Bond Yields Becoming Factor Within Stocks Returns
Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map after bond yields becoming factor within stocks returns. Stocks in heat map are based on the top 10 holdings of each sector ETF. Click on each picture to zoom in. Below is a summary of today’s action on Wall Street provided by CNBC:
U.S. stock index futures took a pause Thursday as Wall Street kicked off a new trading month. Dow Jones industrial average futures fell 34 points, while S&P 500 futures gained 1.75 points. Nasdaq 100 futures slipped 4.75 points. On Wednesday, the Dow ended January 5.6 percent up, while the S&P 500 rose 5.8 percent in the same period.
The S&P 500 (SPY) fell 0.06% today as bond yields becoming factor within stocks returns. S&P sector decliners led advancers by 6 to 4. Decliners were led to the downside by real estate (XLRE) -1.83%, utilities (XLU) -1.57%, materials (XLB) -1.37% and consumer discretionary (XLY) -1.11%. Consumer staples (XLP) and industrials (XLI) dropped less than 1%. Energy (XLE) led advancers with a 1% gain. Financials (XLF), healthcare (XLV) and technology (XLK) all ended positive by less than 1%.
The Dow Jones index gained a mild 37 points finishing at 26,186. The Nasdaq had a minimal loss of 25 points closing at 7,385.
Bond yields continued to play a factor in the returns of stocks. The 10 year bond yield reach 2.78% while the 30 year bond yield rose past 3%, its first time since last May. As an example of how bond rates effect stocks, look at real estate (XLRE) and utilities (XLU) today losing 1.83% and 1.57% respectively. Those two sectors are used as bond proxies, meaning investors usually buy those sectors when interest rates were lower until recently.
In this section I usually cover the standouts from today’s session with its closing price. However, there are many stocks moving in after hours actions due to earnings reports after the bell. AMZN pops as much as 6% in earnings beat. Alphabet (GOOGL) falters after earnings miss. Apple (AAPL) jumps despite iPhone sales miss and disappointing forward guidance. Visa (V) sees higher profits thanks to good holiday season.
Credit: Sector Graph provided by Sector SPDR app. Sector breakdown provided by Charles Schwab. Sector heat map provided by finviz. Information Credit: News Headlines and quotes were taken from CNBC in the writing of this post.
S&P 500 Sector Graph
S&P 500 (SPY)
Consumer Discretionary (XLY)
Consumer Staples (XLP)
Real Estate (XLRE)
S&P 500 Sector Heat Map