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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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The Week In Review

11/16-11/20/15

The stock market ended an upbeat week on a higher note with the bulk of today's action taking place during the opening hour. The S&P 500 gained 0.4%, ending the week higher by 3.3% while the Nasdaq Composite (+0.6%) outperformed, boosting its weekly gain to 3.6%.

 

Equity indices rocketed out of the gate, marking their best levels of the day about 45 minutes after the opening bell. The S&P 500 set a session high just above the 2,097 level and spent the remainder of the trading day in a slow retreat from that perch.

 

The consumer discretionary sector (+1.2%) displayed strength from the start while five other sectors also finished in the green. As for the discretionary space, the group extended its weekly gain to 4.5%, ending atop this week's leaderboard. Apparel names were largely responsible for the strength with Dow component Nike (NKE 132.65, +6.87) soaring 5.5% after announcing a new $12 billion share repurchase program and boosting its quarterly dividend by four cents to $0.32/share. In addition, the industry giant announced its stock will undergo a two-for-one split.

 

Staying in the discretionary sector, another apparel stock—Abercrombie & Fitch (ANF 24.37, +4.88)—soared 25.0% after beating earnings and revenue estimates while the broader SPDR S&P Retail ETF (XRT 44.16, +0.88) spiked 2.0%.

 

The strong showing from retailers overshadowed a 12.3% plunge in the shares of Chipotle Mexican Grill (CMG 536.19, -75.32), which unfolded after the Center for Disease Control published a report detailing new E. coli cases at CMG restaurants in six states.

 

Elsewhere among cyclical sectors, industrials (+0.6%) and technology (+0.9%) also settled ahead of the broader market while energy (-1.0%) and materials (-0.3%) could not stay out of the red. Interestingly, the energy sector finished at the bottom of the leaderboard even though crude oil overcame intraday weakness to end the pit session higher by 0.3% at $41.90/bbl.

 

Moving to the countercyclical side, consumer staples (-0.7%) and telecom services (-0.5%) retreated during the afternoon while utilities (+0.5%) and health care (+0.7%) settled in the green. The health care sector fared better than the biotech group as the iShares Nasdaq Biotechnology ETF (IBB 333.49, +0.07) settled flat.

 

Treasuries held modest gains through the bulk of the session but they dipped in the afternoon with the 10-yr yield ending higher by a basis point at 2.26%.

 

Today's participation was ahead of average with the final tally receiving a healthy boost thanks to options expiration. As a result, more than 950 million shares changed hands at the NYSE floor.

 

Investors did not receive any economic data today and Monday's economic news will be limited to the October Existing Home Sales report (Briefing.com consensus 5.50 million), which will be released at 10:00 ET.

 

Nasdaq Composite +7.8% YTD

S&P 500 +1.5% YTD

Dow Jones Industrial Average 0.0% YTD

Russell 2000 -2.4% YTD

Week in Review: Stocks March Higher

 

The stock market began the trading week with a broad-based rally, which unfolded after a range-bound start to the trading day. The S&P 500 gained 1.5% while the Nasdaq Composite (+1.2%) underperformed throughout the session. Overnight, it was reported that the Japanese economy has re-entered recession for the second time in as many years as Q3 GDP contracted 0.2% quarter-over-quarter (expected -0.1%; last -0.3%), according to the preliminary reading. Naturally, that news was met with hopes for more monetary support from the Bank of Japan, which boosted global equities while the yen retreated, sending the dollar/yen pair higher by 0.5% to 123.20. That being said, Japan's Nikkei could not stay in the green, falling 1.0%. Once the focus turned to the U.S., stocks began the day with slim losses, but the opening weakness was erased promptly. The S&P 500 spent the first two hours of the day just above its flat line, but the index extended its gain during the afternoon with the energy sector (+3.3%) setting the pace.

 

Equity indices finished Tuesday on a flat note after enjoying an opening rally that briefly placed the S&P 500 (-0.1%) above its 200-day moving average (2,064). The benchmark index was up around 0.7% during late morning action, but steady afternoon selling ensured a lower finish. The second-half retreat accelerated after police officials in Hanover, Germany confirmed that a credible bomb threat forced the cancellation of a soccer match between Germany and the Netherlands. Press reports suggested that an emergency vehicle loaded with explosives was found at the soccer stadium, but this was refuted by the German Interior Minister just before the market closed for the day. Six sectors ended the day with losses while health care (+0.4%) ended in the lead thanks to daylong strength in biotechnology.

 

The market ended the midweek session on a broadly higher note with the Nasdaq Composite leading the way. The tech-heavy Index spiked 1.8% while the S&P 500 (+1.6%) followed not far behind, charging back above its 200-day moving average (2,065). Equity indices climbed out of the gate, continuing their steady charge into the afternoon and through the release of FOMC minutes from the October meeting, which left little doubt that the Fed is poised to raise rates at the December meeting. Specifically, the minutes indicated that "it may well become appropriate to initialize the normalization process at the next meeting, provided that unanticipated shocks do not adversely affect the economic outlook." To be fair, it would be hard to categorize the statement as hawkish if one were to judge solely based on the market's reaction to the commentary as Treasuries charged back to unchanged (10-yr yield 2.27%) while the dollar ticked lower against the euro.

 

Thursday ended on a flat note after the market spun its wheels throughout the day. The S&P 500 shed 0.1% after spending the day in an eight-point range while the Nasdaq Composite (unch) outperformed slightly. Equities began the trading day just below their flat lines due to daylong weakness in two relatively large sectors. To that point, health care (-1.6%) and energy (-1.3%) struggled from the start with the health care space responding to a 5.7% dive in the shares of UnitedHealth (UNH 110.57, -6.68) after the insurer lowered its guidance, citing exposure to public exchanges. To be fair, UNH was not the only soft spot as biotech names also lagged with iShares Nasdaq Biotechnology ETF (IBB 333.42, -5.32) ending lower by 1.6%. For its part, the energy sector lagged throughout the day, ending well behind the broader market despite an afternoon rebound in crude oil, which narrowed its loss to 0.5%, ending the pit session at $40.54/bbl.