Hi Everyone,
The stock market finished mixed for the second straight day, with the Nasdaq extending its winning streak to five sessions despite the negative COVID-related headlines. The Dow was down 40 or 0.2%, to 26,080, the Nasdaq gained 32, or 0.3%, to 9,943, while the S&P 500 rose by 2, or 0.1%, to 3,115. Decliners outnumbered advancing issues by a 3-to-2 ratio on the NYSE, where volume remained light.
Traders said that today’s price action was in-line with the continued bullish trend in stocks, especially in light of the global headwinds. As one trader explained, “Stocks went nowhere today, and looking at the performance of the key overseas indices, that’s great news for bulls, and the historic reopening rally could soon resume.”
The number of new jobless claims fell for the eleventh week in a row, but this week, the improvement was much smaller even compared to last week’s upwardly revised figure. While the May jobs report was much better-than-expected, this month’s job-related indicators were far from stellar, which could mean that the pace of the recovery is slowing. That said, the bullish Philly Fed Index and CB Leading Index boosted bulls’ confidence, but Treasury yields still dropped for the second day in a row, as overseas equities underperformed.
Today’s session was mixed “under-the-hood,” and notably, the key breadth measures deteriorated as the session progressed. Small-caps started the day in a bullish fashion, but the Russell 2000 lagged behind its large-cap benchmarks, dipping into the red toward the end of the session. On the other hand, stocks are holding on to most of their weekly gains following two days of consolidation, and since the market-leading tech sector has been showing impressive stability, bears are likely to soon feel the heat again.
The Bank of England (BOE) expanded its quantitative easing program by $125 billion, while leaving its benchmark rate unchanged. Most analysts expected a much more dovish step. The Fed and the European Central Bank (ECB) both went “all in” on monetary easing, and judging by the markets’ reaction, the BOE could have done more as well. The Great British pound pulled back sharply in the wake of BOE’s decision, together with European stocks, and since the recent British indicators almost all missed expectations, the Central Bank might soon be forced to commit to more stimulus.
As always, have a great evening and stay tuned!!!
Joe
