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End of Day Brief - Tuesday Sept 21 - Markets mixed ahead of Fed day

Dow33919.84-50.63(-0.15%)
Nasdaq14746.39+32.49(0.22%)
SP 5004354.19-3.54(-0.08%)
10-yr Note -1/321.317
NYSEAdv 1739 Dec 1451 Vol 907.0 mln
NasdaqAdv 2349 Dec 1873 Vol 4.0 bln


Industry Watch

Strong: Energy, Health Care
Weak: Industrials, Communication Services


Moving the Market

-- Stocks close mixed in uneven session

-- Lingering uncertainty surrounding Evergrande, infrastructure, and debt ceiling

-- Wait and see for the FOMC policy announcement tomorrow


Stock market little mixed ahead of Fed day

Dow -50.63 at 33919.84, Nasdaq +32.49 at 14746.39, S&P -3.54 at 4354.19

[BRIEFING.COM] The S&P 500 decreased 0.1% on Tuesday in an uneven session, which saw the benchmark index up as much as 0.9% in early action and down as much as 0.2% shortly afterwards. The Dow Jones Industrial Average (-0.2%) also closed slightly lower, while the Nasdaq Composite (+0.2%) and Russell 2000 (+0.2%) closed slightly higher.

Sector performances were equally underwhelming with no sector gaining or losing more than 1.0%. The energy sector outperformed with a 0.4% gain, while the industrials sector underperformed with a 0.7% decline. The communication services sector (-0.3%) was pressured by Walt Disney ($DIS 171.17, -7.44, -4.2%), which provided cautious-sounding business commentary.

Overall buying interest might have been restrained due to a wait-and-see mindset for the FOMC policy announcement tomorrow. There was, however, a preference for growth stocks, as investors presumably wanted to buy the dip in areas less reliant on the economy due to the uncertainty surrounding China's Evergrande, infrastructure, and the debt ceiling.

The Russell 1000 Growth Index increased 0.2%, while the Russell 1000 Value Index decreased 0.3%.

In other corporate news, Johnson & Johnson ($JNJ 164.53, +0.72, +0.4%) said its booster shot at two months provided 94% protection against COVID-19 in the U.S. Uber ($UBER 44.36, +4.57, +11.5%) jumped 11.5% after upwardly revising Q3 guidance, and AutoZone ($AZO 1643.07, +57.91, +3.7%) beat top and bottom-line estimates.

In M&A activity, ConocoPhillips ($COP 59.33, +2.26, +4.0%) agreed to acquire Royal Dutch Shell's Permian Business for $9.5 billion in cash. U.S. Bancorp ($USB 57.10, +1.42, +2.6%) agreed to acquire MUFG Union Bank for $8 billion in cash and stock. DraftKings ($DKNG 52.77, -4.23, -7.4%) proposed to acquire Entain ($GMVHY) for $20 billion in cash and stock.

Separately, housing starts and building permits data for August beat expectations, but that was largely due to multi-family units instead of single-family units. The Treasury market barely reacted to the report and traded in a narrow range in front of the Fed tomorrow.

The 10-yr yield increased two basis point to 1.32% while the 2-yr yield decreased one basis point to 0.21%. The U.S. Dollar Index decreased 0.1% to 93.22. WTI crude futures increased 0.2%, or $0.16, to $70.51/BBL.


Reviewing Tuesday's economic data:

  • Total housing starts increased 3.9% month-over-month in August to a seasonally adjusted annual rate of 1.615 million (Briefing.com consensus 1.560 million) while permits rose 6.0% to a seasonally adjusted annual rate of 1.728 million (Briefing.com consensus 1.600 million).
    • The key takeaway from the report -- and why it isn't as pleasing as the headlines suggest-- is that the upside surprise was driven almost entirely by multi-family units. To wit, single-family starts declined 2.8% month-over-month while permits for single units were up just 0.6%.
  • The current account deficit for the second quarter totaled $190.3 billion. The first quarter deficit was downwardly revised to $189.4 billion from $195.7 billion.

Looking ahead, investors will receive the FOMC Rate Decision, Existing Home Sales for August, and the weekly MBA Mortgage Applications Index on Wednesday.

  • S&P 500 +15.9% YTD
  • Nasdaq Composite +14.4% YTD
  • Dow Jones Industrial Average +10.8% YTD
  • Russell 2000 +10.7% 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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