The Bear regained control on Wednesday after a hopeful open from major US indices. The Nasdaq led large cap. indices lower off -1.05% erasing yesterday’s gain while the S&P 500 and the Dow Industrials finished 0.77% and 0.60% lower respectively.
At the sector level, Utilities paced the market as expected on a down day adding 0.56% while Energy, Financials and Staples were also positive on the day. Discretionary, Technology, Materials and Healthcare sectors were all down >1.00% on the day as Tech. and Discretionary selling continues to be a hallmark of the current correction.
Yields fell slightly with the 2yr Yield now just 1bp higher than the 10yr. Crude and Commodities prices were up on the day and as buyers attempt to defend support on both.
Overseas, MSCI EAFE and EM Indices both appreciated >1% and we would expect some continued outperformance there if domestic stocks remain under pressure.
Initial and Continuing Jobless Claims are up on the economic calendar while big YTD winners LLY, VST and NRG headline more than a dozen S&P 500 constituents reporting earnings.
Eco Data Releases | Thursday August 8th, 2024
| Date Time | Event | Period | Survey | Actual | Prior | Revised |
| 08/08/2024 08:30 | Initial Jobless Claims | Aug 3 | 240k | — | 249k | — |
| 08/08/2024 08:30 | Continuing Claims | Jul 27 | 1871k | — | 1877k | — |
| 08/08/2024 10:00 | Wholesale Inventories MoM | Jun F | 0.2% | — | 0.2% | — |
| 08/08/2024 10:00 | Wholesale Trade Sales MoM | Jun | 0.3% | — | 0.4% | — |
S&P 500 Constituent Earnings Announcements by GICS Sector | Thursday August 8th, 2024
VST, up > 90% YTD, is one of the more under-discussed home run stocks in a while. It is also at an important pivot point on the price chart with $64.25 an important support level. Earnings will be a key test.
- VST (200-day m.a. | RSI | MACD )
- The $64.25 level is key support with a violation pointing to a downside target near $30
Thematic Thursday
Call it a theme, call it a factor, whatever you call it, low beta is in high demand as equities correct. We are long XLU, XLP, XLV and XLRE in our portfolio.
- Panel 1: S&P 500
- Panel 2: Invesco High-Beta ETF Relative to Invesco Low Vol. ETF
Sources: Bloomberg
