Afternoon Debrief for the 7th of Aug 2019

Wall Street up in rebound trade but down from highs

The stock market is up today but is down from its session highs amid a lack of conviction following yesterday’s sell-off. The S&P 500 is up 0.3% after being up as much as 1.0% shortly after the open.

Like the benchmark index, the Dow Jones Industrial Average (+0.3%), Nasdaq Composite (+0.4%), and Russell 2000 (unch) are well off their highs. 

Although the market has pared its gains, the futures market last evening was indicating another big drop at the open after the Treasury Department labeled China a currency manipulator. China was quick to object and signaled its willingness to stabilize the yuan by fixing the currency at a modestly higher level and announcing that it will issue 30 billion yuan of offshore-denominated bills.

These moves eased some currency-related angst, helping propel a rebound in overnight action and contribute to today’s positive disposition. Still, there doesn’t appear to be much buying conviction as growth concerns have yet to subside while the U.S. remains at odds with China on trade. 

At this juncture, nine of the 11 S&P 500 sectors are up with the information technology (+0.9%) and real estate (+0.9%) sectors providing the leadership. Conversely, the materials sector (-0.9%) is getting pressured by disappointing results and guidance from Mosaic (MOS 20.30, -3.29, -14.0%), while the energy sector (-0.9%) is down amid a decline in the price of oil ($54.38, -$0.31, -0.6%).

In other earnings news, shares of Zoetis (ZTS 119.85, +7.30, +6.5%), Take-Two Interactive (TTWO 126.39, +11.01, +9.5%), and KLA Corporation (KLAC 134.00, +7.54, +5.9%) have advanced noticeably following upbeat results and/or guidance. 

U.S. Treasuries have stabilized today but in a curve-flattening trade. Currently, the 2-yr yield is up three basis points to 1.61%, and the 10-yr yield is unchanged at 1.74%. The U.S. Dollar Index is up 0.1% to 97.59.

Separately, the JOLTS — Job Openings report for June was today’s lone economic report. Job openings increased to 7.348 million from a revised 7.268 million in May (from 7.323). 

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