Aviate US Summary

The authors of the content on this page from Sept 2012 to June 2017 are:
Market Commentaries: Gary Paulin, Ameet Patel, Paul Moran, Douglas Morton, Oliver Sherman, Ben Brownette, Rob Arnott, James Santo, Neil Campling
Research: Ameet Patel, Paul Moran, Douglas Morton, Oliver Sherman, Rob Arnott, Neil Campling

S&P -0.72% (2063.4), D -0.66% (17603.9), N -0.83% (4652.0), CL1 -2.77% (36.82), Copper +0.51% (214.75), Gold -0.70% (1061.60) 10YrYld -0.01 (2.2925), DXY +0.13% (98.23), Vix +7.52% (17.29).

The S&P closed down 40bps from the European close ending the day basically at session lows. After trading horizontally for the afternoon, the additional downside all coming over the last hour with software, financials, autos, consumer, tech, phara/bio all underperforming in that span. Volumes tapering into year-end off 10% today to 4.5bln shares, well below avg of 7.3bln. Dollars traded off 15% to $160bln, more than 40% below avg. More than 85% of volume for the day to the downside.

Not a lot to excite the market today as the averages give back more than half of yesterday’s gains. News flow seemed, if anything, incrementally negative in the big picture. Crude one of the bigger stories today with its second -3% move of the week: Saudis commenting on “no change” to their production policy then DOE inventories rising vs expectations for a draw. All seemed to be a drag on stocks that couldn’t be shaken in absence of much else. Add to that a dismal 7yr auction to end the year and a default on some payments due on the 1st by Puerto Rico. Weather concerns too with reports of a possible record El Nino next year and the parts of the Mississippi River looking at record flooding. After yesterday’s pop, most shorted gives it all back today off more than 1% back to underperforming the broad market. Year end maneuvering seems to the main driver this week: case in point WMT +11bps best Dow performer today while NKE -1.6% the worst, those two names flipped ytd though (NKE +31.6%, WMT -28.2%). Dollar Index makes it 3 for 3 this week with another small 10bps gain despite Euro ending >1.093. Emerging mkts not as stable with EEM falling 1.6%. Full session in the US tomm. Initial jobless claims, ISM Milwaukee, Chicago Purchasing Manager #s due.

Outperformers: Refiners +10bps, Utilities -15bps, Household Products -30bps, Food/Staples Retailers -35bps, Pharma -35bps

Underperformers: Coal -5.8%, Metals/Mining -2.9%, Drillers -2.7%, Explorers -2.3%, Oil Services -1.7%

Commods: Sugar +2.5%, Coffee +1.8%, Nickel +1.3%, Cattle +1.1%, Lean Hogs +90bps…..OJ -5.1%, NatGas -4.3%, Heating Oil -3.5%, Crude -2.9%, Gasoline -2.6%

Eco: Pending Home Sales -0.9% vs +0.7% est m/m, +5.1% vs +4% est y/y