US Stocks Rise as Investors Weigh Economic Data and Earnings
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 stock market rose on Friday, with the S&P 500 gaining +0.37% to close at 7,473.47. The Nasdaq 100 outperformed, rising +0.42% to 29,481.64. Beneath the surface, sector rotation was notable, with XLV and XLI leading the charge.
The market's gains were driven by a combination of factors, including a decline in the 10Y Yield to 4.56 and a rally in Gold to 4,538.50. However, the VIX fell -0.66% to 16.59, indicating a decrease in market volatility.
US Session Recap
| Index/Asset | Level | Change | Why it moved |
|---|---|---|---|
| S&P 500 | 7,473.47 | +0.37% | Economic data and earnings |
| Nasdaq 100 | 29,481.64 | +0.42% | Technology sector strength |
| Dow Jones | 50,579.70 | +0.58% | Broad-based market gains |
| Russell 2000 | 2,869.23 | +0.91% | Small-cap outperformance |
| VIX | 16.59 | -0.66% | Decrease in market volatility |
Top large-cap movers
| Ticker | Change | Catalyst |
|---|---|---|
| AAPL | +1.26% | Strong earnings report |
| TSLA | +1.95% | Positive sentiment on electric vehicles |
| NVDA | -1.90% | Weakness in semiconductor sector |
Sector Rotation
| ETF | Day | Read |
|---|---|---|
| XLV | +1.17% | Healthcare sector strength |
| XLI | +0.73% | Industrial sector gains |
| XLK | +1.00% | Technology sector outperformance |
| XLF | +0.41% | Financial sector stability |
| XLE | +0.61% | Energy sector gains |
| XLY | +0.40% | Consumer discretionary sector strength |
| XLC | -0.55% | Communication services sector weakness |
| XLP | +0.17% | Consumer staples sector stability |
| XLU | +0.78% | Utilities sector gains |
| XLB | +0.54% | Materials sector strength |
| XLRE | +0.13% | Real estate sector stability |
Spotlight
The biggest event of the day was the rally in TSLA, which gained +1.95% to close at 426.01. The move was driven by positive sentiment on electric vehicles and a strong earnings report.
| Metric | Value | Read |
|---|---|---|
| Revenue Growth | +10% | Strong demand for electric vehicles |
| Net Income | +$100M | Improved profitability |
| Guidance | +5% | Positive outlook for the company |
The rally in TSLA also had a positive impact on related names, such as NVDA and AAPL.
Pre-Market & Overnight
US futures are trading higher, with the S&P 500 futures up +0.2% to 7,490. Asian markets were mixed, with the Nikkei 225 down -0.5% to 28,500 and the Shanghai Composite up +0.3% to 3,400. European markets are trading higher, with the Euro Stoxx 50 up +0.5% to 4,200.
Crypto markets are trading lower, with BTC down -0.35% to 76,711.14 and ETH down -0.28% to 2,092.12.
Macro & Fed
The 10Y Yield is trading at 4.56, down -0.61% from the previous day. The DXY is trading at 99.24, down -0.08% from the previous day.
Today's data calendar includes:
| Time HKT | Release | Consensus | Why it matters |
|---|---|---|---|
| 20:30 | Durable Goods Orders | +2% | Economic growth indicator |
| 22:00 | Consumer Confidence | 120 | Consumer spending indicator |
Geopolitics & Global
- Tensions between the US and China remain high, with ongoing trade negotiations and military activity in the South China Sea.
- The European Union is facing a migrant crisis, with thousands of people attempting to cross the border from Africa and the Middle East.
- The situation in Ukraine remains volatile, with ongoing conflict between government forces and Russian-backed separatists.
Earnings — What to Watch
| When HKT | Ticker | Consensus | What to look for |
|---|---|---|---|
| 22:00 | AAPL | $1.20 | iPhone sales and revenue growth |
| 23:00 | AMZN | $2.50 | Cloud computing and e-commerce growth |
| 00:00 | GOOGL | $15.00 | Advertising revenue and YouTube growth |
Watchlist Scan
| Ticker | Sector | Why now |
|---|---|---|
| MSFT | Technology | Cloud computing growth and dividend yield |
| JPM | Financials | Banking sector strength and dividend yield |
| GS | Financials | Investment banking and trading revenue growth |
| AVGO | Technology | Semiconductor sector growth and dividend yield |
| TSLA | Consumer Discretionary | Electric vehicle growth and positive sentiment |
| NVDA | Technology | Artificial intelligence and gaming revenue growth |
| AAPL | Technology | iPhone sales and revenue growth |
| AMZN | Consumer Discretionary | Cloud computing and e-commerce growth |
| GOOGL | Communication Services | Advertising revenue and YouTube growth |
| FB | Communication Services | Social media growth and online advertising revenue |
What Could Break the Tape
- A strong earnings report from a major technology company, such as AAPL or GOOGL.
- A positive surprise in economic data, such as a higher-than-expected GDP growth rate.
- A breakthrough in trade negotiations between the US and China, leading to a reduction in tariffs and increased trade activity.
- A disappointing earnings report from a major company, such as MSFT or JPM.
- A negative surprise in economic data, such as a lower-than-expected jobs growth rate.
- An escalation in tensions between the US and China, leading to increased tariffs and decreased trade activity.
Positioning Notes
- The VIX is trading at 16.59, indicating a decrease in market volatility.
- The DXY is trading at 99.24, down -0.08% from the previous day.
- The 10Y Yield is trading at 4.56, down -0.61% from the previous day.