Stock Market Update

[BRIEFING.COM] The stock market is experiencing a choppy session at the index level. The S&P 500 (+0.2%), Dow Jones Industrial Average (+0.5%), and Nasdaq Composite (-0.4%) have shown turbulent price action within fairly tight ranges due in part to selling in the mega cap space. 

The bias under the index surface has been positive through the session, though.  Advancers have a 7-to-2 lead over decliners at the NYSE and a 2-to-1 lead at the Nasdaq. The equal-weighted S&P 500 trades 1.1% higher, reflecting ongoing buy-the-dip trading after the S&P 500 entered correction territory last week. 

The stock market is largely overlooking this morning's economic data. U.S. retail sales and retail sales, excluding autos, were weaker than expected in February, yet control group sales (excluding auto, gasoline station, building materials, and food services sales) were up a solid 1.0%. The New York Fed's Empire Manufacturing Survey for March showed a contraction in business activity and a pickup in prices paid and prices received.

Unlike stocks, the Treasury market is not looking past the aforementioned reports. The 10-yr yield is down three basis points to 4.28% on persistent concerns about growth. 

The price action in Treasuries also reflects some geopolitical worries after President Trump warned Iran after Houthi attacks on US vessels that any further attacks by Houthi rebels will be looked upon as "a shot fired from the weapons and leadership of Iran."

Reviewing today's economic data:

• Retail sales increased 0.2% month-over-month in February (Briefing.com consensus 0.7%) following a downwardly revised 1.2% decline (from -0.9%) in January. Excluding autos, retail sales were up 0.3% month-over-month (Briefing.com consensus 0.4%) following a 0.6% decline (from -0.4%) in January.
  • The key takeaway from the report is that control group retail sales, which exclude auto, gasoline station, building materials, and food services sales, jumped 1.0% month-over-month following a downwardly revised 1.0% decline (from -0.8%) in January.
• The New York Fed's Empire Manufacturing Survey for March showed the General Business Conditions Index declining to -20.0 in March from 5.7 in February. A number below 0.0 denotes a contraction in business activity in the New York Fed region. The Prices Paid Index rose five points to 44.9, its highest level in more than two years, while the Prices Received Index jumped three points to 22.4, hitting its highest level since May 2023.
  • The key takeaway from the report is that it plays into some of the stagflation worries that have infiltrated the market.
• January Business Inventories increased 0.3%, as expected, following a 0.2% decline in December.
• The March NAHB Housing Market Index dropped to 39 (Briefing.com consensus 43) from 42 in February.