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SWS Daily Market Update - July 20, 2021


Overview

Buying on the drop was the prevalent mood on Wall Street today with all the indices rising after the selling on Monday. The increases were large but not quite enough to completely reverse the losses on Monday. The indices are now within 2% of their all time highs set on July 12. Fears of new COVID infections were thought to have caused the drop Monday. However, since the COVID risk did not disappear overnight, the attractiveness of stocks in the current low interest rate environment, and the strength of the economy so far this year, were the predominant feelings today. Gains were broad based with 10 of the 11 SP 500 sectors increasing, led by industrials and financial stocks. Small caps also did well with the Russell 2000 up 3%. Persistence of the high stock valuations will likely require continued good earnings reports over the next several weeks.


Economic

Housing starts rose above expectations in June with a 6.3% increase over May and 29% higher than June 2020. However, building permits were down 5.1% in June compared to May, but still higher by 23.3% compared with June 2020. Building permits are now at an 8 month low. Housing completions were down 1.4% in June compared to May but 6.5% higher than one year ago. Demand remains high but builders face high prices and shortages of materials and labor, which may explain the drop in building permits. The Index of builder perceptions and expectations from the National Association of Home Builders dropped from 81 to 80, reaching an 11 month low.


Markets

The SP 500 is up by 1.52% to close at 4323.06. The index is down 1.06% over five days, up 1.80% over one month, up 4.55% over three months and up 37.72% over one year.

The trailing P/E is 36.60 compared with 29.34 one year ago and estimated future P/E 22.57. Dividend yield is currently 1.35 compared with 1.90 one year ago.

Leading stocks were HCA up 14.37%, AAL up 8.38%, NCLH up 8.28%, RCL up 7.74% and CCL up 7.45%.

Trailing stocks were PPG down 4.38%, OMC down 4.31%, PM down 3.06%, CLX down 2.85% and CPB down 1.37%.


The Dow Jones industrial Average is up by 1.62% to close at 34511.99. The DOW is down 1.08% over five days, up 1.67% over one month, up 2.04% over three months and up 28.58% over one year.

The trailing P/E is 26.14 compared with 22.85 year ago and an estimated future P/E of 19.80. The current dividend yield is 1.84% compared with 2.47 one year ago.

Leading stocks were BA up 4.91%, HON up 4.08%, AXP up 3.72%, GS up 2.83% and AAPL up 2.60%.

Trailing stocks were MRK down 1.14%, PG down 0.53%, VZ down 0.47%, TRV down 0.11%, and AMGN up 0.06%.


The NASDAQ composite is up by 1.57% and closed at 14498.88. NASDAQ dropped 1.22% over five days, up 1.72% over one month, up 5.17% over 3 months and up 35.75% over one year.

Leading stocks were NURO up 207.98%, NRBO up 40.78%, NVFY up 36.89%, IPWR up 34.06% and ENDP up 24.70%.

Trailing stocks were ARDX down 73.90%, INTZ down 49.88%, DTSS down 37.87%, AHPI down 30.41%, and MDIA down 21.24%.


The MidCap SP400 rose by 2.77% to close at 2642.18. The SP400 is down 1.11% for the past 5 days, up 1.20% for the past month, down 0.92 for the past 3 months and up 42.95% over the past year.

Leading stocks were PACWL up 9.29%, THC up 9.06% and IRDM up 9.03%.

Trailing stocks were MAN down 3.11%, SAM down 1.58% and HAIN down 1.04%


The SmallCap SP600 rose by 2.94% to close at 1310.38. The SP600 is down 2.14% for the past 5 days, down 4.17% for the past month, up 0.51% for the past 3 months and up 52.48% over the past year.

Leading stocks were ENDP up 24.70%, HT up 10.76% and AMEH up 10.64%.

Trailing stocks were GKOS down 14.88%, SGH down 2.60% and FLGT down 2.40%.


The CBOE VIX dropped by 12.31% and closed at 19.73. The VIX is up 15.25% over five days, up 18.43% over one month, up 5.62% over three months and down 20.57% over one year.


On the New York stock exchange 2759 stocks advanced and 577 declined, while on Nasdaq 3431 advanced and 958 declined.

There were 96 new 52 week highs and 30 new 52 week lows on NYSE with 64 new highs and 76 new lows on NASDAQ.


The 2 year Treasury note yield is 0.198% and 10 year is 1.224%. The 10 year yield is down 19.9% over five days, down 24.3% over one month, down 33.8% three months ago, and up 62.2% one year ago.


SP500 Sector Performance % change

Industrials +2.74

Financials +2.42

Real Estate +1.88

Consumer Discretionary +1.72

Information Technology +1.47

Energy +1.38

Health Care +1.20

Materials +1.20

Communication Services +1.10

Utilities +0.39

Consumer Staples -0.08


Industrials has been down 0.13% over five days, up 0.81% over one month, up 2.89% over three months and up 42.31% over one year.

Consumer Staples has been down 10.93% over five days, down 13.06% over one month, down 2.63% over three months and up 29.95% over one year.


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