Stock Market Update

[BRIEFING.COM] Things are looking okay at the index level, which is a standing that can be attributed to the outperformance of the mega-cap stocks. The Vanguard Mega-Cap Growth ETF (MGK) is up 1.6%.

Market internals paint a different view of things with decliners leading advancers by a comfortable margin at the NYSE and Nasdaq. Hence, "the market" is looking okay, yet the broader market is struggling a bit today. The Russell 2000 is down 0.6%, the S&P Midcap 400 Index is down 0.3%, and the equal-weighted S&P 500 is down 0.1%.

The lackluster showing, though, follows a nice period of outperformance to begin the year that was helped by encouraging inflation data, falling bond yields, a resilient labor market, and optimism about the Trump administration pursuing deregulation and lower tax rates.

In other words, today has the semblance of a consolidation trade for the broader market, which is garnering some needed support from Netflix (NFLX 967.24, +97.56, +11.2%), which is soaring after its earnings report, and the likes of Procter & Gamble (PG 166.09, +4.37, +2.7%) and Travelers (TRV 248.50, +9.34, +3.9%) following their earnings results.

Market participants continue to be heartened as well by some better-than-feared tariff proposals. To that end, President Trump said he is thinking about a 10% tariff on China starting February 1 because it is sending fentanyl to Canada and Mexico.

The Treasury market has been calmer of late amid the tariff talk. The 10-yr note yield is up two basis points today to 4.59% but down from a peak of 4.80% seen early last week.