There was no direction from today’s Fedspeak, while another improvement in May job openings and a slip in June small business sentiment were also relegated to the backburner. A similar dynamic seemed to play out with regards to the latest geopolitical headlines in the Middle East. Momentum stocks led the move lower today, while the defensive leaning Utilities sector outperformed with the strength in Treasuries. Precious metals stocks also fared well, though not all of the price action fit into the risk-off theme.\r\no More disappointing takeaways from Europe:\r\n§ Concerns about the quality of the nascent recovery in Europe have been mentioned as a recent overhang on equity market sentiment. The focus remained on the growth slowdown in Germany today as German exports fell 1.1% m/m in May, while imports dropped 3.4%, the biggest contraction since November 2012. The larger-than-expected declines in both exports and imports followed an unexpected 1.8% contraction in May industrial production that came on the back of a 0.3% deterioration in April. In addition, it was reported last week that manufacturing orders fell 1.7% in May, worse than consensus expectations for a 1.1% decline, while unemployment rose for a second straight month. The recent string of higher-profile profit warnings also continued today with updates from Air France and Phillips, as did worries about the headwinds from a stronger euro.\r\no Earnings season angst:\r\n§ With no clear catalyst for the post-NFP sluggishness in stocks, some of the blame has been attributed to angst going into Q2 earnings season. This seems to play into the notion that the bar has been set higher with the widely discussed weather reprieve, more upbeat corporate commentary and improvement in guidance and estimate and revision trends.\r\no Momentum leads market lower:\r\n§ Momentum plays were the notable laggards today. Despite some upbeat earnings previews this week, biotech extended its recent selloff with IBB (2.1%). High-multiple software weighed on tech with DATA (10.4%), FEYE (8.6%) and WDAY (6.3%). Internet and social media stocks were also hit hard with QNET (3.1%) and SOCL (4.2%). Some of the big decliners included P (7.3%), TWTR (7%) and LNKD (6.3%). Even GRPN (2.6%), which caught an upgrade at B. Riley, underperformed. Elsewhere earnings and regulatory/legal concerns continued to weigh on the banking group with BKX (1.1%). Coal stocks sold off sharply with Morgan Stanley taking down numbers on met coal and providing a liquidity and operational update from WLT (8.6%). The bulk of the consumer growth plays lagged the tape, including retail with the S&P Retail Index (1.3%).
