SWS Daily Market Update - August 17, 2021

All three major indices dropped today as the markets were concerned by an unexpected drop in retail sales, coupled with a seemingly non-stop increase in Delta variant COVID infections. The infections could lead to renewed restrictions on consumers that could damage the economy. This came on top of data yesterday showing that China’s economy slowed more than anticipated.

The Census Bureau reported advance estimates of retail sales for July showed a 1.1% decrease from June compared with the estimated 0.6% drop. Decreases were notable in cars, e-commerce and and homes. Year over year, sales were up by 15.8%. Increases were seen in retail trade, clothing and food services among others.

The Federal Reserve report today on industrial production demonstrated at 0.9% increase in July, well above the 0.5% estimate and compared with a 0.2% increase in June. Manufacturing rose 1.4% and much of the gain is due to increased motor vehicle production. Industrial production is 6.6 higher than one year ago and 0.2% lower than the February 2020 level. Manufacturing account for 11.9% of the US economy.

Capacity utilization increased 0.7% in July to 76.1%, which is 3.5% below its long term average. The estimate was 75.5% and June was 75.4%. Capacity utilization measures how much slack remains in the economy, and therefore how much it could grow without simulating inflation.

Business inventories rose a robust 0.8% in June, meeting estimates, after increasing 0.6% in May. The increase was 6.6% on a year on year basis. Inventory buildup will support economic growth for the rest of the year. Inventories rose 1.0% at manufacturers, 1.1% at wholesale and 0.3% at retail.

Homebuilder confidence dropped in August by 5 points to 80, the lowest value since July 2020. The estimate was 80. A value above 50 indicates that more builders regard the market as favorable. The highest value was 90 in November 2020. Builders are concerned buy high construction costs and ongoing supply shortages. The measure of home sales expectations for the next sic months was steady at 81 while current sales conditions dropped by 5 to 81. The prospective buyers index also declined by 5 to 60.

Economic news for August 18

Housing starts for July: estimate 1.61 million, previous 1.59 million

Building permits for July: estimate 1.59 million, previous 1.64 million​


The SP 500 is down by 0.71% to close at 4448.08. The index is up 0.26% over five days, up 2.89% over one month, up 7.76% over three months and up 31.22% 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 MRNA up 7.49%, KR up 4.58%, VRTX up 3.91%, PFE up 3.09% and OGN up 3.06%.

Trailing stocks were DXC down 11.83%, UAA down 5.96%, UA down 5.90%, LOW down 5.80% and FCX down 5.78%.

The Dow Jones industrial Average is down by 0.79% to close at 35343.28. The DOW is up 0.22% over five days, up 2.41% over one month, up 3.77% over three months and up 27.23% over one year.

The trailing P/E is 23.76 compared with 28.11 year ago and an estimated future P/E of 19.50. The current dividend yield is 1.78% compared with 2.21 one year ago.

Leading stocks were MRK up 1.15%, UNH up 1.10%, JNJ up 0.92%, TRV up 0.74% and VZ up 0.36%.

Trailing stocks were HD down 4.27%, BA down 2.99%, CAT down 1.96%, DIS down 1.82%, and DOW down 1.60%.

The NASDAQ composite is down by 0.93% and closed at 14656.18. NASDAQ is down 0.89% over five days, up 1.08% over one month, up 10.17% over 3 months and up 30.73% over one year.

Leading stocks were VRPX up 265.48%, ALF up 40.64%, MNDY up 24.45%, SESN up 23.77% and BDSX up 21.52%.

Trailing stocks were Helbiz Inc down 29.67%, TC down 26.77%, VIEW down 24.32%, CREX down 22.60%, and KBNT down 22.30%.

The MidCap SP400 is down by 1.19% to close at 2692.50. The SP400 is down 0.99% for the past 5 days, up 1.90% for the past month, up 0.08% for the past 3 months and up 39.08% over the past year.

Leading stocks were EBS up 4.68%, MMS up 2.95% and EXEL up 2.76%.

Trailing stocks were LAD down 9.69%, AN down 6.29% and SKX down 5.80%

The SmallCap SP600 is down by 1.47% to close at 1323.39. The SP600 is down 2.49% for the past 5 days, up 0.99% for the past month, down 1.37% for the past 3 months and up 45.89% over the past year.

Leading stocks were FN up 7.78%, CHRS up 4.49% and ANDE up 3.73%.

Trailing stocks were TISI down 9.21%, TMST down 9.08% and CELH down 9.05%.

The CBOE VIX is up by 11.10% and closed at 17.91. The VIX is up 6.67% over five days, down 9.22% over one month, down 16.07% over three months and down 16.74% over one year.

On the New York stock exchange 899 stocks advanced and 2434 declined, while on Nasdaq 1270 advanced and 3199 declined.

There were 87 new 52 week highs and 100 new 52 week lows on NYSE with 62 new highs and 340 new lows on NASDAQ.

The 2 year Treasury note yield is 0.209% and 10 year is 1.264%. The 10 year yield is down 7.3% over five days, down 2.8% over one month, down 41.1% three months ago, and up 58.1% one year ago.

SP500 Sector Performance % change

Health Care +1.12

Real Estate +0.14

Consumer Staples +0.04

Utilities +0.01

Financials -0.84

Information Technology -0.87

Energy -0.92

Communication Services -0.99

Industrials -1.06

Materials -1.21

Consumer Discretionary -2.31

Health Care has been up 2.66% over five days, up 6.11% over one month, up 10.98% over three months and up 27.38% over one year.

Consumer Discretionary has been down 2.75% over five days, down 2.62% over one month, up 3.74% over three months and up 15.49% over one year.

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