Saved by a burst of buying interest in the last 10 minutes of yesterday’s thinly-traded session, the S&P 500 finished higher for the fourth consecutive session and sits just 0.3% away from its prior record closing high of 4,796.56 seen on January 3, 2022.
It feels as if there is a magnetic force pulling the S&P 500 back to record territory, but it’s not there yet. It is not impossible for the S&P 500 to get there today, but some work will need to get done to complete a round trip that has been driven by interest rate swings fueled by the Fed’s (expected) policy stance.
Currently, the S&P 500 futures are flat and are trading 0.1% above fair value, the Nasdaq 100 futures are up 40 points and are trading 0.3% above fair value, and the Dow Jones Industrial Average futures are down 61 points and are trading fractionally below fair value.
Modest gains in many of the mega-cap stocks has provided a support element.
Apple (AAPL) is up 0.3% as a pause on the import ban has allowed for the resumption of Apple Watch Series 9 and Ultra 2 sales. Tesla (TSLA) is up 1.0%, aided in part by a Teslarati report that Elon Musk is expected to announce a Tesla India launch in January.
Otherwise, the corporate news flow isn’t really flowing in a meaningful way that would trigger a heightened level of trading interest. There was some economic data out a short time ago, and it hasn’t dialed up any real trading excitement either.
Initial jobless claims for the week ending December 23 increased by 12,000 to 218,000 (Briefing.com consensus 207,000). Continuing jobless claims for the week ending December 16 increased by 14,000 to 1.875 million.
The key takeaway from the report is that it won’t upset the market’s perception that the labor market remains in good shape overall, meaning the level of initial claims is not perceived yet as a threat to the soft landing view.
Separately, the advance international trade in goods deficit for November was $90.3 billion, up $0.7 billion from $89.6 billion in October. Advance retail inventories were down 0.1% month-over-month following a downwardly revised 0.1% decline (from 0.0%) in October. Advance wholesale inventories were down 0.2% month-over-month following a downwardly revised 0.3% decline (from -0.2%) in October.
The Treasury market, also tacking on thin trading volume, saw some gyrations in the wake of the data. The 2-yr note yield, which came down sharply on Wednesday, is up three basis points today to 4.26%, and the 10-yr note yield is also up three basis points to 3.82%.
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Originally Posted December 28, 2023 – Some magnetic appeal
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