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SWS Daily Report - July 7, 2021


Overview

All major indices were up today, with the SPX and Nasdaq again setting all time high records. Investors seem reassured by the release of the FOMC minutes that there would be no imminent change in asset purchases or increase in interest rates. The Treasury yield continued to drop reaching a four month low of 1.295% at one time during the day. The drop in yield made stocks more attractive. Oil prices dropped again after OPEC and its allies did not reach agreement about output. They are now at a 2 week low and have pulled down the prices of energy stocks.

Economy

The minutes of the Federal Reserve open committee minutes that were released today indicated that the economy had grown faster than expected this year and they may have to pull back their support of the economy early than they expected. While they decided not to reduce the 120 billion monthly purchase of treasury and mortgage securities at present, some members thought that the timing of the move could be moved sooner. The committee still believed that the surge in inflation was likely to be temporary due to pandemic induced supply chain shortages. However, it is important to watch the expectations of inflation by businesses and consumers as these can be self-fulfilling. In terms of interest rate rises, the Fed has stated that this would require inflation to run above 2% and that there was maximum employment, conditions not yet met. There will be a great deal of attention on the Fed meeting this month for further clues to its intentions.

US job openings in May rose by 16,000 to a record high of 9.209 million, slightly below the expected 9.325 million. This is about 30% higher than existed in February 2020 before the pandemic, This number is close to the 9.3 million unemployed who are actively seeking jobs, indicating a tight labor market. Typically, the number of unemployed exceeds the available jobs.


Markets

The SP 500 is up by 0.34% to close at 4358.13. The index is up 1.41% over five days, up 3.28% over one month, up 6.82% over three months and up 37.48% 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 ORCL up 3.59%, NUE up 3.35%, KMX up 3.05%, BIIB up 3.03% and ROK up 2.94%.

Trailing stocks were XLNX down 4.67%, MKTX down 4.60%, PENN down 3.21%, AMD down 4.16% and CCL down 3.84%.


The Dow Jones industrial Average is up by 0.30% to close at 34681.79. The DOW is up 0.86% over five days, down 0.15% over one month, up 3.13% over three months and up 31.54% over one year.

The trailing P/E is 28.71 compared with 22.01 year ago and an estimated future P/E of 20.16. The current dividend yield is 1.81% compared with 2.51 one year ago.

Leading stocks were AAPL up 1.80%, MMM up 1.51%, HD up 1.32%, HON up 1.00% and TRV up 0.89%.

Trailing stocks were BA down 1.85%, CVX down 1.01%, CRM down 0.72%, GS down 0.59%, and DIS down 0.50%.


The NASDAQ composite is up 0.01% and closed at 14665.06. NASDAQ has been up 1.11% over five days, up 5.41% over one month, up 7.13% over 3 months and up 39.77% over one year.

Leading stocks were NEGG up 148.42%, MTEX up 49.69%, DTST up 32.78%, IPW up 32.19% and Dare Bioscience Inc up 23.68%.

Trailing stocks were BLIN down 30.09%, BSQR down 28.37%, IPDN down 20.75%, WAVE down 20.42%, and MRIN down 20.30%.


The MidCap SP400 is up 0.11% to close at 2682.81. The SP400 is down 0.49% for the past 5 days, down 1.81% for the past month, up 1.32% for the past 3 months and up 51.16% over the past year.

Leading stocks were AMG up 5.34%, STLD up 5.15% and KNX up 5.14%.

Trailing stocks were CNK down 5.26%, QDEL down 5.16% and RUN down 5.09%


The SmallCap SP600 dropped by 0.64% to close at 1341.03. The SP600 is down 2.46% for the past 5 days, down 4.34% for the past month, up 1.19% for the past 3 months and up 63.83% over the past year.

Leading stocks were SGH up 17.81%, HCC up 9.77% and AMEH up 8.90%.

Trailing stocks were NBRWF down 12.00%, ENDP down 11.56% and SHEN down 10.01%.


The CBOE VIX dropped by 1.46% and closed at 16.20. The VIX is up 2.34% over five days, down 9.45% over one month, down 5.59% over three months and down 42.31% over one year.


On the New York stock exchange 1579 stocks advanced and 1703 declined, while on Nasdaq 1480 advanced and 2837 declined.

There were 211 new 52 week highs and 38 new 52 week lows on NYSE with 154 new highs and 113 new lows on NASDAQ.


The 2 year Treasury note yield is 0.220% and 10 year is 1.319%. The 10 year yield was down 14.8% over five days, down 16.9% over one month, down 35.3% three months ago, and up 65.5% one year ago.


SP500 Sector Performance % change

Materials +1.02

Industrials +1.00

Health Care +0.62

Utilities +0.58

Consumer Staples +0.56

Real Estate +0.52

Information Technology +0.49

Financials +0.09

Consumer Discretionary -0.01

Communication Services -0.10

Energy -0.73


Materials has been up 0.20% over five days, down 4.17% over one month, up 4.08% over three months and up 43.11% over one year.

Energy has been down 3.44% over five days, down 5.34% over one month, up 5.96% over three months and up 42.96% over one year.



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