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End of Day Brief - Monday July 26 - Markets just drifting

Dow35144.31+82.76(0.24%)
Nasdaq14840.70+3.72(0.03%)
SP 5004422.30+10.51(0.24%)
10-yr Note -24/321.299
NYSEAdv 1840 Dec 1436 Vol 870.7 bln
NasdaqAdv 1926 Dec 2447 Vol 4.3 bln


Industry Watch

Strong: Energy, Materials, Consumer Discretionary, Communication Services
Weak: Health Care


Moving the Market

-- Lack of trading conviction ahead of big earnings news, key economic data, Fed's policy decision this week

-- Energy stocks were a pocket of strength, though

-- New home sales report for June was disappointing, which pressured homebuilding stocks


Just drifting

Dow +82.76 at 35144.31, Nasdaq +3.72 at 14840.70, S&P +10.51 at 4422.30

[BRIEFING.COM] The S&P 500 (+0.2%), Dow Jones Industrial Average (+0.2%), and Nasdaq Composite (+0.03%) eked out intraday and closing record highs on Monday, although there wasn't that much conviction ahead of a big week that will include an abundance of earnings news, GDP data, and the Fed's policy meeting.

The small-cap Russell 2000 had the performance edge with a 0.3% gain amid strength in energy stocks.

Likewise, the only S&P 500 sector that saw outsized demand was the energy sector (+2.5%), rising 2.5% without any help from oil prices ($71.97/BBL, -0.12, -0.2%). No other sector gained or lost more than 1.0%. The health care sector (-0.6%) underperformed with a 0.6% decline.

Shares of Tesla ($TSLA 657.62, +14.24, +2.2%) rose 2% ahead of its earnings report after the close while Amazon.com ($AMZN 3699.82, +43.18, +1.2%) rose 1% amid a speculative report from City A.M. that the company is considering accepting bitcoin as a payment option. That report, however, was refuted by Amazon around the close.

Amazon will report earnings later this week along with Apple ($AAPL 148.99, +0.43, +0.3%), Microsoft ($MSFT 289.05, -0.62, -0.2%), Alphabet ($GOOG 2792.89, +36.57, +1.3%), Facebook ($FB 372.46, +2.67, +0.7%), and about one-third of the S&P 500.

Lockheed Martin ($LMT 367.84, -12.93, -3.4%) was one of today's earnings losers despite beating EPS estimates and raising its FY21 EPS guidance above consensus. Separately, homebuilding stocks struggled following a disappointing new home sales report for June, and Chinese ADRs continued to get smacked amid regulatory issues.

New home sales declined 6.6% m/m in June to a seasonally adjusted annual rate of 676,000 (Briefing.com consensus 800,000), highlighting affordability pressures in the market. On a yr/yr basis, new home sales were down 19.4%. The iShares US Home Construction ETF ($ITB 69.48, -0.78, -1.1%) declined 1%.

In the Treasury market, the 10-yr yield settled at 1.28%, or one basis point below Friday's settlement, after touching 1.22% overnight. The 2-yr yield increased one basis point to 0.20%. The U.S. Dollar Index decreased 0.3% to 92.62.

Reviewing Monday's economic data:

  • New home sales declined 6.6% month-over-month in June to a seasonally adjusted annual rate of 676,000 (Briefing.com consensus 800,000) from a downwardly revised 724,000 (from 769,000) in May. On a yr/yr basis, new home sales were down 19.4%.
    • The key takeaway from the report is that new home sales, which are counted when contracts are signed, are being squeezed by affordability pressures that have increased with prices and mortgage rates.

Looking ahead, investors will receive the Conference Board's Consumer Confidence Index for July, Durable Goods Orders for June, the FHFA Housing Price Index for may, and the S&P Case-Shiller Home Price Index for May on Tuesday.

  • S&P 500 +17.7% YTD
  • Nasdaq Composite +15.2% YTD
  • Dow Jones Industrial Average +14.8% YTD
  • Russell 2000 +12.3% YTD

Source: (Briefing.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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