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End of Day Brief - Thursday July 1 - Markets up, S&P new high

SP 5004319.94+22.44(0.52%)
10-yr Note 0/321.470
NYSEAdv 2071 Dec 1139 Vol 825.6 mln
NasdaqAdv 2132 Dec 1843 Vol 4.3 bln

Industry Watch

Strong: Energy, Utilities, Communication Services, Health Care
Weak: Consumer Staples, Information Technology

Moving the Market

-- S&P 500 sets intraday and closing record highs in relatively broad-based advance

-- Energy stocks jumped ahead as crude prices topped $75/BBL on speculation for smaller-than-expected OPEC+ supply increase

-- Manufacturing activity for June expanded for 13th straight month, weekly initial claims declined to post-pandemic low

-- Value stocks outperformed

S&P 500 sets new high

Dow +131.02 at 34633.53, Nasdaq +18.42 at 14522.38, S&P +22.44 at 4319.94

[BRIEFING.COM] The S&P 500 rose 0.5% on Thursday, kicking off the third quarter with another pair of intraday and closing record highs. The Russell 2000 pulled ahead with a 0.8% gain, the Dow Jones Industrial Average kept pace with a 0.4% gain, and the Nasdaq Composite underperformed with a 0.1% gain.

Value/cyclical stocks were at the forefront of a relatively broad-based advance, aided by encouraging manufacturing and initial claims data. Briefly, the June ISM Manufacturing Index checked in at 60.6% ( consensus 61.0%) for its 13th straight month above 50.0% (expansionary activity), and weekly initial claims declined to a post-pandemic low of 364,000 ( consensus 400,000).

Another tailwind, specifically for the energy stocks, was news that OPEC+ ministers reportedly reached a preliminary agreement to increase production by 400,000 bpd, starting in August and ending in December, which was less than expectations for a 500,000-bpd increase. A final agreement was reportedly delayed until tomorrow, though.

The S&P 500 energy sector climbed 1.7%, as WTI crude futures ($75.23/BBL, +1.73, +2.4%) topped $75 per barrel. The utilities sector (+1.1%) also gained more than 1.0%, while the consumer staples sector (-0.3%) was the only sector that closed lower.

The information technology sector (+0.1%) was held back by weakness in its semiconductor components following a disappointing earnings reaction in Micron ($MU 80.11, -4.87, -5.7%). The Philadelphia Semiconductor Index fell 1.5%. NVIDIA ($NVDA 808.48, +8.38, +1.1%) was a notable exception after its price target was raised to a Street-high $1000 from $750 at BMO Capital Markets.

Walgreens Boots Alliance ($WBA 48.71, -3.90, -7.4%), meanwhile, suffered the same fate as Micron despite both companies reporting better-than-expected earnings results. WBA was the biggest loser in the consumer staples sector with a 7% decline.

U.S. Treasuries ended the session mostly lower amid the positive bias in stocks and encouraging economic data, but there appeared to be a lack of conviction in front of the June employment report tomorrow. The 10-yr yield increased two basis points to 1.47% while the 2-yr yield was flat at 0.25%. The U.S. Dollar Index increased 0.1% to 92.55.

Reviewing Thursday's economic data:

  • The June ISM Manufacturing Index checked in at 60.6% ( consensus 61.0%), down from 61.2% in May. A number above 50.0% is indicative of expansion. June marked the 13th straight month of expansion for the manufacturing sector, albeit at a slightly slower pace than what was seen in May.
    • The key takeaway from the report is that it has validated the continuation of several trends: the manufacturing sector remains strong, inflation pressures are still prominent, and there is still difficulty in finding workers to meet the demand.
  • For the week ending June 26, initial claims decreased by 51,000 to 364,000 ( consensus 400,000), which is the lowest level since March 14, 2020. Continuing claims for the week ending June 19 increased by 56,000 to 3.469 million.
    • The key takeaway from the report is that it shouldn't be a surprise to see initial jobless claims falling given the huge number of job openings there are and the increased reopening activity that is demanding new hires.
  • Total construction spending decreased 0.3% m/m in May ( consensus +0.3%) following a downwardly revised 0.1% increase (from 0.2%) in April.
    • Total private construction declined 0.3% m/m while total public construction spending fell 0.2%.

Looking ahead, investors will receive the Employment Situation Report for June, the Trade Balance for May, and Factory Orders for May on Friday.

  • Russell 2000 +18.0% YTD
  • S&P 500 +15.0% YTD
  • Dow Jones Industrial Average +13.2% YTD
  • Nasdaq Composite +12.7% YTD

Source: (

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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