Investors Confident Likely Rate Cut Coming

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as investors confident likely rate cut coming. 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 signal more gains after Wall Street logs its second best day of the year

U.S. stock index futures were slightly higher on Wednesday morning, after Wall Street delivered its second best day of trade for 2019 in the previous session. At 3:00 a.m. ET, Dow futures were up 34 points, pointing to a higher open of more than 43 points.

The S&P 500 (SPY) added +0.82% today. Sector advancers led decliners 10 to 1 as shown below in the sector graph. Real estate (XLRE) +2.28% and utilities (XLU) +2.14% led advancers higher. Consumer staples (XLP) and technology (XLK) had gains of 1% or more. Communication services (XLC), consumer discretionary (XLY), financials (XLF), healthcare (XLV), industrials (XLI) and materials (XLB) each had minor gains of less than 1%. Energy (XLE) lost 1.11%.

The Dow Jones index climbed +207 points (+0.82%) to close at 25,539. The Nasdaq ended +48 points higher (+0.64%) to settle at 7,575.

Investors Confident Likely Rate Cut Coming

Stocks ended in the green on Wednesday as investors bet on future rate cuts. Powell said on Tuesday the central bank will keep an eye on current developments in the economy, and would do what it must to “sustain the expansion. ” I found the following quote from the above CNBC article to be appropriate as Fed rate cuts usually don’t come for good reasons, “The bad news means the Fed may keep the money cheap and inclined to rate cuts. That’s what the market wanted to hear and it backs up the probabilities” of lower rates, said JJ Kinahan, chief market strategist at TD Ameritrade. But “people sometimes forget that rates usually don’t come down for good reason. ADP private payrolls only added 27,000 jobs in May compared to an estimate of 173,000, its lowest addition since March 2010.

Key Takeaway…

I took the following CNBC screenshots this week regarding what’s driving markets and Fed rate cut probabilities:

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. Photo Credit: federal reserve.gov 

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6/5/19

S&P 500 Sector Graph

Investors Confident Likely Rate Cut Coming

S&P 500 (SPY)

Investors Confident Likely Rate Cut Coming

Communication Services (XLC)

Investors Confident Likely Rate Cut Coming

Consumer Discretionary (XLY)

Investors Confident Likely Rate Cut Coming

Consumer Staples (XLP)

Investors Confident Likely Rate Cut Coming

Energy (XLE)

Investors Confident Likely Rate Cut Coming

Financials (XLF)

Investors Confident Likely Rate Cut Coming

Real Estate (XLRE)

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

Technology (XLK)

Utilities (XLU)

S&P 500 Sector Heat Map

 

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