U.S. equities finished near the unchanged line on Wednesday as investors were swayed by the release of the latest Federal Reserve meeting minutes, a poor job openings report and the start of the third-quarter earnings reporting season.
In the end, the Dow Jones Industrial Average gained 0.1%, the S&P 500 Index gained 0.1%, the Nasdaq Composite lost 0.2% and the Russell 2000 lost a fraction.
Treasury bonds were mostly weaker, continuing the recent increase in long-term government bond yields — which in turn, is pressuring a wide swatch of yield-sensitive assets such as dividend stocks, corporate bonds and more. The dollar was stronger, pushing gold down 0.2%. And crude oil was lower, losing 1.2%.
There was some help to risk sentiment overnight thanks to the diminishment of “hard Brexit” fears after the United Kingdom’s Prime Minister May agreed to allow Parliament to vote on her Brexit plans before she begins formal exit talks. Bloomberg reported that the move allows lawmakers in favor of maintaining a closer relationship to the European Union.
Defensive utility and telecom stocks rebounded from some recent weakness to gain 1% and 0.6% respectively. Healthcare and energy were the laggards down 0.6%, and 0.4% respectively. Advanced Micro Devices, Inc. (NASDAQ:AMD) gained 1.9% after enjoying an upgrade from analysts at Credit Suisse on conservative guidance and the upcoming launch of its Zen lineup.
On the economic front, the Job Openings and Labor Turnover Survey fell to an eight-month low in August to 5.44 million, down from 5.83 million in July and below the 5.80 million analysts were expecting. The opening rate fell to 3.6% from 3.9% in July. Professional and business services had the largest decrease at 223,000.
Finally, turning to the Fed, the minutes from the September policy meeting revealed divisions within the committee as “reasonable argument” could be made for both an immediate hike or a delay. The majority, however, continues to look at evidence of persistent slack in the labor market and tepid inflation as justifying a wait-and-see approach.
Futures market odds of a December rate hike remained near 64%, suggesting traders didn’t glean much from the day’s news.
The risk and uncertainty is still palpable out there, however, after Tuesday’s scary looking technical breakdown in large-cap stocks. The VelocityShares 2x VIX (NASDAQ:TVIX) gained another 0.5% for Edge subscribers while the Oct $35 Short-Term VIX (NYSEARCA:VXX) calls recommended to Edge Pro subscribers are up 10%.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
