Energy Provides Lift Despite Recession Fears

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as energy provides lift despite recession fears. 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:

US futures point to slightly higher open

U.S. stock index futures were set to open slightly higher Wednesday morning. At around 02:40 a.m. ET, Dow futures rose 65 points, indicating a positive open of more than 43 points. Futures on the S&P and Nasdaq were both marginally higher.

The S&P 500 (SPY) rose by +0.65% today. 10 out of 11 sectors finished in positive territory as shown below in the sector graph. Consumer discretionary (XLY), energy (XLE) and industrials (XLI) led the market higher, each with gains of more than 1%. Communication services (XLC), consumer staples (XLP), financials (XLF), healthcare (XLV), materials (XLB), real estate (XLRE) and technology (XLK) each ended with small gains of less than 1%. Utilities (XLU) suffered a minor loss of less than 1%.

The Dow Jones index jumped +258 points (+1%) to close at 26,036. The Nasdaq added +29 points (+0.38%) to settle at 7,856.

Energy Provides Lift Despite Recession Fears

Stocks found positive gains in energy on Wednesday helping to balance out fears of an inverted yield curve and a coming recession.

The S&P 500 energy sector jumped 1.4%, led by a 10.6% surge in Cimarex Energy, as U.S. crude prices surged more than 1%. Oil jumped after the Energy Information Administration said U.S. crude inventories plummeted by 10 million barrels last week. Crude gained settled at $55.78 per barrel.

The closely watched spread between the 10-year Treasury yield and the 2-year rate briefly fell to negative 6 basis points Wednesday. The move extended losses from the previous session when the spread registered its lowest level since 2007.

A 10-year rate below the 2-year yield is viewed by fixed income traders as an important recession prognosticator, marking an unusual phenomenon as bondholders receive better compensation in the short term. Meanwhile, the U.S. 30-year Treasury yield fell to a new record low on Wednesday.

Key Takeaways…

I took the following CNBC screenshots today regarding cyclicals in August, September’s bull market checklist and driving the action:

Notable S&P 500 Movers…

Below I’ve highlighted some notable S&P movers (both winners & losers).

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.

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8/28/19

S&P 500 Sector Graph

Energy Provides Lift Despite Recession Fears

S&P 500 (SPY)

Energy Provides Lift Despite Recession Fears

Communication Services (XLC)

Energy Provides Lift Despite Recession Fears

Consumer Discretionary (XLY)

Energy Provides Lift Despite Recession Fears

Consumer Staples (XLP)

Energy Provides Lift Despite Recession Fears

Energy (XLE)

Energy Provides Lift Despite Recession Fears

Financials (XLF)

Energy Provides Lift Despite Recession Fears

Real Estate (XLRE)

Energy Provides Lift Despite Recession Fears

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

Technology (XLK)

Utilities (XLU)

S&P 500 Sector Heat Map

 

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