US Stocks Ends With Mild Losses On Profit Taking
4:17 pm Tuesday, May 25th, 2021
The stock market took a breather today after a recent stretch of gains, although the current indication is a little disappointing since today’s session highs came at the open.
There is a semblance of the peak growth narrative today after new home sales for April and the Conference Board’s Consumer Confidence Index for May both missed expectations and decreased on a month-over-month basis. Granted, consumer confidence only dipped 0.3 points to 117.2.
The energy (-1.6%) and materials (-0.2%) sectors are among the laggards, although the industrials sector (+0.4%) is one of today’s top performers. The 10-yr yield is down three basis points to 1.58%, although it was already trading lower before the data was released at 10:00 a.m. ET.
In positive-sounding developments, Moderna (MRNA) announced its COVID-19 vaccine is safe and effective for 12-17 year-olds, United Airlines (UAL) provided an encouraging Q2 outlook, and AutoZone (AZO) beat top and bottom-line estimates. AZO shares are down 2%.
Separately, Adobe (ADBE) was initiated with a Buy rating at Mizuho. Coinbase (COIN) was initiated with an Overweight rating at JP Morgan.
U.S. Treasuries built on their gains from Monday with longer tenors remaining in the lead during a quiet Tuesday session. Treasuries started the day on a modestly higher note, and like yesterday, the opening hour saw some backtracking in shorter tenors that found resistance once the 5-yr note approached yesterday’s closing level. The brief pullback was followed by a slow reversal that had Treasuries inching to fresh highs as the day went on with the market extending its gains after the completion of a strong 2-yr note auction.
New home sales declined 5.9% month-over-month in April to a seasonally adjusted annual rate of 863,000 (consensus 980,000) from a downwardly revised 917,000 (from 1.021 million) in March. On a yr/yr basis, new home sales were up 48.3%, having lapped a very depressed comparison period due to the pandemic.
The Conference Board’s Consumer Confidence Index checked in at 117.2 in May (Briefing.com consensus 118.0) versus a downwardly revised 117.5 (from 121.7) in April.
