Stocks End Marginally Lower in a Quiet Trading Day
4:25 pm Wednesday, June 09th, 2021
U.S. stocks ended lower in quiet trading Wednesday, with the S&P 500 hovering slightly below its record close from early May. The S&P 500 continues to face strong resistance at all-time highs and is currently trading little changed in a mixed session.
The price action has been tight-ranged, yet noteworthy in the sense that the S&P 500 once again almost set a record high. It came within one point of its all-time intraday high (4238.04) in the opening minutes of action, but it’s since slipped back below its all-time closing high (4232.60).
The continued inability to break through has potentially restrained risk sentiment and contributed to some defensive positioning ahead of tomorrow’s CPI report for May. The S&P 500 health care (+1.0%), utilities (+0.7%), information technology (+0.4%), and real estate (+0.4%) sectors are showing relative strength.
The top-weighted tech sector has benefited from the 10-yr yield being down three basis points to 1.50% (it slipped below 1.48% earlier today), as lower rates help justify elevated valuations. Conversely, this rate-activity has worked against the financials sector (-0.8%), which is struggling with the industrials sector (-0.9%) in the red.
Note, the decline in long-term rates is being interpreted more as a signpost for peak inflation expectations instead of a flight-to-safety. On a related note, Chipotle Mexican Grill (CMG) and Sherwin-Williams (SHW) said they raised or will raise prices for customers.
Separately, shares of UPS (UPS) were down 5% after the company provided 2023 financial targets. The lower-end of its consolidated revenue guidance range for 2023 was below consensus expectations. Campbell Soup (CPB) is also down 5% following its disappointing earnings report.
Wholesale inventories increased 0.8% m/m in April (Briefing.com consensus 0.8%) following a downwardly revised 1.2% increase (from +1.3%) in March.
