Stock Market Update

[BRIEFING.COM] The stock market is in rally-mode. It is the last session in the Santa Claus Rally period (last five trading sessions of the year and first two of the new year), which usually has a positive skew. The S&P 500 need to move about 45 points higher, though, to claim a positive Santa Claus rally this year. The index is also about 15 points below its 50-day moving average (5,944). 

Still, a 1.1% gain is a positive development in the S&P 500. Many stocks are participating in today's broad advance. The equal-weighted S&P 500 shows a 0.7% gain and all 11 S&P 500 sectors are higher. The consumer discretionary (+1.5%) and information technology (+1.3%) sectors lead the pack. 

Strength in the mega cap space has an outsized impact on index performance. NVIDIA (NVDA 144.64, +6.33, +4.6%), Microsoft (MSFT 421.96, +3.38, +0.8%), Amazon.com (AMZN 223.56, +3.32, +1.5%), and other mega caps are higher. Apple (AAPL 242.50, -1.32, -0.6%) is an exception, extending declines related to iPhone discounts and sliding demand in China.

Shares of US Steel (X 30.76, -1.84, -5.6%) have also gone against the upside grain, trading down again today after the White House confirmed that President Biden will block the Nippon Steel takeover. Nippon Steel Corporation and US Steel released a statement condemning the U.S. Government’s decision to block proposed acquisition of U. S. Steel, calling it unlawful.

The stock market has maintained a positive skew despite rising market rates. The 10-yr yield was at 4.54% earlier and sits at 4.57%. The 2-yr yield was at 4.23% earlier and sits at 4.25%.

Reviewing today's economic data:

• The December ISM Manufacturing Index checked in at 49.3% (Briefing.com consensus 48.5%) versus 48.4% in November. The dividing line between expansion and contraction is 50.0%, so the December reading suggests manufacturing sector activity contracted versus the prior month but at a slower pace. This was the ninth straight month (and 25th out of 26) that economic activity in the manufacturing sector contracted.
  • The key takeaway from the report is that manufacturing sector activity overall continued in a state of contraction, although the pace of contraction slowed at the same time the prices index picked up.
• EIA Natural Gas Inventories -116 bcf (prior -93 bcf)