Darren Sinden from educational provider Trade Uni discusses the latest market moves.
The S&P 500 finished flat on the day, while the Dow Jones and Nasdaq 100 were up but by only 0.1% each. It was a similar story in Europe, where major equity indices finished the day just a shade on either side of the gain line.
At a sector level, energy stocks took the lead, with the S&P 500 sector adding 1.12% on the day. All the sector’s constituents were trading above their 20-day moving averages as of last night's close, though the relative strength index reading for the sector is not yet overbought. The Euro Stoxx 50 energy sector was up 1.5% in the session, led higher by the likes of Equinor, which rallied by 3.8% yesterday, taking its weekly gain to 7.4%.
Consumer staples was the worst-performing sector in the US, down by 0.78%, closely followed by consumer discretionary stocks which fell by a similar amount. Sentiment won’t have been helped by news from Nike, which closed down 6.77% to $83.10, though the low on the day was $81.77. The company withdrew its full-year guidance and cancelled an investor meeting in the wake of falling sales, just days after it announced a change of CEO. It's not clear if this was an effort to clear the decks ahead of the new CEO taking up his appointment or an admission of how bad things at the company are. Despite a rally over the last three months, Nike’s stock price is down by more than 23% year-to-date.
Nike wasn't the biggest blue-chip faller on the day in the US, however. That distinction fell to health insurer Humana which slumped by 11.79%. This was the second day of significant losses in the stock (it fell more than 11% on Tuesday) which is struggling with changes in the US healthcare insurance system. Humana is down by 46.16% year-to-date, whilst rivals like Cigna and UnitedHealth are in positive territory over this time frame. The biggest gainer in the S&P 500 yesterday was a consumer discretionary stock; casino operator Caesars Entertainment was up by 5.27%. To some extent, the stock appeared to be playing catch with sector peers such as Wynn Resorts and Las Vegas Sands, which are up 21.29% and 15.62% respectively over the last five days.
In Europe, Gucci owner Kering and Spanish generator Iberdrola were the biggest fallers in the Euro Stoxx 50, dropping by 2.4% and 1.9% respectively. Utilities across Europe had a poor session, with Red Eléctrica, E.ON, Enel and Enagás also down on the day. EDP was the only sector gainer of note yesterday, rallying by 1%. The contrast between the performance of the European sector and its US counterpart is one of the most pronounced in the market. The European sector is up by 2.8% year-to-date but the US utilities sector is up by 28.54% this year.
Crude oil is now up by more than 5% over the last five days and is trading up again in Europe this morning. Gold and silver are down on the day, while copper is largely flat. Iron ore, which is seen as a barometer for China's economy, is now up by almost 18.5% over the last week, while nickel has added 8.82% in that time. The dollar index has picked up to trade at 101.88 this morning. GBP/USD has fallen by 0.8% following dovish comments from the Bank of England governor Andrew Bailey, which contrasted with his previously hawkish tone on UK interest rates
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