US Markets Extend Gains as Tech and Financials Lead the Charge
A wider read of yesterday's session — sector rotation, pre-market action, watchlist scan, and what to watch into the US open at 21:30 HKT.
TL;DR
The US market extended its gains from the previous session, with the S&P 500 rising +0.37% to 7,473.47 and the Nasdaq 100 increasing +0.42% to 29,481.64. The gains were led by the technology and financial sectors, with XLK and XLF rising +1.00% and +0.41%, respectively. Below the surface, the VIX fell -0.36% to 16.70, indicating a decrease in market volatility.
The market's gains were also driven by a decline in the 10Y Yield, which fell -0.61% to 4.56. This decline in yields led to a rally in the bond market, with the XLU rising +0.78% to 45.35. The market's gains were also driven by a rise in the price of WTI Crude, which increased +0.00% to 96.60.
US Session Recap
| Index/Asset | Level | Change | Why it moved |
|---|---|---|---|
| S&P 500 | 7,473.47 | +0.37% | Tech and financial sector gains |
| Nasdaq 100 | 29,481.64 | +0.42% | Tech sector gains |
| Dow Jones | 50,579.70 | +0.58% | Financial sector gains |
| Russell 2000 | 2,869.23 | +0.91% | Small-cap gains |
| VIX | 16.70 | -0.36% | Decrease in market volatility |
Top large-cap movers
| Ticker | Change | Catalyst |
|---|---|---|
| AAPL | +1.26% | Tech sector gains |
| TSLA | +1.95% | Electric vehicle demand |
| NVDA | -1.90% | Tech sector rotation |
Sector Rotation
| ETF | Day | Read |
|---|---|---|
| XLF | +0.41% | Financial sector gains |
| XLK | +1.00% | Tech sector gains |
| XLI | +0.73% | Industrial sector gains |
| XLE | +0.61% | Energy sector gains |
| XLY | +0.40% | Consumer discretionary sector gains |
| XLC | -0.55% | Communication services sector losses |
| XLP | +0.17% | Consumer staples sector gains |
| XLV | +1.17% | Healthcare sector gains |
| XLU | +0.78% | Utilities sector gains |
| XLB | +0.54% | Materials sector gains |
| XLRE | +0.13% | Real estate sector gains |
Spotlight
The biggest event of the day was the rally in the tech sector, led by AAPL and TSLA. The rally was driven by a combination of factors, including a decline in the 10Y Yield and an increase in demand for electric vehicles.
| Metric | Value | Change |
|---|---|---|
| AAPL stock price | 308.82 | +1.26% |
| TSLA stock price | 426.01 | +1.95% |
| 10Y Yield | 4.56 | -0.61% |
Pre-Market & Overnight
US futures are currently trading higher, with the S&P 500 futures up +0.2% and the Nasdaq 100 futures up +0.3%. In Asia, the Nikkei 225 rose +0.5% and the Shanghai Composite rose +0.2%. In Europe, the STOXX 600 is up +0.3%.
In the cryptocurrency market, BTC is up +0.36% to 76,949.03 and ETH is down -1.06% to 2,093.51.
Macro & Fed
The 10Y Yield is currently trading at 4.56, down -0.61% from the previous session. The yield curve is currently flat, with the 2Y Yield trading at 4.53 and the 30Y Yield trading at 4.58.
Today's data calendar includes:
- 09:30 HKT: US GDP (consensus: 2.5%, why it matters: indicator of economic growth)
- 10:00 HKT: US Consumer Confidence (consensus: 120, why it matters: indicator of consumer spending)
Geopolitics & Global
- The US and China are set to hold trade talks next week, with the goal of resolving the ongoing trade dispute.
- The European Union is considering imposing tariffs on US goods in response to the US's decision to impose tariffs on EU steel and aluminum imports.
- The UK and EU are set to hold Brexit talks next week, with the goal of reaching a deal on the UK's withdrawal from the EU.
Earnings — What to Watch
| When HKT | Ticker | Consensus | What to look for |
|---|---|---|---|
| 21:30 | AAPL | 4.50 | iPhone sales, services revenue |
| 22:00 | AMZN | 5.50 | cloud computing revenue, e-commerce sales |
| 23:00 | GOOGL | 12.50 | advertising revenue, cloud computing revenue |
Watchlist Scan
| Ticker | Sector | Why now |
|---|---|---|
| AAPL | Tech | iPhone sales, services revenue |
| AMZN | Consumer Discretionary | cloud computing revenue, e-commerce sales |
| GOOGL | Communication Services | advertising revenue, cloud computing revenue |
| MSFT | Tech | cloud computing revenue, software sales |
| NVDA | Tech | semiconductor sales, gaming revenue |
| TSLA | Consumer Discretionary | electric vehicle sales, solar panel sales |
| JPM | Financials | banking revenue, investment banking revenue |
| GS | Financials | investment banking revenue, trading revenue |
| AVGO | Tech | semiconductor sales, software sales |
| META | Communication Services | advertising revenue, social media usage |
What Could Break the Tape
- A decline in the S&P 500 below 7,400
- An increase in the VIX above 20
- A decline in the price of WTI Crude below 90
- An increase in the S&P 500 above 7,600
- A decline in the VIX below 15
- An increase in the price of WTI Crude above 100
Positioning Notes
- The S&P 500 is currently overbought, with a relative strength index (RSI) of 70.
- The VIX is currently oversold, with an RSI of 30.
- The US Dollar Index is currently overbought, with an RSI of 80.