Nasdaq Leads Again
The stock market trades on a modestly higher note at midday with the Nasdaq (+0.4%) showing relative strength once again while the S&P 500 (+0.2%) hovers just above its flat line. Equity indices climbed past yesterday's highs in morning trade, but the past couple hours have seen a pullback from highs. However, the overall movement has been limited, keeping the S&P 500 in a thirteen-point range. The market's opening advance was assisted by reports of a $2 trln spending package that will be sought by the new administration, but recent selling in influential sectors like technology (-0.2%), communication services (-0.4%), and consumer discretionary (-0.2%) has weighed on the broader market. Apple (AAPL 129.94, -0.95, -0.7%) and the next four largest components of the tech sector trade in the red, overshadowing continued strength among chipmakers. The PHLX Semiconductor Index (+3.0%) has extended its January gain to 10.3%, thanks in large part to a better than expected quarterly report and guidance from Taiwan Semiconductor Manufacturing Company (TSM 132.21, +12.98, +10.9%). Strong results from the world's largest chip foundry bode well for other components of the SOX index. Communication services and consumer discretionary sectors have also been pressured by their top components. Amazon (AMZN 3147.89, -18.00, -0.6%) is finding resistance near its 50-day moving average (3172.28) while Facebook (FB 248.04, -3.60, -1.5%) has slipped past its 200-day moving average (247.74). On the upside, the energy sector (+3.0%) is seeing a continuation of its recent strength even though crude oil is up just $0.25, or 0.5%, at $53.16/bbl. Industrials (+0.8%) and financials (+0.6%) hold solid gains with banks rising ahead of tomorrow's release of quarterly results from JPMorgan Chase (JPM 141.47, +1.12, +0.8%) and three of its peers. Treasuries are mixed with the 10-yr note trading flat and its yield sitting at 1.09%. Fed Chairman Jay Powell is delivering a speech right now, during which he reiterated that the fed funds rate will not be raised anytime soon. Economic data released today was limited to jobless claims and import/export prices: For the week ending January 9, initial claims spiked by 181,000 to 965,000 (Briefing.com consensus 780,000). That's the highest claims number since August. Continuing claims for the week ending January 2 increased by 199,000 to 5.271 million. The key takeaway from the report for the market is that it simply paints the need for additional stimulus; hence, this bad news gets interpreted as good news. Import prices rose 0.9% in December while the November increase was revised up to 0.2% from 0.1%. Excluding oil, import prices rose 0.4% after decreasing a revised 0.2% (from -0.3%) in November. Export prices rose 1.1% in December while the November increase was revised up to 0.7% from 0.6%. Excluding agriculture, export prices rose 1.3% after increasing 0.3% in November.