$SPY (+0,01%)

S&P 500 falls for second week in a row, energy leads broad-based decline

The Standard & Poor's 500 Index fell 2%, dropping for the second week in a row, triggered by concerns about the Federal Reserve's future monetary policy and a possible government shutdown.

The market index closed the week at 5,930.85 points and is now down 1.7% in December, but remains well in positive territory for 2024 with a year-to-date increase of 24%.

On Wednesday, the Federal Open Market Committee (FOMC) cut the central bank's key interest rate by 25 basis points, as expected. However, the monetary policy committee signaled fewer interest rate cuts in the coming years than previously assumed and at the same time raised its inflation forecasts. Inflation, as measured by personal consumption expenditure (PCE), is now estimated at 2.4% for this year (previously 2.3%) and 2.5% for 2025 (previously 2.1%). These developments fueled concerns among investors and weighed on share prices.

In addition to these concerns, a possible government shutdown loomed after a bipartisan agreement on funding until mid-March failed last week and a budget bill proposed by Republicans in the House of Representatives for three months of funding was not passed late on Thursday.

All sectors of the S&P 500 posted weekly losses, led by a 5.6% decline in the energy sector, followed by a 5% drop in the real estate sector and a 4.2% decline in the materials sector. Other sectors with declines of at least 2% were industrials, consumer discretionary and defensives, healthcare, communications services and financials.

In the energy sector, the shares of Phillips 66 (PSX) recorded the biggest loss, falling 10% for the week. The company announced the sale of DCP GCX Pipeline, which holds a 25% non-operating interest in the Gulf Coast Express Pipeline, to an affiliate of ArcLight Capital Partners for pre-tax proceeds of $865 million in cash, subject to adjustments.

In the real estate sector, the shares of VICI Properties (VICI) fell by 7.5 % after KeyBanc downgraded the rating from "overweight" to "sector weight". In addition, VICI Properties announced that its subsidiary VICI Properties LP completed a public offering of USD 750 million of unsecured senior notes with an interest rate of 5.125% and a maturity date of 2031.

In the materials sector Nucor (NUE) and Steel Dynamics (STLD) were among the losers as both steel producers announced fourth-quarter earnings below analysts' expectations due to lower prices. Shares of Nucor fell 6.9%, while Steel Dynamics lost 5.5%.

In the coming week, the markets will close three hours early on Tuesday, December 24, and remain closed on Wednesday for Christmas. Due to the holiday-related closures, there will be few economic data releases, including December consumer confidence on Monday, November durable goods orders and new home sales on Tuesday, weekly initial jobless claims on Thursday and November merchandise trade balance on Friday.

Sector performance & weekly review S&P500 | $SPY (+0,01%)

S&P 500 ends weekly winning streak as materials and utilities weigh

The S&P 500 index fell 0.6%, its first weekly decline since mid-November. The market index ended Friday's session at 6,051.09 points. This broke a three-week winning streak, but the S&P 500 is still well up for 2024 with a year-to-date gain of 27%.

This week, data showed that the US Consumer Price Index (CPI) rose by 0.3% in November after increasing by 0.2% in each of the previous four months. Year-on-year inflation accelerated to 2.7%, compared with 2.6% in October. Both figures were in line with the forecasts of a survey compiled by Bloomberg.

Producer prices for November, however, rose more than expected as wholesale costs for goods increased due to a rise in food prices. The US Producer Price Index (PPI) rose by a seasonally adjusted 0.4% month-on-month in November, compared to the consensus estimate of a 0.2% increase. Year-on-year, producer prices rose by 3%, exceeding the expected 2.6%.

Investors are watching the inflation figures closely as the Federal Open Market Committee (FOMC) of the US Federal Reserve will make its final interest rate decision of the year next week.

The materials sector posted the largest percentage decline among the S&P 500 sectors, with a weekly drop of 2.9%, followed by a 2.7% decline in the utilities sector and a 2.4% loss in the real estate sector.

In the materials sector, shares of Nucor (NUE) were the hardest hit, falling 12%. UBS downgraded the stock from "buy" to "neutral" and stated that there is "limited upside potential" for the stock in the short term. The company also lowered its price target for Nucor shares from USD 171 to USD 156.

In the utilities sector, Pinnacle West Capital (PNW) shares fell 4.4% after the company announced that Pinnacle West and Arizona Public Service Chairman and CEO Jeff Guldner will step down effective March 31. Ted Geisler will become Chairman, President and CEO of Pinnacle West and Arizona Public Service effective April 1.

Nevertheless, communication services increased by 2.4 %, while the non-cyclical consumer goods segment grew by 1.4 %.

In the communications services sector, shares of Warner Bros. Discovery (WBD) rose 13% for the week after the company announced plans for a restructuring. Warner Bros. Discovery plans to introduce a new corporate structure that will split its operations into two divisions: "Global Linear Networks", which will focus on profitability and cash flow, and "Streaming & Studios", which will target growth through streaming and entertainment.

The upcoming FOMC meeting will take center stage next week. Important economic reports are also expected, including the second revision of third quarter gross domestic product (GDP), US retail sales for November and data on housing starts and building permits.

S&P500 sector performance and weekly review $SPY (+0,01%)

S&P 500 starts December with a weekly rise to new highs, led by consumer discretionary

The S&P 500 index rose 1% this week and reached new highs, driven by gains in the sectors consumer discretionary, communication services and technology.

However, the other eight sectors of the S&P 500 recorded weekly losses. Nevertheless, the market index closed Friday's session with a new closing record of 6,090.27 points . Over the course of the day, the index even reached a new intraday high of 6,099.97 points and has recorded an increase of almost 28 %.

Drivers of the increase

- Consumer discretionary (+5.9%): This sector recorded the strongest rise of the week, mainly thanks to retailers Lululemon Athletica (+25%) and Ulta Beauty (+11%)which both reported better-than-expected quarterly results and raised their full-year forecasts.

- Communication Services (+4.1%): Meta Platforms (META) increased by 8,6 % after a US federal appeals court upheld a change in the law requiring TikTok to divest its US operations by January 19. January 19 January 19. Meta could benefit from this as Facebook and Instagram compete with TikTok for users and advertising revenue.

- Technology (+3.3%): Super Micro Computer (SMCI) increased by 35 %after it was announced that the company had been acquired in connection with Elon Musk's xAI project "Colossus" to provide hardware for a new data center project in Memphis, Tennessee.

Loser of the week

- Energy sector (-4.5 %)The decline is due to falling crude oil futures after OPEC+ decided to extend voluntary production cuts while the market is expected to be oversupplied. Losers included Texas Pacific Land (-16 %) and Halliburton (-9.7 %).

- Utilities (-3.8 %), Materials (-3 %) and real estate, industry, Healthcare, finance and consumer goods for daily needs also recorded losses.

Labor market data

On Friday, US economic data showed that the nonfarm payrolls rose by 227,000 jobs in November (expected: 220,000). The unemployment rate rose to 4.2% (previously 4.1%), while the labor force participation rate fell to 62.5 (previously 62.6 %).

Outlook for next week

Important economic data is due in the coming week, including the Consumer Price Index (CPI) for November on Wednesday and the Producer Price Index (PPI) for November on Thursday. In addition, quarterly reports from companies such as Oracle (ORCL), Adobe (ADBE), Broadcom (AVGO) and Costco (COST) expected.

Sector performance & weekly review S&P500 | $SPY (+0,01%)

S&P 500 posts weekly rise to new record high and ends November with strongest monthly gain of the year

The Standard & Poor's 500 Index rose 1.1% in this holiday-shortened week, ending November on a strong note. The market benchmark achieved its largest monthly gain of the year.

The S&P 500 closed the shortened trading session on Friday at 6,032.38, the highest close in its history, a day after closing for the Thanksgiving holiday. Friday also saw a new daily high of 6,044.17.

Month-on-month, the S&P posted a gain of 5.7%, the biggest monthly increase since an 8.9% jump in November last year. The index is up 26% so far in 2024, with one month remaining.

Economic data this week showed that U.S. real gross domestic product (GDP) grew at an annualized rate of 2.8% in the third quarter, in line with both the previous estimate and the consensus compiled by Bloomberg. However, the measure of personal consumption expenditure was revised downwards from a previously forecast 3.7% to growth of 3.5%.

All but one sector of the S&P 500 rose this week. The consumer discretionary sector posted the largest percentage gain with a 2.3% increase, followed by a 2.1% increase in the healthcare sector and a 2% increase in the real estate sector.

Among the gainers in the consumer discretionary sector was a 14% rise in shares of Ulta Beauty (ULTA) as the cosmetics retailer prepares to release its third quarter results. Ahead of the announcement, Citigroup raised its price target on the stock from USD 345 to USD 390.

In the healthcare sector, Eli Lilly (LLY) shares rose 6.3% after its diagnostic drug flortaucipir (Tauvid) received approval from the UK's medicines regulator to test for Alzheimer's disease in adults with memory problems.

In the real estate sector, Equinix (EQIX) shares rose 4.8% after the company announced it would issue an additional 1.15 billion euros ($1.21 billion) worth of green bonds. Truist Securities raised its price target for the stock from USD 935 to USD 1,090.

The energy sector was the only loser of the week, falling by 2%. Crude oil futures also fell as the conflict between Israel and Hezbollah eased and concerns over supply disruptions eased.

Among the losers in the energy sector were shares of Diamondback Energy (FANG), which fell 4.2%, and Devon Energy (DVN), down 3.8%.

Next week, the market will kick off December with reports on construction spending in October and manufacturing data in November. However, the main focus will be on the November labor market data, which will be released later in the week.

US MACRO DATEN | $SPY (+0,01%)

🇺🇸 Q3 GDP [2nd Est.] +2.8% (Est. +2.8%, 1st Est. +2.8%, Q2 +3.0%)

Initial Jobless Claims: 213K (Est. 215K, Prior 213K)

Continuing Jobless Claims: 1.907M (Est. 1.892M, Prior 1.908M)

Durable Goods Orders (MoM - Oct): +0.2% (Est. +0.5%, Prior -0.7%)

Wholesale Inventories (MoM Adv - Oct): +0.2% (Est. +0.1%, Prior -0.2%)

Personal Consumption (Q3 - 2nd Est.): +3.5% (Est. +3.7%)

GDP Price Index: +1.9% (Est. +1.8%)

Core PCE Price Index (Q3): +2.1% (Est. +2.2%)

Last week's S&P500 sector performance | $SPY (+0,01%)

S&P 500 posts broad weekly gain, communication services slow down the rise

The S&P 500 index rose 1.7% this week, with gains in all sectors except communications services. The market index ended Friday's session at 5,969.34 points, up 4.6% for November and 25% for the year to date.

Existing home sales in the US rose more than expected in October, posting their first annual gain in more than three years, data from the National Association of Realtors showed.

US private sector output reached its highest level since April 2022, according to S&P Global's preliminary Purchasing Managers' Index, despite a continued contraction in manufacturing. The outlook for the coming year rose to a 2.5-year high.

Other economic data was mixed. The manufacturing index for the US Mid-Atlantic region turned negative in November, while the contraction in the Midwest improved unexpectedly, according to separate surveys by the Federal Reserve Banks of Philadelphia and Kansas City.

Consumer goods had the highest percentage gain of the week with a 3.1% increase, followed by a 3% gain in the materials sector and gains of 2.6% each in real estate and utilities.

Among the gainers in the consumer discretionary sector were shares of Walmart (WMT), which jumped 7.4% after the retailer raised its full-year guidance and reported better-than-expected results for the fiscal third quarter - helped by gains across all segments.

In the materials sector, shares of Corteva (CTVA) rose 11% after the company unveiled a new financial framework through 2027 at an investor day. This includes USD 1 billion in additional net sales from growth platforms, around USD 1 billion in cost reductions and productivity gains and around USD 4.5 billion in returns for shareholders. Corteva also announced a share buyback program of USD 3 billion.

Communication services, the only sector with losses this week, fell by 0.3%, although only three of its components fell - two of them from the same company: Alphabet, the parent company of Google (GOOGL, GOOG). Alphabet's Class A shares fell 4.4% and Class C shares fell 4.2% after the US Department of Justice and a group of states demanded in a report that Google sell its Chrome browser and take other drastic measures to end its monopoly on internet searches.

Important economic data is due next week, including consumer confidence for November and new home sales in October on Tuesday. Numerous reports follow on Wednesday, including October consumer spending, pending home sales and the first revision of third quarter gross domestic product. The market will be closed on Thursday for the Thanksgiving holiday.

Sector Performance & Week in Review | $SPY (+0,01%)

S&P 500 posts weekly loss as hopes for December rate cut fade on robust retail sales and Fed comments

The Standard & Poor's 500 Index fell 2.1% this week as better-than-expected retail sales and comments from Federal Reserve Chairman Jerome Powell dampened expectations of a December rate cut.

The market benchmark closed Friday at 5,870.62 points. Despite the weekly loss, the index is up 2.9% since the beginning of the month thanks to a rally following the US presidential elections and a 25 basis point rate cut by the Fed. The increase for the year 2024 is 23 %.

Data published on Friday showed that retail sales in the US rose more strongly than expected in October, supported by an increase in car purchases. At the same time, the figure for September was revised upwards. The report further lowered expectations for a rate cut, especially after Powell's statement that "the economy is not sending signals that should lead us to cut rates quickly".

Sector Performance:

Healthcare stocks led the broad decline with a 5.5% drop, followed by a 3.3% decline in materials and a 3.2% drop in technology. Industrials, real estate and communication services also recorded losses of over 2% each.

The healthcare sector was weighed down by concerns over President-elect Donald Trump's nomination of Robert F. Kennedy Jr. as Secretary of Health and Human Services, as Kennedy is a known critic of vaccination. Shares of vaccine maker Moderna (MRNA) posted the biggest percentage drop in the sector, falling 21%.

In the materials sector, shares of Celanese (CE) fell 13% after analysts from BMO Capital and UBS downgraded the stock due to weaker-than-expected third-quarter results and fourth-quarter guidance.

In the technology sector, shares of Super Micro Computer (SMCI) plunged 24% after the company announced that it would not be able to file its quarterly report on time due to an internal review process.

Only two sectors posted weekly gains: Financials rose 1.4%, while energy gained 0.6%.

Outlook:

Several reports on the housing market are expected in the coming week, including the November builder sentiment barometer on Monday, housing starts and permits for October on Tuesday and existing home sales on Thursday. The final November consumer confidence reading will be released on Friday.