The Week In Review

12/7/18

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  The S&P 500 is down 0.6%, as uncertainty surrounding trade, growth prospects, the path of interest rates, and geopolitics has diminished investor confidence and fueled risk reduction efforts that are hitting stocks. The benchmark index has been able to recoup a good chunk of its intraday losses, though, after trading down as much as 1.9% today. An intraday rebound by Apple (AAPL 169.23, +0.76, +0.4%) from an oversold posture has aided in the recovery try.

  The Dow Jones Industrial Average is down 0.6% after being down as much as 2.1%, and the Nasdaq Composite has turned positive with a gain of 0.3% after being down as much as 1.3%.

  An early rebound effort quickly rolled over, as the lack of buy-the-dip sentiment raised questions about how much further the market could fall in this down leg, which in turn is keeping cash on the sidelines.

  The major indices fell to new session lows shortly after UK Prime Minster May announced she will be delaying the vote in Parliament originally scheduled for Tuesday on the UK-EU Brexit plan.

  The weight on the market came from the realization that Prime Minster May's announcement crystallized the uncertainty surrounding the Brexit matter, which left it akin to pouring fuel on a fire of uncertainty on a host of other issues that have been weighing on investor sentiment and stock prices.  Still, it wasn't exactly surprising news since it had been speculated before the open that Prime Minster May was likely going to announce today a delay in the vote.  At the same time, it had been previously reported that the vote on the UK-EU Brexit plan would have likely been defeated had it been held on Tuesday.

  Within the S&P sectors, the cyclical energy (-2.3%) and financial (-1.8%) groups leading the retreat. These poor performances have added to the concerns about growth prospects.

  Energy stocks have trended lower with oil prices. WTI crude is down 1.5% to $51.80/bbl. Despite the decrease in oil prices, transport issues have also underperformed. The Dow Jones Transportation Average is down 1.4%.

  Conversely, the communication services (+0.3%) and information technology (+0.7%) sectors have kept losses in-check. 

  Chip stocks have provided some support for the tech space with the Philadelphia Semiconductor Index up 1.0%. In related news, Qualcomm (QCOM 57.49, +1.50, +2.7%) has outperformed after a court in China granted Qualcomm an injunction against Apple (AAPL 169.23, +0.76, +0.4%), banning the import and sale of most iPhones in China due to a Qualcomm software patent.

  Apple was quick to point out that its phones are in fact still for sale in China. Note, the decision is separate from lawsuits regarding Qualcomm's modem chip patents and does not appear related to U.S-China trade tensions.

  Separately, U.S. Treasuries are near their unchanged marks, with the benchmark 10-yr yield up one basis point to 2.86%.

  Reviewing today's sole economic report, the JOLTS - Job Openings and Labor Turnover Survey for October showed that job openings increased to 7.079 million from a revised 6.960 million (from 7.009 million) in September.