Stock Market Update

[BRIEFING.COM] The stock market has another fight on its hands today as it grapples with growth concerns and disappointing price action. The former revved up on today's release of the February Consumer Confidence Index, which saw its sharpest monthly decline (from 105.3 to 98.3) since August 21, while the latter registered early in the performance of the mega-cap stocks.

The Vanguard Mega-Cap Growth ETF (MGK 340.90, -3.35, -1.0%), which we'll use as a proxy for the performance of the mega-cap cohort, had been down as much as 2.1%, but it has cut that loss by more than half. That comeback effort has helped the stock market pare its early losses that took the S&P 500 to 5,908 at today's low.

Net-net, however, the mega-cap stocks, like Tesla (TSLA 304.14, -26.39, -8.0%), are still a drag on the major indices.

Dow component Home Depot (HD 399.58, +17.16, +4.5%) has been a winning standout that has provided some offsetting support. The home improvement retailer surpassed Q4 earnings expectations, but issued disappointing full-year guidance. Eli Lilly (LLY 901.65, +20.24, +2.3%), which announced additional Zepbound vial doses at a lower cost, has also been a supportive influence.

Conversely, UnitedHealth Group (UNH 456.55, -4.96, -1.1%) is struggling today under the weight of a Wall Street Journal report that Senator Grassley (R-IA), Chair of the Senate Judiciary Committee, has sent a letter to the company inquiring about its Medicare billing practices.

There has been a mostly defensive orientation in today's trade. The counter-cyclical consumer staples sector (+1.6%) and health care sectors (+0.3%) have been relative strength leaders, but to be fair the cyclical materials (+0.7%) and industrials (+0.3%) sectors have also been standouts. Other signs of defensive positioning include an uptick in the CBOE Volatility Index (19.56, +0.58, +3.1%) and the gains in the Treasury market.

The 2-yr note yield is down eight basis points to 4.09% and the 10-yr note yield is down nine basis points to 4.30%. Worries about tariff actions and tension on the line between the U.S. and China, with the Trump administration reportedly looking at tightening restrictions on chip exports to China, has added to some of the safe-haven interest in Treasuries.

The Philadelphia Semiconductor Index, down 2.4% earlier, is currently down 1.5%.

Reviewing today's economic data:

• The Conference Board's Consumer Confidence Index dropped to 98.3 in February (Briefing.com consensus 103.1) from an upwardly revised 105.3 (from 104.1) in January. This was the largest monthly decline since August 2021.
  • The key takeaway from the report is that the drop in confidence was seen across all age groups with worries about tariffs, inflation, and future employment prospects driving the decline.
• December FHFA Housing Price Index (actual 0.4%; prior revised to 0.4% from 0.3%)
• December S&P Case-Shiller Home Price Index (actual 4.5%; Briefing.com consensus 4.4%; prior 4.3%)