Wall Street Wobbles Into Weekend
September 24, 2021
The major averages finished mixed to close out the week after surging off Monday’s selloff bottom. Earnings were mixed as Costco Wholesale (COST) jumped +3.31% after beating estimates, but Nike (NKE) dropped -6.26% after missing on revenues and warnings of supply chain issues. Interest rates ticked higher for a second day and the 10-year Treasury yield hit 1.45%, while the 30-year T-Bill flirted with 2%. The higher rates clipped interest sensitive sectors and REITs (XLRE), Utilities (XLU) and Healthcare (XLV) were the worst performers. Buying in cyclical stocks gave a boost to Energy (XLE), Communication Services (XLC) and Financials (XLF). Bitcoin lost more than 3% after China declared digital currencies illegal. The major averages came off their highs the last hour of trading but were able to rebound from a wretched start to the week to finish positive. The DJIA added 33.18 points (+0.10%) and settled at 34798.00, while the S&P 500 picked up 6.50 points (+0.15%) finishing at 4455.48. The NASDAQ retreated at the close falling 4.54 points (-0.03%) and closed at 15047.70.
Breadth was negative with declining issues beating advancing issues 1.4:1 on the NYSE and 1.4:1 on the NASDAQ. Declining volume was 54% and 51% of the NASDAQ. The VIX lost 0.88 (-4.72%) and closed at 17.75. Crude oil prices rose 0.66 (+0.90%) and the November contract closed at $73.96 a barrel. Gold prices lost 1.30 (-0.07%) and finished at $1748.50 an ounce. Bitcoin (BTC) ended the session at $42,900.
Wall Street wobbled into the weekend after surviving Monday’s debt scare but the major averages were able to post positive for the period. The DJIA snapped a three-week losing streak, while the S&P 500 and NASDAQ ended their two-week slide. Investors need to keep an eye on rising rates as investors will begin to rotate out of growth and into cyclical as we head into the fourth quarter. So far earnings estimates for Q3 are on the rise and we could see the market firm up as earnings season kicks off again in three week.
Earnings releases to watch for on Monday include: Comtech Telecommunications Corp (CMTL), Concentrix Corp (CNXC) and Weibo Corp (WB).
Monday’s Market Moving Economic Calendar: Durable Goods Orders, Dallas Fed Mfg Index, T-Bill Auctions.
By David L. Blake, CMT