Stock Market Update

[BRIEFING.COM] The stock market opened to modest gains this morning, though a lack of developments has kept the advances limited as the market anticipates the FOMC decision at 14:00 ET.

A wait-and-see disposition is reflected in today's action that comes on lower than average volume and increasingly tight breadth figures. Advancers outpace decliners by a few dozen names on the NYSE and a 7-to-6 ratio on the Nasdaq.

Sector strength is also almost evenly split, with the utilities (+1.1%), communication services (+0.6%), information technology (+0.4%), financials (+0.3%), and health care (+0.3%) sectors comprising the five S&P 500 sectors that have spent the majority of the session in positive territory.

Meanwhile, the energy (-0.8%), materials (-0.6%), consumer staples (-0.4%), consumer discretionary (-0.3%), real estate (-0.3%), and industrials (-0.1%) sectors sport losses at midday.

The market received a solid advance reading of Q2 GDP this morning (3.0%; Briefing.com consensus 2.5%), which President Trump already highlighted in a social media post. He also repeated his call for a rate cut from the Fed, though the strong GDP reading gives the central bank more room to delay the next cut.

Today's data slate also included a stronger-than-expected ADP Employment Change report for July (104,000; Briefing.com consensus 78,000; prior -23,000), which precedes Friday's release of the official July Employment Situation report from the BLS (Briefing.com consensus 102,000; prior 147,000).

While the batch of earnings reports before today's open has done little to sway the market as a whole, there are still some individual moves of note. Teradyne (TER 109.03, +18.48, +20.41%), Humana (HUM 252.06, +19.44, +8.36%), and Electronic Arts (EA 158.35, +10.56, +7.15%) all move higher following earnings.

Meanwhile, Old Dominion (ODFL 148.18, -13.94, -8.60%), Mondelez Int'l (MDLZ 65.69, -4.02, -5.77%), and HSBC Holdings (HSBC 61.88, -3.18, -4.90%) face pressure after their earnings.

This afternoon will see the earnings release of Meta Platforms (META 701.38, +1.38, +0.20%) and Microsoft (MSFT 512.82, +0.24, +0.05%), with the tech giants likely to make earnings a more substantial catalyst to this week's action.

Treasuries trade on their lows in response to solid Q2 growth, with the 10-year yield rising four basis points to 4.37%.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -3.8%; Prior 0.8%
• July ADP Employment Change 104K (Briefing.com consensus 78K); Prior was revised to -23K from -33K
  • The key takeaway is that, while the overall employment growth was modest, it was broad-based with gains for small, medium, and large establishments. In brief, it was not a report that signals any material weakness in the labor market.
• Q2 GDP-Adv. 3.0% (Briefing.com consensus 2.5%); Prior -0.5%, Q2 GDP Deflator-Adv. 2.0% (Briefing.com consensus 2.6%); Prior 3.8%
  • The key takeaway from the report is the recognition that the stronger growth was fueled by the decrease in imports (-30.3%), which are a subtraction in the calculation of GDP. The net exports component contributed 4.99 percentage points to Q2 GDP growth.
• June Pending Home Sales -0.8% (Briefing.com consensus 0.4%); Prior 1.8%