Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.2%) and Nasdaq Composite (+0.6%) trade higher after recent declines. Some buy-the-dip interest has contributed to the upside bias, along with a big increase in shares of Tesla (TSLA 256.24, +42.55, +2.0%) after impressive Q3 earnings and 2025 vehicle growth estimate. The S&P 500 and Nasdaq Composite are still lower by 1.0% and 0.6%, respectively, since last Friday. 

Treasury yields are lower after rising so far this week, which has acted as support for equities. The 10-yr yield is down four basis points to 4.20% and the 2-yr yield is down four basis points to 4.05%.

The Dow Jones Industrial Average (-0.4%) has underperformed major indices due to losses in IBM (IBM 216.92, -15.83, -6.8%), Honeywell (HON 210.33, -10.01, -4.6%), and Boeing (BA 154.40, -2.66, -1.7%). IBM and Honeywell reported earnings results and Boeing trades down on news that workers voted 64% against accepting the latest contract proposal put forth by their employer.

Other names that received negative responses to earnings results include Union Pacific (UNP 228.23, -1312, -5.4%), United Rentals (URI 819.56, -14.61, -1.8%), and Harley Davidson (HOG 32.79, -1.33, -3.9%). Whirlpool (WHR 113.03, +13.78, +13.9%), Mattel (MAT 18.53, +0.75, +4.3%), Lam Research (LRCX 75.44, +2.58, +3.6%), and ServiceNow (NOW 958.40, +50.72, +5.6%) are some of the names showing gains in response to quarterly results. 

The S&P 500 consumer discretionary sector is the top performer among the 11 sectors by wide margin, up 3.2% thanks to Tesla. Amazon.com (AMZN 186.95, +2.24, +1.2%) is also higher. The materials sector shows the largest decline, down 1.4%.

Reviewing today's economic data: 

• Weekly Initial Claims 227K (Briefing.com consensus 246K); Prior was revised to 242K from 241K, Weekly Continuing Claims 1.897 mln; Prior was revised to 1.869 mln from 1.867 mln
  • The key takeaway from the report is that, while it might still contain some noise from the effects of the hurricanes, the initial claims data from both a seasonally adjusted and unadjusted basis connote a labor market that is still operating on solid ground that is a long way from recession-like territory.
• October S&P Global US Manufacturing PMI - Prelim 47.8; Prior 47.3
• October S&P Global US Services PMI - Prelim 55.3; Prior 55.2
• September New Home Sales 738K (Briefing.com consensus 713K); Prior was revised to 709K from 716K
  • The key takeaway from the report is that new home sales, which are tabulated when contracts are signed, likely enjoyed a tailwind from the drop in mortgage rates seen in September ahead of the FOMC decision, but with rates higher now than they were before the September 18 rate cut, it is reasonable to think October new home sales won't look as good.