Stock Market Update

[BRIEFING.COM] For the most part, the stock market was in a restful state in today's trade until a late rally effort finished off a very good third quarter.

Losses were relatively modest during the session, even at the lows for the day that occurred around 2:30 p.m. ET after Fed Chair Powell told listeners at an NABE Conference that, if the economy evolves as expected, that would mean two more cuts this year of 25 basis points each. The fed funds futures market had been expecting a total of 75 basis points worth of cuts before the end of the year. That created some knee-jerk selling interest that had the S&P 500 down as much as 0.6% for the day.

The Treasury market reacted with yields backing up. The 2-yr note yield rose nine basis points to 3.65% while the 10-yr note yield jumped five basis points to 3.80%.

The market bounced back just as quickly, however, heartened by the understanding that the Fed will still be cutting rates, and that it will move in a more aggressive manner if necessary. It was the so-called "Fed put" trade that co-mingled with the patented buy-the-dip trade that has proven successful all year.

Fittingly, the S&P 500 hit session highs shortly before the close, finishing the third quarter on an upbeat note. 

It was not nearly as upbeat as the 8.1% gain logged by China's Shanghai Composite, which flowed from reports the People's Bank of China told commercial banks to lower mortgage rates in batches, but it was still an impressive move that capped off a quarter that saw the market-cap weighted S&P 500 gain 5.5% and the equal-weighted S&P 500 gain 9.1%.

In terms of sector performance, it was dotted with mostly red figures throughout the day, but everything flipped late. Nine of the 11 S&P 500 sectors finished in positive territory with gains ranging from 0.1% to 0.8%. The two holdouts were the materials sector (-0.6%) and the consumer discretionary sector (-0.3%), the latter of which was impeded primarily by a loss in Amazon.com (AMZN 186.33, -1.64, -0.9%).

Elsewhere, the communication services sector (+0.8%) got some extra help from Alphabet (GOOG 167.19, +1.90, +1.2%) and Meta Platforms (META 572.44, +5.08, 0.9%) while digesting a batch of industry-related M&A news. 

DIRECTV will acquire EchoStar's video distribution business, including DISH TV and Sling TV, in exchange for a nominal consideration of $1 plus the assumption of DISH DBS net debt, AT&T (T 21.99, +0.09, +0.4%) is selling its remaining stake in DIRECTV to TPG for $7.6 billion in cash payments received from DIRECTV and TPG through 2029, and Verizon (VZ 44.92, +0.03, +0.1%) entering into a definitive agreement for Vertical Bridge to obtain the exclusive rights to lease, operate and manage 6,339 wireless communications towers across all 50 states and Washington, D.C. from subsidiaries of Verizon for approximately $3.3 billion.

The energy sector (+0.8%) joined the communication services sector at the top of the leaderboard, taking stock of a Washington Post report that said Israel has told the U.S. it is planning an imminent and limited ground operation in Lebanon.

• Nasdaq Composite: +21.2% YTD (+2.6% for Q3)
• S&P 500: +20.8% YTD (+5.5% for Q3)
• Dow Jones Industrial Average: +12.3% YTD (+8.2% for Q3)
• S&P Midcap 400: +12.2% YTD (+6.6% for Q3)
• Russell 2000: +10.0% YTD (+8.9% for Q3)

Reviewing today's economic data:

• The September Chicago PMI checked in at 46.6 (Briefing.com consensus 46.2) versus 46.1 in August.
  • The dividing line between expansion and contraction is 50.0, so the September reading implies that manufacturing activity in the Chicago Fed region contracted in September but at a slower pace than August.

Looking ahead, Tuesday's economic calendar features:

• 09:45 ET: September Final S&P Global US Manufacturing PMI (prior 47.9
• 10:00 ET: September ISM Manufacturing PMI (Briefing.com consensus 47.7%; prior 47.2%)
• 10:00 ET: August JOLTS - Job Openings (prior 7.673M)
• 10:00 ET: August Construction Spending (Briefing.com consensus 0.1%; prior -0.3%)