S&P 500 Pulls Back

| About: SPDR S&P (SPY)

Summary

Today is the start of the Democratic national convention and with that there has a great amount of discussion around the recent hack of the e-mails from the DNC.

The S&P 500 or the SPDR S&P 500 (SPY) is down today about 60bps as of noon, or 12 points to 2162.

Today we will focus on the Consumer Discretionary Select Sector SPDR (XLY).

Top News

Today is the start of the Democratic National Convention and with that, there has been an enormous amount of discussion around the recent hack of the e-mails from the Democratic party. Of course, this resulted in the announcement that Debbie Wasserman-Schultz would be resigning after the convention. The talk has been about Russian involvement in the hack. In my opinion, it doesn't matter who did the hack; it is that the damage was done. The attention is being drawn away from the convention and to the hack. It will interesting to see how all this plays out come November.

Equity Market

The S&P 500 or the SPDR S&P 500 (NYSEARCA:SPY) is down today about 60bps as of noon, or 12 points to 2162. I was writing for the past week that I was expecting a turn around in the market and today we have one. My expectation was for a test of about the 2120 level, and those expectations have not changed. click to enlarge) Click to enlarge

Sector Spotlight

Today we will focus on the Consumer Discretionary Select Sector SPDR (NYSEARCA:XLY). It is the only SPDR up today, and it is fractional, by 7 cents to $81.66. This sector has performed extremely well post Brexit and for the most part, has led the charge higher for the overall markets. We can see from the chart that when the XLY leveled off so did the broader markets.

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Currencies

The currency market is flat as can be today, the British Pound, Japanese Yen and the Euro are all trading within of a few bps of being plus or minus. We will leave it at that for today.

Commodities

WTI is trading down over a dollar to $43.15. My thought at the beginning of the month was that WTI was going to make a move towards $50 by month end. Clearly, I was wrong. It seems more likely that we will be fighting to stay above $40.

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Yield

Ten-year yields are also relatively tame today with the rate down 2bps to 1.56%. I think things will remain that way until we get pass the BOJ and FOMC meetings this week.

Election 2016

As mentioned above the DNC national convention kicks off today. What I found surprising at first was that Michael Bloomberg would be supporting Hillary Clinton. Then I remember that before he was the Republican of mayor of New York City he had actually been a Democratic. He became a Republican when he ran for Mayor in 2001. Only to the switch to becoming an independent in the 2009 Mayor Race. So he tends to switch around, so surprised by this endorsement I am not. The latest Real Clear Politics Poll now has Trump in the lead over Clinton 44.1 vs. 43.9

Have a great rest of the day!

Mike

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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