SWS Daily Market Update - Aug 18, 2021

Markets dropped today after the July minutes of the Fed Open Market Committee showed that most members agreed that they would begin slowing their $120 billion monthly purchases of treasury bonds and mortgage-backed securities later this year. Future meetings include Jackson Hole symposium in August and the scheduled September and November meetings. It appears that tapering of asset purchases will not be linked to an increase in interest rates. All the major indices dropped by 1% or more.

Stocks in general are trading in a narrow range as the competing effects of corporate earnings, supportive Fed policy, government fiscal stimulus are balanced against the inflation risk, increasing COVID infections and the chance of a change in Fed policy. News on any of these can be sufficient to change the market on a given day.

Housing starts in July dropped by 7% to 1.53 million annual rate, below the estimated 1.61 million and a three month low. Housing starts in June were 1.59 million. Year on year, the rate is 2.5% above July 2020. There was a 4.5% decrease in single family starts and 13.1% drop in multifamily. Builders blamed the decrease on shortages of land, materials and labor. Increased construction could help reduce record high prices by improving inventory.

Building permits increased 2.6% in July to an annual rate of 1.64 million, mainly from an increase in multifamily applications. Single family permits were down 1.7%. The estimate was for 1.59 million and June had a rate of 1.64 million.

Housing completions in July were up 5.6% from June and 3.8% above July 2020.

Economic news for August 19

Initial jobless claims for week of August 14: estimate 365,000, previous 375,000

Continuing jobless claims for week of August 7: previous 2.87 million

Index of leading economic indicators for July: estimate 0.7%, previous 0.7%​


The SP 500 is down by 1.07% to close at 4400.27. The index is down 1.07% over five days, up 0.95% over one month, up 6.91% over three months and up 30.38% over one year.

The trailing P/E is 31.31 compared to 35.39 one year ago and estimated future P/E 22.29. Dividend yield is currently 1.32 compared with 1.81 one year ago.

Leading stocks were LOW up 9.59%, TJX up 5.57%, VIAC up 3.69%, TSLA up 3.50% and ROST up 2.72%.

Trailing stocks were OGN down 5.06%, STE down 4.22%, AMD down 3.83%, LUMN down 3.81% and CME down 3.80%.

The Dow Jones industrial Average is down by 1.08% to close at 34960.69. The DOW is down 1.48% over five days, up 0.47% over one month, up 3.14% over three months and up 26.24% over one year.

The trailing P/E is 23.51 compared with 27.66 year ago and an estimated future P/E of 19.50. The current dividend yield is 1.80% compared with 2.26 one year ago.

Leading stocks were CRM up 1.71%, HD up 0.25%, TRV down 0.11%, WBA up 0.24% and MSFT up 0.61%.

Trailing stocks were CVX down 2.71%, AAPL down 2.55%, IBM down 2.07%, AMGN down 1.89%, and CAT down 1.70%.

The NASDAQ composite is down by 0.89% and closed at 14525.91. NASDAQ is down 1.62% over five days, down 0.72% over one month, up 9.22% over 3 months and up 30.32% over one year.

Leading stocks were PMCB up 189.47%, SGOC up 67.44%, VRPX up 49.19%, AZRX up 31.71% and MDJH up 27.62%.

Trailing stocks were America’s Car-Mart Inc down 18.60%, PCVX down 14.76%, SESN down 13.25%, WAVE down 12.72%, and INAB down 12.53%.

The MidCap SP400 is down by 1.19% to close at 2667.07. The SP400 is down 2.73% for the past 5 days, up 0.27% for the past month, up 0.21% for the past 3 months and up 38.34% over the past year.

Leading stocks were X up 4.21%, YELP up 3.03% and CAR up 2.51%.

Trailing stocks were CREE down 9.15%, CDK down 8.49% and THS down 4.98%

The SmallCap SP600 is down by 0.80% to close at 1312.82. The SP600 is down 3.95% for the past 5 days, up 1.51% for the past month, down 1.55% for the past 3 months and up 44.52% over the past year.

Leading stocks were BNED up 6.20%, TISI up 5.80% and LTHM up 4.69%.

Trailing stocks were CRMT down 18.60%, PLCE down 6.54% and PNTG down 5.70%.

The CBOE VIX is up by 20.44% and closed at 21.57. The VIX is up 34.31% over five days, up 20.44% over one month, down 2.75% over three months and down 4.30% over one year.

On the New York stock exchange 901 stocks advanced and 2368 declined, while on Nasdaq 1749 advanced and 2588 declined.

There were 74 new 52 week highs and 72 new 52 week lows on NYSE with 66 new highs and 165 new lows on NASDAQ.

The 2 year Treasury note yield is 0.213% and 10 year is 1.262%. The 10 year yield is down 10.0% over five days, down 1.8% over one month, down 36.2% three months ago, and up 61.0% one year ago.

SP500 Sector Performance % change

Consumer Discretionary +0.15

Utilities -0.47

Communication Services -0.72

Real Estate -1.08

Industrials -1.10

Materials -1.13

Financials -1.16

Consumer Staples -1.27

Information Technology -1.39

Health Care -1.46

Energy -2.40

Consumer Discretionary has been down 2.73% over five days, down 3.27% over one month, up 4.68% over three months and up 16.49% over one year.

Energy has been down 6.74% over five days, down 5.53% over one month, down 9.57% over three months and up 27.18% over one year.

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