Stocks Fall From The Peak On Profit Taking
5:03 pm Wednesday, November 10th, 2021
Stocks end lower Wednesday on profit booking after the recent jump as investors digest hot CPI data for October and rising Treasury yields.
Starting with the Consumer Price Index, total CPI rose 0.9% m/m in October (consensus +0.6%) and was up 6.2% yr/yr — the largest 12-month increase since November 1990. Core CPI, which excludes food and energy, rose 0.6% m/m (consensus +0.4%) and was up 4.6% yr/yr.
In turn, Treasury yields across the curve are in rally mode on renewed expectations for the Fed to hike rates sooner than expected because of rising inflation pressures. The 2-yr yield is up 11 basis points to 0.51%, and the 10-yr yield is up 11 basis points to 1.54%. The U.S. Dollar Index is up 0.7% to 94.65.
The pop in the 10-yr yield is being viewed as an excuse to keep this market in check while acting as a drag on the mega-cap/growth/momentum stocks. The information technology sector (-1.0%), which is home to many of these stocks, is down 1.0%.
Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Facebook (FB), and NVIDIA (NVDA) were down over 1.0% right now.
The energy sector (-2.5%) is the weakest link, though, as oil prices retreat amid bearish inventory data out of the EIA. Conversely, the consumer discretionary (+0.3%), health care (+0.3%), and utilities (+0.3%) sectors are tied for the lead with 0.3% gains.
The consumer discretionary sector is outperforming thanks to rebound in Tesla (TSLA 1059.55, +35.99, +3.5%) amid technical factors and excitement surrounding the Rivian (RIVN) IPO. CNBC currently has the indicated RIVN open at $106.26 after pricing its IPO at $78.
Separately, DoorDash (DASH), Unity Software (U), and RingCentral (RNG) were notable exceptions to the growth-stock trade after pleasing investors with their earnings reports.
