DAILY MARKET RECAP – July 24, 2017
• S&P 500 down 0.11% to $2,469.91
• DJIA down 0.31% to $21,513.17
• U.S. 10-yr up 2 bp to 2.26%
• WTI Oil up 1.38% to $46.40
U.S. equities traded mostly lower as investors awaited the release of tech earnings, a slew of economic data, and an anticipated Senate vote on Obamacare repeal tomorrow. Alphabet (GOOGL) reported after the close of trading today, while Facebook (FB) and Amazon (AMZN) will release their reports on Wednesday and Thursday, respectively. The purpose of tomorrow’s Senate vote is to begin debate on repealing Obamacare outright, but Senate Republicans have indicated that they would consider even a narrow loss a “win” for the beleaguered push for healthcare reform.
The 10-year Treasury yield gained back two basis points. Oil prices settled 1.38% higher after Saudi officials pledged to place caps on the country’s crude exports.
• PMI Composite Flash – 54.2
• Existing Home Sales – 5.520M
Strength in orders, employment, and output contributed to a relatively strong PMI composite for the month of July. The report’s manufacturing and services components were especially strong, but price data were weaker as wages rose while fuel bills and selling prices remained soft.
Although year-over-year existing home sales remain positive, June’s month-over-month reading showed a decline of 1.8% to a lower-than-expected annualized rate of 5.520 million sales. Prices remain high: the median price currently stands at $263,800, which represents a year-over-year increase of 6.5%. These high prices are adversely impacting first-time home buyers. These buyers comprised 35% of sales in 2016, 33% in May, and 32% in June, so they represent a declining share of housing market consumers. The report also indicates that low wages continue to hold down sales and offset more favorable mortgage rates.
One of the day’s most significant movers was WebMD (WBMD), a prominent publisher of news and information about all things related to health and medicine. According to reports, private-equity firm KKR is buying the publisher for $2.8 billion, or $66.50 per share in cash. WebMD attempted to solicit bids over a five-month span, so the buyout is a big win for the company. Shares of WebMD were up by 19.77% at the close of trading.
Major anticipated catalysts: S&P Corelogic Case-Shiller HPI – Expected 0.3% v. 0.3% Prior; Consumer Confidence – Expected 117.0 v. 118.9 Prior
All estimates come from Econoday’s survey of economists/analysts. Earnings per share estimates are from Factset, are set against year ago results, and represent adjusted earnings.