Stocks Jump After Fed Chairman Testifies
3:27 pm Thursday, June 23rd, 2022
Today’s session has included some misdirection in that the major indices started on an upbeat note, yet the trading action beneath the surface, and across the capital markets, has not validated a positive mindset about the growth outlook.
Nonetheless, a move into the mega-cap stocks proved to be a “market mover” early that belied an otherwise concerned mindset.
The mega-cap stocks continue to exhibit relative strength, but coming out of the New York lunch hour, their earlier strength has faded along with the opening gains for the broader market, which is now mixed on the heels of Fed Chair Powell appearing before the House Financial Services Committee for day two of his Semiannual Monetary Policy Report to Congress.
The market’s growth concerns have been unveiled in the following way:
Today’s weakest sectors are the cyclical energy (-4.7%), materials (-2.2%), financial (-1.8%), and industrials (-1.5%) sectors.
The mega-cap stocks, which are seen as having better earnings dependability in a slowdown, are outperforming. The Vanguard Mega-Cap Growth ETF (MGK) is up 0.4% while the Invesco S&P 500 Equal Weight ETF (RSP) is down 0.3%.
Travel-related stocks are among today’s more notable laggards.
The S&P 500 ran into resistance with a retest of the 3800 level mid-morning. It has been pulling back since then as market breadth has been deteriorating. The advance-decline line, which favored advancers earlier by a 2-to-1 margin at the NYSE and Nasdaq, now shows advancers with only a slight lead over decliners at the NYSE and a narrower 3-to-2 margin at the Nasdaq.
Initial claims for the week ending June 18 decreased by 2,000 to 229,000 (consensus 230,000) while continuing claims for the week ending June 11 increased by 5,000 to 1.315 million.
