Fed Monetary Policy Remains Central Focus

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as Fed monetary policy remains central focus. 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 lower open

U.S. stocks were set to open slightly lower Tuesday morning.

The S&P 500 (SPY) added +0.26% today. Sector advancers led decliners 9 to 2 as shown below in the sector graph. Real estate (XLRE) +1.41% led advancers higher. Communication services (XLC), consumer discretionary (XLY), consumer staples (XLP), financials (XLF), healthcare (XLV), materials (XLB), technology (XLK) and utilities (XLU) each enjoyed small gains of less than 1%. Energy (XLE) dropped -1.39% lower on the day. Industrials (XLI) suffered a minor loss of less than 1%.

The Dow Jones index gained +33 points (+0.13%) to close at 27,110. The Nasdaq advanced +32 points (+0.40%) to settle at 8,186.

Fed Monetary Policy Remains Central Focus

Stocks ended flat on Tuesday as investors awaited the Fed’s monetary policy decision expected Wednesday as they conclude a two day monetary policy meeting.

The meeting is scheduled to end Wednesday, when the central bank is expected to announce its latest decision on monetary policy. The Fed is largely expected to cut rates by 25 basis points. That would be the central bank’s second rate cut of 2019.

U.S. crude futures skyrocketed more than 14% on Monday, their biggest one-day gain since December 2008, after the attacks. Energy stocks got a boost from the higher oil prices, with the sector gaining 3.41%. Crude plunged more than 5% on Tuesday after the Saudi energy minister said the country’s oil supply will be back online by the end of the month.

Value stocks have outperformed their growth counterparts this month, rising 6.7% through Tuesday’s close. Growth stocks, meanwhile, are down 0.4%. This is a reversal from an overarching trend seen over the past few years.

The iShares Edge MSCI Value Factor ETF (VLUE) is up about 30% over the past five years. The iShares Edge MSCI Momentum Factor ETF (MTUM) has surged over 80% in that time.

Key Takeaways…

I took the following CNBC screenshots today regarding moving markets, risks of recession, biggest risks, most bullish outcomes, most crowded trades, ready set cut, what should the Fed do, why cut rates 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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S&P 500 Sector Graph

Fed Monetary Policy Remains Central Focus

S&P 500 (SPY)

Fed Monetary Policy Remains Central Focus

Communication Services (XLC)

Fed Monetary Policy Remains Central Focus

Consumer Discretionary (XLY)

Fed Monetary Policy Remains Central Focus

Consumer Staples (XLP)

Fed Monetary Policy Remains Central Focus

Energy (XLE)

Fed Monetary Policy Remains Central Focus

Financials (XLF)

Fed Monetary Policy Remains Central Focus

Real Estate (XLRE)

Fed Monetary Policy Remains Central Focus

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

Technology (XLK)

Utilities (XLU)

S&P 500 Sector Heat Map


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