Stocks at session highs after slow start
The S&P 500 is trading at session highs with a 0.6% gain amid leadership from the value/cyclical stocks. The Dow Jones Industrial Average (+0.6%) and Russell 2000 (+0.7%) are keeping pace with the benchmark index, while the Nasdaq Composite (+0.3%) is underperforming with a 0.3% gain.  The outperformance of value stocks is being attributed to positive momentum in energy prices; a huge upside surprise in the Empire State Manufacturing Survey for September, which checked in at 34.3 (Briefing.com consensus 18.6); and in-line industrial production data for August (unlike in China, where it missed expectations). Presently, the S&P 500 energy sector is outclassing everything else with a 3.0% gain amid bullish EIA crude inventory data. WTI crude futures are currently up 3.0% to $72.54/bbl. The financials (+1.0%) and industrials (+1.0%) sectors follow suit with 1% gains, while the consumer discretionary sector (-0.1%) is the lone holdout. The market has recently pushed to session highs on no specific news, but there could be an element of trying to play a rebound rally given the S&P 500 has respected its 50-day moving average (4431) today and yesterday. This key technical level has been a strong measure of support for the market since last year. Microsoft (MSFT 303.45, +3.66, +1.2%) is rising alongside the value stocks after approving a new $60 billion share repurchase program and raising its dividend by 11%. Goldman Sachs (GS 399.85, -3.84, -1.0%) bucks the trend after agreeing to acquire GreenSky (GSKY 11.83, +4.05, +52.2%) for $12.11 per share, or about $2.2 billion, in stock. Separately, Chevron (CVX 97.60, +1.41, +1.5%) was downgraded to Neutral from Overweight at JPMorgan, but its price target of $111 per share still allows for some upside. The 10-yr yield is currently up three basis points to 1.31% after touching 1.26% right before the industrial production report was released in the morning. The U.S. Dollar Index is down 0.1% to 92.55. Reviewing today's economic data:Total industrial production increased 0.4% in August (Briefing.com consensus 0.4%) following a downwardly revised 0.8% increase in July (from 0.9%). The capacity utilization rate increased to 76.4% (Briefing.com consensus 76.3%) from an upwardly revised 76.2% in July (from 76.1%).The key takeaway from the report is that it showed industrial production finally eclipsed its pre-pandemic level; and it also showed industrial production was even stronger in August than meets the eye, registering a gain despite the impact of Hurricane Ida and ongoing semiconductor shortages.The Empire State Manufacturing Survey increased to 34.3 in September (Briefing.com consensus 18.6) from 18.3 in August.Import prices decreased 0.3% in August after increasing a revised 0.4% (from 0.3%) in July. Excluding oil, import prices decreased 0.1% after increasing a revised 0.1% (from 0.0%) in July.
Export prices rose 0.4% after increasing a revised 1.1% (from 1.3%) in July. Excluding agriculture, export prices rose 0.2% after increasing a revised 1.4% (from 1.6%) in July.The weekly MBA Mortgage Applications Index increased 0.3% following a 1.9% decline in the prior week.