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— Thinner holiday trading conditions
— Reacting to conflicting economic data, including the better than expected University of Michigan Consumer Sentiment final reading for December and a November Personal Income and Spending Report that showed no growth in real spending and PCE and core-PCE inflation rates that are still too high
— Mega cap stocks driving index level price action
— S&P 500 found support at 3,800
— Rising Treasury yields
Dow Jones Industrial Average (+0.38%) is the best-performing major average to this point on Friday afternoon.
A look inside the DJIA shows that Chevron (CVX 177.22, +5.14, +2.99%), Travelers (TRV 189.67, +2.47, +1.32%), and American Express (AXP 146.65, +1.34, +0.92%) are among today’s top gain getters.
3M (MMM 120.30, -1.29, -1.06%) is underperforming.
The DJIA holds gains of about +0.72% week-to-date.
Stock market kicked off this first day of the the so-called Santa Claus rally period (last five trading days of the year plus the first two trading sessions of the new year) on a downbeat note with all the major indices registering losses.
Tesla (TSLA 123.90, -1.415, -1.2%) is a losing standout for the group, again. This comes after CEO Elon Musk said in an interview that he will not sell Tesla shares for 18-24 months and buybacks will depend on the economy, according to The Wall Street Journal.Nine of the 11 S&P 500 sectors trade in the green, albeit with modest gains. The only exception is the energy sector (+2.6%), which is bolstered by rising oil prices ($79.90/bbl, +2.41, +3.1%). WTI crude oil futures are responding to Russia’s Deputy Prime Minister Novak saying that his country may reduce its oil output by up to 7% early next year.
Meanwhile, the influential information technology sector (-0.3%) sits in last place,but is well off earlier lows when it was down 1.4%.
New home sales increased 5.8% month-over-month in November to a seasonally adjusted annual rate of 640,000 units (consensus 600,000) from a downwardly revised 605,000 (from 632,000) in October. On a year-over-year basis, new home sales were down 15.3%.
The key takeaway from the report is that it reflects how the pullback in mortgage rates in November proved to be an inducement for prospective buyers; however, affordability pressures remain for lower-income buyers and that is holding back overall sales potential.
The final December University of Michigan Index of Consumer Sentiment checked in at 59.7 (onsensus 59.1) versus the preliminary reading of 59.1 and the final reading of 56.8 for November. In the same period a year ago, the index stood at 70.6.
The key takeaway from the report is that consumer sentiment improved as inflation pressures eased.
Energy complex futures are near their session highs.
Natural gas futures are up 2.3% to $5.12/mmbtu.
WTI crude oil futures pushed past $80.00/bbl, up 3.2%. This comes after Russia’s Deputy Prime Minister Novak said that his country may reduce its oil output by up to 7% early next year.The uptick in oil prices led the S&P 500 energy sector (+2.7%) to first place among the 11 sectors by a wide margin.
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