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Market Snapshot

https://www.briefing.com/stock-market-update

Dow 34681.79 +104.42 (0.30%)
Nasdaq 14665.07 +1.42 (0.01%)
SP 500 4358.13 +14.59 (0.34%)
10-yr Note +27/32 1.300
NYSE Adv 1542 Dec 1662 Vol 887.0 mln
Nasdaq Adv 1439 Dec 2726 Vol 4.5 bln

Industry Watch
Strong: Consumer Staples, Industrials, Materials, Information Technology
Weak: Energy, Financials

Moving the Market

-- S&P 500 and Nasdaq set all-time highs with modest gains

-- 10-yr yield trades around 1.30% amid reported growth concerns, peak inflation expectations, and short-covering activity

-- Value/cyclical stocks close performance gap between growth stocks

-- FOMC Minutes from June meeting reveal no major surprises

The big four lift S&P 500 to record highs
07-Jul-21 16:20 ET
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

Crude futures settle in negative territory
07-Jul-21 15:30 ET
Dow +100.04 at 34677.41, Nasdaq +2.53 at 14666.18, S&P +15.31 at 4358.85

[BRIEFING.COM] The S&P 500 is up 0.4% and is on track to close at a record high.

One last look at the sector performances shows materials (+1.0%) and industrials (+1.0%) leading the advance with 1% gains despite reported growth concerns, while the energy (-1.2%) and communication services (-0.1%) sectors trade lower.

WTI crude futures settled lower by 1.7%, or $1.24, to $72.18/bbl. This was the second straight day that crude futures gave up an intraday gain.

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 in order to invest in diversifying its economy before the threat of green energy alternatives hinders prices.