Stock Market Update

[BRIEFING.COM] The stock market settled little changed from yesterday's close. There wasn't much carryover selling interest after the S&P 500 found support on an early test of its 50-day moving average (5,506). The index dropped below that level in the afternoon, but ultimately settled the day above the key, short-term support level. 

Market breadth reflected a lack of conviction on either side of the tape, contributing to the lackluster action at the index level along with choppy movement in some mega cap names. NVIDIA (NVDA 106.21, -1.79, -1.7%) shares were volatile today in response to a report, which the company then denied, that it received a DOJ subpoena.

The market was also digesting the JOLTS report, which showed that job openings fell to 7.673 mln from 7.910 mln in July, reaching their lowest level since early 2021. Tomorrow's calendar also features data on the labor market in the form of weekly jobless claims and the ADP Employment Change for August. 

This sent Treasury yields lower, which didn't stir selling in equities due to the notion that weakness in the labor market will drive the Fed to cat rates by 50 basis points this month. The fed funds futures market now sees a 45.0% probability of a 50 basis points rate cut at the September 17-18 FOMC meeting, up from 38.0% yesterday, according to the CME FedWatch Tool.

The 2-yr note yield declined 12 basis points to 3.77% and the 10-yr note yield also settled at 3.77%, down eight basis points from yesterday.

The rate-sensitive real estate (+0.3%) and utilities (+0.9%) sectors were winning standouts today. Meanwhile, energy (-1.4%) was the only sector down more than 0.5% after oil prices dropped below $70.00/bbl. WTI crude oil futures settled 1.8% lower at $69.13/bbl, reflecting lingering concerns about growth prospects impacting demand. 

• S&P 500: +15.7% YTD
• Nasdaq Composite: +13.8% YTD
• Dow Jones Industrial Average: +8.7% YTD
• S&P Midcap 400: +8.0% YTD
• Russell 2000: +5.8% YTD

Reviewing today's economic data:

• Weekly MBA Mortgage Applications Index 1.6%; Prior 0.5%
• July Trade Balance -$78.8 bln (Briefing.com consensus -$78.5 bln); Prior was revised to -$73.0 bln from -$73.1 bln
  • The key takeaway from the report is the uptick in imports. While that will act as a drag on Q3 GDP forecasts, the increase in imports will nonetheless be construed as a reassuring demand signal for the U.S. economy.
• July Factory Orders 5.0% (Briefing.com consensus 4.5%); Prior -3.3%
  • The key takeaway from the report is that business spending languished in July.
• July JOLTS - Job Openings 7.673 mln; Prior was revised to 7.910 mln from 8.184 mln

Thursday's economic lineup features:

• 8:15 ET: August ADP Employment Change (Briefing.com consensus 150,000; prior 122,000)
• 8:30 ET: Weekly Initial Claims (Briefing.com consensus 236,000; prior 231,000), Continuing Claims (prior 1.868 mln), revised Q2 Productivity (Briefing.com consensus 2.3%; prior 2.3%), and revised Q2 Unit Labor Costs (Briefing.com consensus 0.9%; prior 0.9%)
  9:45 ET: Final August S&P Global U.S. Services PMI (prior 55.0)
• 10:00 ET: August ISM Non-Manufacturing (Briefing.com consensus 51.0%; prior 51.4%)
• 10:30 ET: Weekly natural gas inventories (prior +35 bcf)
• 11:00 ET: Weekly crude oil inventories (prior -0.85 mln)