Fed Cools Rate Cut Eagerness

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as Fed cools rate cut eagerness. 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:

Stock futures little changed as Wall Street awaits Fed’s Powell remarks

U.S. stock index futures were little changed Tuesday morning as investors awaited commentary from the top Federal Reserve official. At around 7:10 a.m. ET, Dow Jones Industrial Average futures slipped 23 points, indicating a marginal gain at the open. Futures on the S&P 500 and Nasdaq 100 also traded slightly lower.

The S&P 500 (SPY) dropped -0.95% today. Sector decliners led advancers 10 to 1 as shown below in the sector graph. Communication services (XLC), technology (XLK) and real estate (XLRE) led decliners down with losses of over 1%. Consumer discretionary (XLY), consumer staples (XLP), energy (XLE), financials (XLF), healthcare (XLV), industrials (XLI) and utilities (XLU) each suffered small losses of less than 1%. Materials (XLB) squeezed out a minor gain of less than 1%.

The Dow Jones index lost 179 points (-0.67%) to close at 26,548. The Nasdaq subtracted 120 points (-1.51%) to settle at 7,884.

Fed Cools Rate Cut Eagerness

Stocks finished in the red Tuesday as Fed Chair Powell’s comments dampened hope of a rate cut next month. Jerome Powell said in a speech the central bank is assessing whether current economic uncertainties call for lower rates. The consumer confidence index fell to 121.5 versus an estimate of 131.1…hitting its lowest level since September 2017. Commentary on the number pointed to escalating trade tensions as the culprit for the loss of confidence.

When reading the above CNBC article I saw this quote regarding the relationship between bonds and equities, “Bond markets appear to be signaling an economic slowdown, while equities suggest growth will continue in a low inflation Goldilocks scenario,” said Mark Haefele, global chief investment officer at UBS Global Wealth Management. “Both stories only make sense if we conclude bond markets are focused on a pre-emptive Fed strike to forestall the risk of a recession, while equities are telling us that the Fed will be successful.”

Key Takeaways…

I took the following CNBC screenshots today regarding big cap rally, biggest point contributors and transport troubles:

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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S&P 500 Sector Graph

Fed Cools Rate Cut Eagerness

S&P 500 (SPY)

Fed Cools Rate Cut Eagerness

Communication Services (XLC)

Fed Cools Rate Cut Eagerness

Consumer Discretionary (XLY)

Fed Cools Rate Cut Eagerness

Consumer Staples (XLP)

Fed Cools Rate Cut Eagerness

Energy (XLE)

Fed Cools Rate Cut Eagerness

Financials (XLF)

Fed Cools Rate Cut Eagerness

Real Estate (XLRE)

Fed Cools Rate Cut Eagerness

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

Technology (XLK)

Utilities (XLU)

S&P 500 Sector Heat Map


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