Stock Market Update

[BRIEFING.COM] The stock market's trend of upwards momentum continued through today's trade, culminating in new record intraday and closing highs for the S&P 500 (+0.4%) and Nasdaq Composite (+0.4%). 

A lack of major catalysts saw the indices face resistance at yesterday's record high levels, but prevailing optimism around earnings reports and trade developments saw the S&P 500 and Nasdaq push to new records just before 12:30 ET.

The S&P 500 reached 6,395.82 today and finished at 6,388.64. 

The Nasdaq Composite reached 21,159.80 and settled at 21,108.32.

The Wall Street Journal reported that the Trump administration will hold trade talks with China next week, while Reuters reported that the U.S. and EU could reach the foundation of a trade deal by this weekend. The market viewed these headlines optimistically, with this week's announcement of a trade deal with Japan providing confidence that better trade deals with key partners can be negotiated before the August 1 deadline. 

On the earnings front, today's reports (while not as consequential as yesterday's) were generally positive, strengthening the notion that there is even further upside if next week's mega-cap earnings reports beat expectations.

The consumer discretionary sector (+0.8%) finished as one of the best performers of the day, with Deckers Outdoor (DECK 116.92, +11.98, +11.4%) finishing as the top gainer in the S&P 500 after the company beat EPS expectations by $0.25.

The sector also benefitted from Tesla (TSLA 316.04, +10.74, +3.5%) rallying from an 8.2% loss yesterday after the company reported earnings in line and issued cautious guidance about the next several quarters. 

The materials (+1.2%), industrials (+1.0%), financials (+0.7%), and health care (+0.5%) sectors round out the top five performers of a day that saw nine sectors finish in positive territory, with only the energy (-0.4%) and communication services (-0.2%) sectors closing with a loss.

Today's broad-based gains were widened throughout the duration of the session. Some early gains among mega-cap names initiated the advances in the major averages, but breadth figures were decidedly negative until the afternoon. 

Advancers ultimately outpaced decliners by an 8-to-5 ratio on the NYSE, while advancers narrowly surpassed decliners on the Nasdaq. 

The improvement in breadth figures benefitted smaller stocks, with the Russell 2000 finishing with a gain of 0.4% after spending most of the morning in negative territory. Mid-cap stocks advanced even further, with the S&P Mid Cap 400 finishing with a gain of 0.9%.

Overall, risk appetite remained strong, with broad participation across market caps and sectors, helping the S&P 500 and Nasdaq extend their record-setting streaks.

U.S. Treasuries finished the week on a subdued note, with 10s and 30s padding this week's modest gains, while the 2-yr note finished flat, ending the week with a modest loss.

The entire complex spent afternoon trade near session highs, with the 30-yr yield finishing just above its 50-day moving average (4.925%) while the 10-yr yield fell below the 50-day moving average of its own (4.408%), settling not far above its 200-day moving average (4.371%).

The 10-yr note yield settled down two basis points to 4.39%.

• Nasdaq Composite: +9.3% YTD
• S&P 500: +8.6% YTD
• DJIA: +5.5% YTD
• S&P 400: +3.1% YTD
• Russell 2000: +1.4% YTD

Reviewing today's data:

• Durable goods orders were down 9.3% month-over-month in June (Briefing.com consensus -11.0%) after an upwardly revised 16.5% jump in May (from 16.4%). Excluding transportation, durable goods orders were up 0.2% month-over-month (Briefing.com consensus -0.2%) after rising a revised 0.6% (from 0.5%) in May.
  • The key takeaway from the report is that the sharp headline decrease was largely due to a drop in transportation equipment orders after a big jump in May, though nondefense capital goods orders, excluding aircraft—a proxy for business spending—fell 0.7% after increasing 2.0% in May, reflecting a moderation after a solid rise