Story

Bulls Take a Breather

Daily Market Comment

June 5, 2023

It was a quiet start to the week as the major averages drifted lower coming off the DJIA's best single day of gains since January. Economic data was weak but mostly in line with the ISM Services Index coming in at 51.9, while the ISM Non-Mfg PMI increased to 59.6 from 59.5 the prior month. Yields were little changed. Crude oil prices jumped early as Saudi Arabia announced OPEC+ would cut production by 1 million barrels over the weekend. Crude topped out at $74.20 a barrel before reversing the spike and closing almost flat at $71.82. The NASDAQ outperformed on strength in big cap tech as Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META) and Apple (AAPL) all hit 52-week highs. Apple saw its morning gains recede after it announced its first major product since 2014, however, and finished lower. The sectors closed the session mixed with Utilities (XLU), Healthcare (XLV), Consumer Discretionary (XLY) and Communication Services (XLC) higher, while Industrials (XLI), Energy (XLE), Technology (XLK) and Financial (XLF) finished lower. Intel (INTC) and 3M (MMM) were the weakest components in the DJIA as it dropped 199.90 points (-0.59%) to 33562.86. The S&P 500 slipped 8.58 points (-0.20%) to 4273.79, while the NASDAQ eased 11.34 points (-0.09%) finishing at 13229.43. The small cap Russell 2000 lost -1.32%, falling below support at its 100-day MA.

Breadth was negative with declining issues beating advancing issues 1.8:1 on the NYSE and 1.5:1 on the NASDAQ. Declining volume was 56% on the NYSE and 51% of the NASDAQ. The VIX rose 0.13 (+0.89%) and closed at 14.73. Crude oil prices increased 0.09 (+0.11%) and the July contract closed at $71.82 a barrel. Gold prices added 8.50 (+0.43%) and finished at $1978.10 an ounce. Bitcoin (BTC) ended the session at $25,600.

After last week's market gains investors were hoping to see breadth in the market expand but we were back to a few big cap tech winners today holding prices up. The small cap Russell 2000 was the biggest loser on the weaker economic data and traders will be keeping a keen eye to see if the index can hold support after it broke out to its highest level since March on Friday. We still need to see a broadening out of accumulation if the market is going to work higher.

Earnings releases to watch for on Tuesday include: JM Smuckers Co (SJM), Casey's General Store (CASY), Ciena Corp (CIEN), Thor Industries (THO), Academy Sports and Outdoors (ASO), Cracker barrel Old Country Stores (CBRL), Yext Inc (YEXT) and G-III Apparel Group (GIII).

Tuesday's Market Moving Economic Calendar: T-Bill auctions

 

By David L. Blake, CMT

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Market Recap - 06/05/2023

Index Close Day Change Day % Change YTD % Change
NASDAQ COMPOSITE 13229.43 -11.34 -0.09% 26.4%
DJ UTILITIES 904.22 4.18 0.46% -6.53%
DJ TRANSPORT 13989.87 -160.61 -1.14% 4.47%
DJ INDUSTRIALS 33562.86 -199.9 -0.59% 1.25%
NYSE COMPOSITE 15275.21 -69.99 -0.46% 0.6%
S & P 100 INDEX 1997.76 -3.7 -0.18% 16.88%
RUSSELL 2000 1806.71 -24.2 -1.32% 2.58%
S&P 500 4273.79 -8.58 -0.2% 11.31%
CBOE MKT VOLATILITY 14.73 0.13 0.89% -32.03%
AMEX COMPOSITE 3996.51 -41.03 -1.02% -3.36%
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