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SWS Daily Report - July 1, 2021



Overview

Stocks gained today, with the SPX now up 6 days in a row and closing at another record high. The Dow and Nasdaq also climbed. Investors remain buoyed by the rebounding economy and the prospect of strong earnings reports for the second quarter. The good news on the decline in unemployment claims also helped. Worries about rising interest rates to combat inflation appear to have faded. Oil prices were up and energy stocks climbed along. Oil is predicted to continue to rise as pandemic restrictions ease and the world economy grows. The 10 year Treasury note yield was up slightly to 1.479 from 1.443%.


Economy

New un-employments claims fell to 364,000 last week, the first time since the pandemic they have been below 400,000. This was a drop of 51,000 from the previous week and lower than the consensus estimate of 388,000. This is the lowest value since March 2020 when they were 256,000. The peak was in April 2020 with a record of 6.15 million claims. A healthy labor market is considered to have 200-250,000 claims. Continuing claims, however, increased by 56,000 to 3.47 million.


ISM reported that national factory activity dropped to 60.6 in June from 61.2 in May. New orders were 66%, down 1% from May, Production was up 2.3% to 60.8 and Prices were up 4.1 to 92.1%, the highest value since July 1979.


A value above 50 indicates that expansion is occurring. The expansion has now occurred for 13 straight months. Manufacturing comprises about 12% of the US economy.


The HIS Markit US manufacturing purchasing manufacturers index for June was 62.1, unchanged from May and remains one of the strongest on record since data collection began in May 2007. New orders growth remained strong, output growth was hampered by supply chain disruptions and labor shortages, and input costs rose sharply because of material shortages.

US construction spending dropped 0.3% in May following a 0.1% increase in April. Overall construction spending was still up 7.5% year over year. Housing construction was up 0.2% for the month, 28.7% year over year. Nonresidential construction dropped 1.1% in May and 5.8% for the year. Government construction was down 0.2% in May and 8.7% compared with last year.


Major economic news for July 2, 2021

Nonfarm payrolls for June. The value for May was 559,000 and the estimate for June is 711,000

Unemployment rate for June. The May value was 5.8%

Trade deficit for May. The April value was 68.9 billion

Factory orders for May. April value was up 0.6%​

Markets

The SP 500 is up by 0.52% to close at 4319.94. The index is up 1.25% over five days, up 3.03% over one month, up 7.46% over three months and up 38.02% over one year.

The trailing P/E is 37.26 compared with 27.21 one year ago and estimated future P/E 22.52. Dividend yield is currently 1.35 compared with 2.01 one year ago.

Leading stocks were FANG up 6.08%, OXY up 5.08%, MRO up 4.04%, DXC up 3.72% and SLB up 3.31%.

Trailing stocks were WBA down 7.41%, MU down 5.73%, KLAC down 3.85%, TER down 3.42% and AMAT down 3.13%.


The Dow Jones industrial Average was up 0.38% to close at 34633.53. The DOW is up 1.28% over five days, down 0.16% over one month, up 4.47% over three months and up 34.01% over one year.

The trailing P/E is 29.29 compared with 21.95 year ago and an estimated future P/E of 20.12. The current dividend yield is 1.81% compared with 2.55 one year ago.

Leading stocks were NKE up 2.27%,TRV up 1.42%, CVX up 1.40%, AXP up 1.30% and AMGN up 1.29%.

Trailing stocks were WBA down 7.41%, WMT down 1.21%, GS down 1.20%, CAT down 0.42%, and KO down 0.28%.


The NASDAQ composite is up 0.13% and closed at 14522.38. NASDAQ has been up 1.06% over five days, up 6.67% over one month, up 7.73% over 3 months and up 42.27% over one year.

Leading stocks were ATHE up 64.62%, MEDS up 62.22%, MRIN up 40.54%, BLIN up 33.72% and AUUD up 30.32%.

Trailing stocks were CTXR down 25.29%, DIBS down 22.12%, BRQS down 22.07%, ALGS down 17.29%, and SLS down 15.95%.


The MidCap SP400 rose by 0.78% to close at 2717.04. The SP400 has been up 0.56% for the past 5 days, up 0.08% for the past month, up 2.62% for the past 3 months and up 52.73% over the past year.

Leading stocks were AMED up 6.70%, TPX up 5.95% and MUR up 5.93%.

Trailing stocks were AYI down 5.76%, SAM down 5.32% and MKSI down 4.03%


The SmallCap SP600 rose by 0.65% to close at 1383.77. The SP600 is down 0.27% for the past 5 days, up 0.18% for the past month, up 3.24% for the past 3 months and up 67.94% over the past year.

Leading stocks were SLCA up 20.59%, FRGI up 11.24% and AXL up 10.24%.

Trailing stocks were POLY down 7.02%, LQDT down 5.74% and FLGT down 5.19%.


The CBOE VIX is down 2.21% and closed at 15.48. The VIX is down 3.07% over five days, down 14.19% over one month, down 10.68% over three months and down 44.08% over one year.


On the New York stock exchange 2150 stocks advanced and 1149 declined, while on Nasdaq 2475 advanced and 1871 declined.

There were 184 new 52 week highs and 5 new 52 week lows on NYSE with 111 new highs and 25 new lows on NASDAQ.


The 2 year Treasury note yield is 0.263% and 10 year is 1.464%. The 10 year yield was down 6.6% over five days, down 9.2% over one month, down 25.8% three months ago, and up 78.9% one year ago.


SP500 Sector Performance % change

Energy + 1.72

Utilities + 1.13

Health Care + 0.93

Communication Services + 0.88

Financials + 0.77

Industrials + 0.62

Materials + 0.55

Consumer Discretionary + 0.43

Real Estate + 0.31

Information Technology + 0.10

Consumer Staples - 0.28

Energy has been down 0.41% over five days, up 0.21% over one month, up 9.12% over three months and up 46.18% over one year.

Consumer Staples has been up 0.85% over five days, down 1.46% over one month, up 3.13% over three months and up 19.05% over one year.




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