Stock Market Update

[BRIEFING.COM] The stock market has traded higher thus far on the final session of this upbeat week. The S&P 500 (+0.6%), Nasdaq Composite (+0.6%), and Dow Jones Industrial Average (+0.7%) trade just below session highs while the Russell 2000 continues to outperform, trading up 2.4%. 

The upside bias is driven by ongoing momentum. Advancers lead decliners by a better than 6-to-1 margin at the NYSE and by a 7-to-2 margin at the Nasdaq. 

Mixed action in some mega cap names has limited index performance somewhat, and the loss in shares of Boeing (BA 155.99, -6.89, -4.2%) has clipped the DJIA slightly. The negative price action follows news that its machinists union voted by 96% in favor of striking, which prompted warnings about a downgrade risk from Fitch ratings and Moody's ratings.

Still, many stocks are benefitting from broad buying activity. 27 of the 30 Dow components trade higher and all 11 S&P 500 sectors are higher. The materials (+1.2%) and utilities (+1.1%) sectors are the top performers while the financial sector shows the slimmest gain, up 0.3%.

Market participants have also repriced the likelihood of a 50 basis points rate cut at next week's FOMC meeting. The fed funds futures market now sees a 55.0% probability of a 25 basis points cut, down from 72.0% yesterday, according to the CME FedWatch Tool. 

The 10-yr yield is down three basis points to 3.65% and the 2-yr yield, which is most sensitive to changes in the fed funds rate, is down seven basis points to 3.58%.

Reviewing today's economic data:

• August Export Prices -0.7%; Prior was revised to 0.5% from 0.7%
• August Export Prices ex-ag. -0.6%; Prior was revised to 0.8% from 1.0%
• August Import Prices -0.3%; Prior 0.1%
• August Import Prices ex-oil -0.1%; Prior 0.1%
• September Univ. of Michigan Consumer Sentiment - Prelim 69.0 (Briefing.com consensus 68.1); Prior 67.9
  • The key takeaway from the report is that year-ahead expectations for personal finances and the economy both improved despite substantial uncertainty surrounding the election.