Closing Stock Market SummaryThe stock market started the day on a more upbeat note. For most of the session, though, index level price action was negative. There was a late afternoon bounce after the S&P 500 briefly slipped below the 4,100 level, leaving the major indices with only modest losses on a lightly traded day.
Mega cap stocks had been supporting the broader market for most of the week, yet money flows reversed somewhat today. The Vanguard Mega Cap Growth ETF (MGK) fell 0.3% while the Invesco S&P 500 Equal Weight ETF (RSP) closed flat and the market-cap weighted S&P 500 fell 0.2%.
There was not a lot of conviction on either side of the tape today. This followed news that the scheduled meeting between President Biden and congressional leaders to discuss the debt ceiling on Friday had been postponed until early next week as staff members continue to negotiate. Also, it followed a preliminary University of Michigan Consumer Sentiment Survey for May that featured a drop in sentiment and an increase in five-year ahead inflation expectations to 3.2% from 3.0%. That is the highest reading since 2011.
Market breadth showed somewhat mixed action under the index surface. Decliners had only a slim lead over advancers at both the NYSE and the Nasdaq.
S&P 500 sector performance was also mixed with many of the sectors closing near their flat lines. The consumer discretionary (-0.9%) sector was the worst performer due to losses in Amazon.com (AMZN 110.26, -1.92, -1.7%) and Tesla (TSLA 167.98, -4.10, -2.4%). Meanwhile, lingering growth concerns led to the relative outperformance of the defensive-oriented utilities (+0.4%) and consumer staples (+0.3%) sectors.
Regional bank stocks remained in focus today. The SPDR S&P Regional Banking ETF (KRE) had a rollercoaster day. It was up as much as 1.1% and down as much as 1.1%, but ended the session on an upswing with a 0.6% gain.
Treasury yields turned higher in response to five-year ahead inflation expectations rising. The 2-yr note yield, at 3.91% shortly before the release, settled up seven basis points to 3.98%. The 10-yr note yield, at 3.38% shortly before the release, settled the session up seven basis points to 3.46%.
- Nasdaq Composite: +17.4% YTD
- S&P 500: +7.4% YTD
- Dow Jones Industrial Average: +0.5% YTD
- S&P Midcap 400: +0.1% YTD
- Russell 2000: -1.2% YTD
Reviewing today's economic data:
- April Import Prices 0.4%; Prior was revised to -0.8% from -0.6%
- April Import Prices ex-oil 0.0%; Prior -0.5%
- April Export Prices 0.2%; Prior was revised to -0.6% from -0.3%
- April Export Prices ex-ag. 0.2%; Prior was revised to -0.5% from -0.2%
- The key takeaway from the report is that it follows suit with the April CPI and PPI reports from earlier in the week, which showed a moderation in inflation pressures on a year-over-year basis.
- May Univ. of Michigan Consumer Sentiment - Prelim 57.7 (consensus 62.9); Prior 63.5
- The key takeaway from the report is that consumer sentiment has weakened amid concerns about the economic outlook, which threatens to curtail discretionary spending activity that, in turn, would weigh on growth.
Looking ahead to Monday, market participants will receive the following economic data:
- 8:30 a.m. ET: Empire State Manufacturing for May (prior 10.8)
- 4:00 p.m. ET: Net Long-Term TIC Flows for March (prior $71.0 billion)