Trend and Momentum Looking for Pullback

Here is a daily recap of the S&P 500 broken down by sector followed by sector heat map as trend and momentum looking for pullback. 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:

S&P 500 posts biggest decline in nearly two months, Dow drops 250 points to kick off December

Stocks dropped as investors digested disappointing manufacturing data along with the latest trade news after capping a strong month.

The S&P 500 (SPY) fell -0.86% today. Sector decliners led advancers 9 to 2 as shown below in the sector graph. Industrials (XLI), materials (XLB), real estate (XLRE) and technology (XLK) led decliners down with losses of more than 1%. Communication services (XLC), consumer discretionary (XLY), financials (XLF), healthcare (XLV) and utilities (XLU) each suffered minor losses of less than 1%. Consumer staples (XLP) and energy (XLE) each enjoyed small gains of less than 1%.

The Dow Jones index dropped -268 points (-0.96%) to close at 27,783. The Nasdaq gave back -97 points (-1.12%) to settle at 8,567.

Trend and Momentum Looking for Pullback

Stocks finished in the red Monday as the latest manufacturing data contracted and trade news kept stocks from gains.

Monday’s losses on the first trading day of December came after a strong performance last month. The major averages had their biggest monthly gains since June, rallying to record highs. The S&P 500 climbed 3.4% last month while the Dow advanced 3.7% and the Nasdaq rallied 4.5%.

The trend and momentum going into December are bullish,” said Bruce Bittles, chief investment strategist at Baird. “However, investor optimism is registering as excessive by many of the services we follow. While optimism is not euphoric, excessive investor optimism generally suggests a pause in a bull market.”

Manufacturing activity in the U.S. continued to contract last month, the Institute for Supply Management said. The ISM Manufacturing PMI dipped to 48.1 in November. That’s below an estimate of 49.4. Stocks hit their session lows after the data was released.

Sentiment was also dented after President Donald Trump said China still wants to make a deal on trade, “but we’ll see what happens.” There is no clear indication of when both countries will be able to sign an agreement, and last week saw fresh tension between Washington and Beijing after Trump signed legislation supporting protesters in Hong Kong. Trump said the bill signing “doesn’t make it better.”

That comment came after Chinese state media reported Sunday that Beijing wants a cancellation of tariffs for a phase one trade deal. Both sides need to reach a deal before Dec. 15. If not, additional U.S. tariffs on Chinese goods could take effect.

Key Takeaways…

I took the following CNBC screenshots today regarding global growth bottoming, December markets, so far in 2019, avoiding a repeat, tax lost watch list 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

Trend and Momentum Looking for Pullback

S&P 500 (SPY)

Trend and Momentum Looking for Pullback

Communication Services (XLC)

Trend and Momentum Looking for Pullback

Consumer Discretionary (XLY)

Trend and Momentum Looking for Pullback

Consumer Staples (XLP)

Trend and Momentum Looking for Pullback

Energy (XLE)

Trend and Momentum Looking for Pullback

Financials (XLF)

Trend and Momentum Looking for Pullback

Real Estate (XLRE)

Trend and Momentum Looking for Pullback

Healthcare (XLV)

Industrials (XLI)

Materials (XLB)

Technology (XLK)

Utilities (XLU)

S&P 500 Sector Heat Map


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