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End of Day Brief - Wednesday July 7 - All markets up slightly

S&P 500 and Nasdaq set intraday and closing record highs (again)

Dow34681.79+104.42(0.30%)
Nasdaq14665.07+1.42(0.01%)
SP 5004358.13+14.59(0.34%)
10-yr Note +27/321.300
NYSEAdv 1542 Dec 1662 Vol 887.0 mln
NasdaqAdv 1439 Dec 2726 Vol 4.5 bln

Industry Watch
Strong: Industrials, Materials, Health Care, Consumer Staples
Weak: Energy, Communication Services, Consumer Discretionary

Moving the Market

-- S&P 500 and Nasdaq set intraday and closing record highs (again)

-- 10-yr yield briefly fell below 1.30% amid reported growth concerns, peak inflation expectations, short-covering activity, and technical factors

-- Apple (APPL) gains nearly 2.0%

-- FOMC Minutes from June meeting reveal no major surprises, leaving Fed in wait-and-see mode with no clear hawkish bias


S&P 500 new highs again

Dow +104.42 at 34681.79, Nasdaq +1.42 at 14665.07, S&P +14.59 at 4358.13

[BRIEFING.COM] The S&P 500 gained 0.3% on Wednesday, setting another pair of intraday and closing record highs in a mixed session. The Nasdaq Composite (+0.01%) eked out a record close by the slimmest of margins after opening solidly higher in record territory. The Dow Jones Industrial Average gained 0.3%, while the Russell 2000 fell 1.0%.

Apple ($AAPL 144.57, +2.55, +1.8%), Microsoft ($MSFT 279.93, +2.27, +0.8%), Amazon.com ($AMZN 3696.58, +20.84, +0.6%), and Alphabet ($GOOG 2601.55, +6.13, +0.2%) which represent about 20% of the S&P 500's market capitalization, made a big difference in today's action alongside the S&P 500 industrials (+1.0%) and materials (+1.0%) sectors.

One of the bigger talking points, though, was the 10-yr yield falling below 1.30% intraday before settling the session at 1.32%, or five basis points below yesterday's settlement. The move was attributed to technical factors, short-covering activity, peak growth concerns, and expectations for inflation rates to moderate.

Interestingly, not all growth stocks keyed off the lower rates, e.g., Facebook ($FB 350.49, -2.29, -0.7%), Tesla ($TSLA 644.65, -14.93, -2.3%), and NVIDIA (NVDA 814.87, -13.07, -1.6%), and cyclical stocks like materials and industrials still rose despite the reported growth concerns.

The energy sector (-1.7%), meanwhile, was a notable weak spot, falling 1.7% amid a turnaround in oil prices ($72.18/BBL, -1.24, -1.7%). The communication services (-0.1%) and consumer discretionary (-0.01%) sectors closed fractionally lower without support from FB and TSLA.

Regarding oil, the EIA said it expects prices to remain close to current levels through the second half of the year and then decline in 2022 as production outpaces demand. The Wall Street Journal suggested the United Arab Emirates wants to produce more oil right now so that it can invest in diversifying its economy before green energy alternatives weigh on demand.

Airline stocks and bank stocks were other pockets of weakness given the curve-flattening activity in the Treasury market (2s-10s spread narrowed by six bps) and concerns about reduced travel overseas because of the Delta variant. The U.S. Global Jets ETF (JETS 23.67, -0.43) declined 1.8%. The SPDR S&P Bank ETF (KBE 49.72, -0.22) declined 0.4%.

Separately, the FOMC Minutes from the June meeting didn't reveal any major surprises, leaving the Fed in a wait-and-see mode with no clear hawkish bias. This was good enough for the market, which didn't overly react to the minutes when they were released in the afternoon. The S&P 500 gained about six points between its release and the close.

The 2-yr yield increased one basis point to 0.22%. The U.S. Dollar Index increased 0.2% to 92.71.

Reviewing Wednesday's economic data:

  • Job openings increased to 9.209 million in May from a revised 9.193 million in April (from 9.286 million).
  • The weekly MBA Mortgage Applications Index decreased 1.8% following a 6.9% decline in the prior week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report and Consumer Credit for May on Thursday.

  • S&P 500 +16.0% YTD
  • Russell 2000 +14.1% YTD
  • Nasdaq Composite +13.8% YTD
  • Dow Jones Industrial Average +13.3% YTD

Source: (Briefing.com)

Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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