The markets turned around today as both stocks and bond yields dropped. The major indices decline was the worst in over 2 weeks and was broad based, affecting most sectors. The drop was sharpest early in the day and was followed by a partial recovery.
The change in the mood of investors was blamed in part over worry about labor and supply chain shortages that could slow down economic recovery as well as reports of a potential surge in COVID infection related to the contagious delta variant.
Treasury yields continued to drop with the 10 year value now 1.287, the lowest since mid February of this year.
Initial unemployment claims jumped this week to 373,000 compared with an expected 350,000. The value for last week was a revised 371,000. Initial claims reflect layoffs in the economy. One year ago claims were more than 1 million a week. In 2019 new claims were around 200,000 a week.
Continuing unemployment claims, which measure ongoing benefits, were down 145,000 to 3.34 million. The consensus estimate was similar at 3.35 million. This is the lowest level since March 2020.
Consumer borrowing jumper by 35.3 billion in May as the growing economy motivated Americans to increase their use of credit. This is the largest one month gain since 1943. The expectation was 18 billion. Credit has increased 4 straight months with the April value 20 billion. Much of the gain was in auto and student loans, with auto sales accounting for most of the 26.1 billion in this category. Credit card borrowing was up 9.2 billion. Year over year, auto/student loans is up 5.8% while credit cards are down 2.2%.
Credit cards are termed revolving debt and this is expected to increase in the next few months as demand for services increases. Non-revolving credit for goods such as automobiles may start dropping. The credit report does not cover loans such as mortgages that are secured by real estate.
The SP 500 dropped by 0.86% to close at 4320.82. The index is up 0.02% over five days, up 1.93% over one month, up 5.46% over three months and up 37.08% over one year.
The trailing P/E is 37.48 compared with 27.38 one year ago and estimated future P/E 22.65. Dividend yield is currently 1.35 compared with 1.97 one year ago.
Leading stocks were BIIB up 3.86%, BLL up 2.98%, COG up 2.29%, BA up 2.15% and MKTX up 1.99%.
Trailing stocks were KSU down 7.87%, NSC down 7.16%, CSX down 6.16%, UNP down 4.38% and PHM down 4.35%.
The Dow Jones industrial Average dropped by 0.75% to close at 34421.93. The DOW is down 0.61% over five days, down 0.13% over one month, up 2.74% over three months and up 33.91% over one year.
The trailing P/E is 28.58 compared with 21.85 year ago and an estimated future P/E of 20.16. The current dividend yield is 1.82% compared with 2.53 one year ago.
Leading stocks were BA up 2.15%, IBM up 0.66%, AMGN up 0.44%, NKE up 0.29% and CSCO up 0.00%.
Trailing stocks were TRV down 2.41%, GS down 2.37%, AXP down 2.04%, JPM down 1.73%, and WBA down 1.62%.
The NASDAQ composite dropped 0.72% and closed at 14559.78. NASDAQ has been up 0.26% over five days, up 3.85% over one month, up 5.28% over 3 months and up 38.04% over one year.
Leading stocks were CARV up 106.90%, NVFY up 71.50%, ARPO up 63.16%, UTime LTD up 43.11% and LMFA up 46.28%.
Trailing stocks were NEGG down 32.22%, CPOP down 25.36%, QFIN down 21.48%, MTEX down 17.84%, and SQBG down 2.56%.
The MidCap SP400 dropped 1.28% to close at 2648.43. The SP400 is down 2.53% for the past 5 days, down 3.01% for the past month, down 0.36% for the past 3 months and up 51.46% over the past year.
Leading stocks were EQT up 3.84%, MUSA up 2.50% and ARWR up 2.49%.
Trailing stocks were TPH down 7.17%, WW down 7.13% and TMHC down 6.12%
The SmallCap SP600 dropped by 1.24% to close at 1324.40. The SP600 is down 4.29% for the past 5 days, down 4.22% for the past month, down 0.58% for the past 3 months and up 65.58% over the past year.
Leading stocks were GPI up 8.35%, PKE up 4.33% and SWN up 4.09%.
Trailing stocks were POLY down 8.68%, LPI down 6.68% and NBRWF down 6.25%.
The CBOE VIX is up by 17.28% and closed at 19.00. The VIX is up 22.74% over five days, up 18.01% over one month, up 12.09% over three months and down 35.06% over one year.
On the New York stock exchange 807 stocks advanced and 2507 declined, while on Nasdaq 1425 advanced and 2863 declined.
There were 95 new 52 week highs and 63 new 52 week lows on NYSE with 70 new highs and 144 new lows on NASDAQ.
The 2 year Treasury note yield is 0.201% and 10 year is 1.311%. The 10 year yield was down 12.9% over five days, down 14.5% over one month, down 35.2% three months ago, and up 66.3% one year ago.
SP500 Sector Performance % change
Real Estate -0.08
Consumer Discretionary -0.09
Consumer Staples -0.30
Health Care -0.47
Information Technology -0.92
Communication Services -1.05
Real Estate has been up 1.83% over five days, down 0.68% over one month, up 12.53% over three months and up 30.60% over one year.
Energy has been down 3.60% over five days, down 4.14% over one month, up 2.46% over three months and up 57.40% over one year.