The Dow and the S&P 500 hit intraday and closing highs yesterday, with the S&P 500 just 2 points from 4600. Despite the records hit, the major indices gave up much of the gains. There was no panic, just overall sense of buyers taking a breather.
To see the chart, click here.
Still, nine of the eleven S&P 500 sectors finished in the green. Communication Services and Industrials were the laggards, pressured by Facebook (FB) and Lockheed Martin (LMT), respectively, after they reported earnings and issued downside revenue guidance.
S&P 500 Index | +0.18% |
|
Communication Services XLC | -0.89% | |
Consumer Discretionary XLY | +0.02% |
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Consumer Staples XLP | +0.35% |
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Energy XLE | +0.58% |
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Financials XLF | +0.07% |
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Health Care XLV | +0.49% |
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Industrials XLI | -0.62% | |
Materials XLB | +0.28% |
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Real Estate XLRE | +0.46% |
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Technology XLK | +0.28% |
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Utilities XLU | +0.54% |
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Breadth was negative, and the down volume was higher on the NYSE. Despite this, both indexes had significantly more new 52-week highs than lows.
Market Breadth | NYSE | NASDAQ |
Advancing | 1,498 | 2,072 |
Declining | 1,844 | 2,556 |
52 Week High | 202 | 236 |
52 Week Low | 26 | 83 |
Up Volume | 1.51B | 3.93B |
Down Volume | 2.34B | 2.99B |
Billionaires Tax
The Democrats unveiled their latest plan to pay for President Biden’s $3.5 trillion Build Back Better initiative in a 107-page plan, by changing the way they tax billionaires. The proposed plan would eliminate the indefinite deferral of capital gains beginning in 2022. Many wonder if this plan is even constitutional.
Portfolio Approach
There are no weighting changes to our Hotline Model Portfolio this morning.
Today’s Session
Earnings continue to roll in with 30% of the S&P500 having reported, 82% of which topped earning estimates and 80% exceeding on revenue. Two big giants, Microsoft (MSFT) and Google (GOOG/L) reported earnings after the close, which beat estimates. Both are up but well of their highs.
Oil is taking a bit of breather this morning, but WTI is still near $83.50 per barrel. The 10 year is relatively flat at 1.57%, while the greenback is higher.
On the economic front, durable goods fell less than expected in September declining 0.4% vs. -0.9% consensus, the first decline in 5 months. August was revised to +1.3 from +1.1.
To see the chart, click here.
New orders for non-defense capital goods excluding aircraft, which is a proxy for business spending, gained 8%, and well above the 0.5% estimate. Excluding transportation, new orders rose +0.4% and excluding defense, order declined by 2%.
The major indices are relatively flat this morning, with the Dow and S&P slipping slighting into the red.
Charles is in Texas this week and part of the #CampusLibertyTour debates.