Oil Production Explains Muted Market Reaction

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as oil production explains muted market reaction. 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 stock markets set to edge higher as Middle East fears recede

U.S. stock index futures were hovering around the flatline Tuesday morning, despite ongoing geopolitical tensions. At around 2 a.m. ET, Dow futures rose 37 points, indicating a higher open of more than 8 points. Futures on the S&P 500 and Nasdaq indexes were flat. U.S. equities rose on Monday reversing earlier losses.

The S&P 500 (SPY) dropped -0.28% today. Sector decliners led advancers 10 to 1 as shown below in the sector graph. Real estate (XLRE) led decliners down with a -1.09% loss. Consumer discretionary (XLY), consumer staples (XLP), energy (XLE), financials (XLF), healthcare (XLV), industrials (XLI), materials (XLB), technology (XLK) and utilities (XLU) each suffered small losses of less than 1%. Communication services (XLC) enjoyed a minor gain of less than 1%.

The Dow Jones index fell -119 points (-0.42%) to close at 28,583. The Nasdaq looked like it barely moved, losing -2 points (-0.03%) to settle at 9,068.

Oil Production Explains Muted Market Reaction

Stocks had minimal losses Tuesday as investors play the waiting game regarding US Iran tensions.

Dryden Pence, chief investment officer at Pence Wealth Management, said the market is not too worried about the conflict’s impact on oil given how much U.S. production has risen in recent years.

“We are the biggest oil producer in the world and we’re able to make up what’s lost from Iran,” Pence said. “If you took Iran completely out of the oil market, that’s not a big deal.”

“That’s why the market reaction has been so muted compared to what it would’ve been 10 years ago,” he added.

Key Takeaway…

Cashin: Investors waiting for Iranian retaliation over drone strike

CNBC’s Bob Pisani and Art Cashin, of UBS, discuss the morning’s market activity.

Notable S&P 500 Movers…

Below I’ve highlighted some notable S&P 500 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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1/7/20

S&P 500 Sector Graph

Oil Production Explains Muted Market Reaction

S&P 500 (SPY)

Oil Production Explains Muted Market Reaction

Communication Services (XLC)

Oil Production Explains Muted Market Reaction

Consumer Discretionary (XLY)

Oil Production Explains Muted Market Reaction

Consumer Staples (XLP)

Oil Production Explains Muted Market Reaction

Energy (XLE)

Oil Production Explains Muted Market Reaction

Financials (XLF)

Oil Production Explains Muted Market Reaction

Real Estate (XLRE)

Oil Production Explains Muted Market Reaction

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

Technology (XLK)

Utilities (XLU)

S&P 500 Sector Heat Map

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Episode 1 goes over my basic investment strategy for individual investors (from years of watching and learning from CNBC).

 

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