Stocks Pullback After Last Week’s Solid Jump
2:40 pm Monday, November 14th, 2022
The S&P 500 fell in the final hour of trading Monday as it struggled to build on its biggest weekly gain in almost five months.
Market participants are also reacting the New York Fed’s Survey of Consumer Expectations release, which showed the median one- and three-year-ahead inflation expectations increased to 5.9 percent and 3.1 percent from 5.4 percent and 2.9 percent, respectively. In addition, Fed Governor Christopher Waller (FOMC voter) said “we’ve still got a ways to go” before stopping interest rate hikes, according to Bloomberg.
Several factors that supported last week’s gains have experienced a reversal in price action today, including the bond and currency markets. The 10-yr note yield is up six basis points to 3.88% and the 2-yr note yield is up eight basis points to 4.40%. The U.S. Dollar Index is up 0.5% to 106.87.
Mega cap stocks are a drag on index performance today. The Vanguard Mega Cap Growth ETF (MGK) is down 0.4% while the S&P 500 and Invesco S&P 500 Equal Weight ETF (RSP) flirt with the unchanged mark. Amazon.com (AMZN) is a losing standout for the group after the NY Times reported the company plans to eliminate thousands of jobs.
The poor performance from Amazon, along with Tesla (TSLA) weighs on the S&P 500 consumer discretionary sector (-0.7%), which sits near the bottom of the pack for the 11 sectors. Other top laggards are real estate (-1.2%) and financials (-0.5%). Meanwhile, health care (+1.0%) and materials (+0.7%) hold the top spots.
Semiconductor stocks are one pocket of strength today. Advanced Micro Devices (AMD) is a winning standout for the group after receiving an upgrade to Outperform at Baird and an upgrade to Buy at UBS. The PHLX Semiconductor Index is up 0.5%.
