Page One
Strength in the mega-cap stocks yesterday helped drive the Nasdaq 100 to a new record high. It also helped drive the S&P 500 higher, but it couldn't save the Dow Jones Industrial Average which suffered its eighth straight loss -- a streak unrivaled since 2018.
It isn't looking good at the moment for the Dow Jones Industrial Average to break its losing streak.
Currently, the S&P 500 futures are down 24 points and are trading 0.4% below fair value, the Nasdaq 100 futures are down 61 points and are trading 0.3% below fair value, and the Dow Jones Industrial Average futures are down 208 points and are trading 0.6% below fair value.
The weak disposition relates in part to rising Treasury yields. The 2-yr note yield is up three basis points to 4.27% and the 10-yr note yield, which hit 4.44% earlier, is up one basis point to 4.41%.
Yields came off their highs following the November Retail Sales report at 8:30 a.m. ET, which produced some headline surprises.
Total retail sales increased 0.7% month-over-month in November (Briefing.com consensus 0.5%) following an upwardly revised 0.5% (from 0.4%) in October. Excluding autos, retail sales were up a more modest 0.2% month-over-month (Briefing.com consensus 0.4%) following an upwardly revised 0.2% (from 0.1%) in October.
The key takeaway from the report is in the ex-auto number, which was up modestly and a reflection of some softening spending activity given that it is not adjusted for price changes. In other words, the overall sales increase, excluding autos, appears to be more price driven than volume driven.
There has been some whipsaw trading in the Treasury market in the wake of the report, which can't be categorized as wholly bad or good. It was an okay report with pockets of weakness in some areas (general merchandise store sales -0.1%; clothing clothing accessories -0.2%; food services and drinking places -0.4%) and strength in other areas (building material and garden equipment and supplies dealers sales +0.4%; nonstore retailer sales +1.8%; motor vehicle and parts dealers sales +2.6%).
Separately, the price action in NVIDIA (NVDA) of late has been wholly bad. It is down another 2.0% in pre-market trading, leaving it down 15.4% from its November 21 intraday high. That move clearly hasn't derailed the Nasdaq 100, which has been riding the strength in Tesla (TSLA), Alphabet (GOOG), Apple (AAPL), Broadcom (AVGO), Microsoft (MSFT), and Amazon.com (AMZN) to its record perch.
It will be knocked off that perch at today's open, though, as NVIDIA's ongoing struggles coupled with weakening breadth figures, rising Treasury yields, and valuation concerns are keeping buying efforts in check.
