 844.0 mln
NasdaqAdv 1810 Dec 1521 Vol 3.7 bln


Industry Watch

Strong: Information Technology, Communication Services, Utilities, Real Estate
Weak: Financials, Energy


Moving the Market

-- Stock market trades higher but is near session lows

-- Mega-cap and growth stocks outperform

-- Apple (AAPL) gives up early lead after product event


Source: (Briefing.com)(theFly.com)

Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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