Closing Stock Market SummaryThe stock market had another weak showing today, building on recent losses. It looked poised to stage a rebound midmorning with the Nasdaq up more than 1.0% at its high. Upside momentum quickly faded and the stock market sank, bringing the S&P 500 slightly below Friday's low (3,644). The selling impulse weakened at that point and stocks managed to bounce a bit, but the S&P 500 did log a fresh closing low for the year (3,655).
Price action in the stock market today was driven by price action in the Treasury market, which itself was driven by huge swings in the foreign exchange market. The British pound tumbled to an all-time low against the dollar (1.0349) before staging a sharp recovery to 1.0933 amid a growing belief that the Bank of England (BoE) would step-in with an emergency rate hike to support the currency.
An update from the Bank of England today indicated that a "full assessment" of matters will occur at its next scheduled meeting (November 3). So, there was no intervention today and market participants have been led to believe that there won't be any supportive rate hike action until November.
That recognition fueled renewed selling interest of the pound and Treasuries. The US Dollar Index was up 0.8% to 114.05 with GBP/USD -1.5% to 1.0692.
The 2-yr note yield, at 4.20% shortly before the BoE update, settled at 4.31%. The 10-yr note yield, at 3.75% shortly before the BoE update, settled at 3.88%.
Relative strength from mega cap stocks helped limit index level losses. The Vanguard Mega Cap Growth ETF (MGK) closed with a 0.5% loss versus a 1.5% loss in the Invesco S&P 500 Equal Weight ETF (RSP). The S&P 500 closed down 1.0%.
Ten of the 11 S&P 500 sectors closed in the red with losses ranging from 0.2% (consumer discretionary) to 2.6% (real estate). The lone holdout in the green, consumer staples (+0.01%), barely squeezed a gain. Decliners led advancers by a 5-to-1 margin at the NYSE and a better than 2-to-1 margin at the Nasdaq.
Casino stocks were one bright spot in the market today following reports China will allow Macau tour groups for the first time in three years. Melco Resorts (MLCO 6.85, +1.35, +25.5%), Las Vegas Sands (LVS 39.66, +4.19, +11.8%), and Wynn Resorts (WYNN 66.80, +7.15, +12.0%) were winning standouts for the group.
Energy complex futures settled mixed. WTI crude oil futures fell 2.7% to $76.63/bbl. Natural gas futures rose 0.3% to $7.01/mmbtu. Unleaded gasoline futures fell 1.0% to $2.28/gal.
There was no U.S. economic data of note today.
Looking ahead to Tuesday, market participants will receive the following economic data:
- August Durable Orders (consensus -0.1%; prior 0.0.%) and Durable Orders, Excluding Transportation ( consensus 0.3%; prior 0.3%) at 8:30 a.m. ET
- July FHFA Housing Price Index (prior 0.1%) and July S&P Case-Shiller Home Price Index (Briefing.com consensus 17.0%; prior 18.6%) at 9:00 a.m. ET
- September Consumer Confidence ( consensus 105.0; prior 103.2) and August New Home Sales ( consensus 500,000; prior 511,000) at 10:00 a.m. ET
Dow Jones Industrial Average: -19.5% YTD
S&P Midcap 400: -22.4% YTD
S&P 500: -23.3% YTD
Russell 2000: -26.3% YTD
Nasdaq Composite: -31.0% YTD