Stocks Pull Back as Banks Issue Quarterly Updates
2:57 pm Monday, July 18th, 2022
U.S. stocks lost steam Monday as investors considered another set of earnings reports from major companies and looked ahead to a week of key central-bank meetings.
There were a few factors in play fueling the risk-on sentiment in the early going:
Better-than-expected Q2 earnings results from Goldman Sachs (GS), Encouraging new order activity for Boeing (BA), Rise in oil prices with WTI crude oil futures up 4.0% to $101.46/bbl, Strength in semiconductors, which carry a leading indicator status
There were also reports suggesting market participants were somewhat relieved to think that the Federal Reserve will raise the target range for the fed funds rate at next week’s FOMC meeting by “only” 75 basis points instead of a feared 100 basis points.
The S&P 500 sectors currently reflect more of a risk-on trade, although many sectors have faded from earlier levels. The countercyclical sectors–utilities (-0.9%), health care (-1.0%), and consumer staples (flat)–are among the worst performers thus far. The top performing sectors are energy (+2.5%), consumer discretionary (+2.2%), materials (+1.2%), and information technology (+0.9%).
Market breadth has narrowed from earlier, reflecting some loss of the buying momentum seen at today’s open. Earlier, advancers led decliners by a 4-to-1 margin at the NYSE and a 3-to-1 margin at the Nasdaq. Now, advancers lead decliners by a 3-to-1 margin at the NYSE and an 11-to-5 margin at the Nasdaq.
The 2-yr note yield is up three basis points to 3.16% while the 10-yr note yield is up six basis points to 2.99%.
Reviewing today’s economic data:
July NAHB Housing Market Index 55 (Briefing.com consensus 66); Prior 67
