Stock Market Update

[BRIEFING.COM] There hasn't been a lot of riveting price action at the index level today as the stock market has stopped to catch its breath after a furious run over the last eight sessions, which saw the S&P 500 and Nasdaq Composite increase 6.0% and 6.5% respectively, from their January 13 lows.

Outsized moves today have come at the individual stock level. For instance, Twilio (TWLO 138.35, +24.95, +22.1%) is soaring after impressing investors with guidance at its Investor Day, and Novo-Nordisk (NVO 88.01, +6.91, +8.5%) is up after sharing promising early-stage trial results for its weight-loss drug.

Buyers have lacked conviction but, importantly, so have sellers, which have also been more attuned to individual story stocks as opposed to index moves. Texas Instruments (TXN 186.46, -14.15, -7.1%) is finding that out after it provided disappointing guidance that is weighing on the semiconductor space.

Dow component American Express (AXP 318.25, -7.62, -2.3%) is sliding after its earnings report, which was overshadowed somewhat by FY25 guidance that was "only" in-line with expectations. Fellow Dow component Boeing (BA 176.79, -1.71, -1.0%) shared a disappointing Q4 revenue outlook, yet the fallout from that disappointment has been relatively modest.

The latter is an apt to descriptor for many moves today. Sector changes are relatively modest and index changes are relatively modest.

The utilities (+0.9%) and communication services (+1.0%) sectors sit atop the performance table. Meta Platforms (META 649.24, +12.79, +2.0%) has underpinned the communication services sector following its announcement of a $60-65 billion capex plan for 2025 that will focus on AI initiatives. The energy (-0.8%) and information technology (-0.9%) sectors are bringing up the rear.

The lack of major movement at the index level also reflects a measure of hesitation in front of next week, which will feature earnings reports from several mega-cap companies, the FOMC meeting, the Advance Q4 GDP Report, the PCE Price Index -- the Fed's preferred inflation gauge -- for December, and presumably more policy chatter out of Washington.

Separately, the 10-yr note yield has dipped three basis points to 4.61% following this morning's batch of economic data, which included a notable deceleration in the January S&P Global US Services PMI. The U.S. Dollar Index, meanwhile, is down 0.7% to 107.27 with the greenback losing ground against the euro (EUR/USD +0.9% to 1.0511), British pound (GBP/USD +1.1% to 1.2492), and Japanese yen (USD/JPY -0.2% to 155.71).

The yen for its part garnered support after the Bank of Japan raised its key policy rate by 25 basis points to 0.50% and communicated a bias to raise again if the outlook evolves as it expects.

Reviewing today's economic data:

• The preliminary January S&P Global US Manufacturing checked in at 50.1 (an expansion reading) versus the final reading of 49.4 for December. The preliminary January S&P Global US Services PMI decelerated to 52.8 from 56.8 in December.
• The final University of Michigan Index of Consumer Sentiment for January slipped to 71.1 (Briefing.com consensus 73.0) from the preliminary reading of 73.2. The final reading for December was 74.0. In the same period a year ago, the index stood at 79.0.
  • The key takeaway from the report is that sentiment weakened as concerns about unemployment and inflation picked up.
• Existing home sales increased 2.2% month-over-month in December to a seasonally adjusted annual rate of 4.24 million (Briefing.com consensus 4.21 million) from an unrevised 4.15 million in November. Sales were up 9.3% from the same period a year ago, which was the largest increase since June 2021. On an annual basis, existing home sales in 2024 (4.06 million) dropped to their lowest level in nearly 30 years at the same time the median sales price reached a record high.
  • The key takeaway from the report is that home sales picked up in December despite higher mortgage rates, marking the third straight month of year-over-year gains with more inventory on the market than the same period a year ago.