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SWS Daily Report - June 18, 2021

Updated: Jun 21


Overview

The market ended the week lower, mainly because of concerns that the Federal Reserve may change its policy earlier than previously believed.

The Dow had its worst week since October of last year, down 1.6% on Friday and 3.45% for the week. The SPX dropped this week by 1.9%, after having risen for the past 3 weeks. NASDAQ drop less than the other major indices, down 0.3% for the week.

The leader of the St. Louis Federal Reserve predicted that the 1st rate increase may occur by the end of 2022 rather than 2023. Although he does not have a vote on the FOMC, the concern is that his beliefs may be shared by others. The Fed is seeing more inflation than it anticipated a few months ago. The current forecast is for 3.4% inflation rate in 2021, up from the 2.4% predicted in March. Quantitative easing is currently providing a stimulus at 80,000,000,000 a month in treasury bonds and 40,000,000,000 a month in mortgage bonds and this could also be tapered.

The drop in the market may have been amplified on Friday by the triple witching hour of options and stock index futures expiring.

The stock market has been growing more rapidly than the economy and has set a series of record highs. This makes it vulnerable to any suggested change in the monetary policy that has sustained the market. The volatility index VIX, sometimes called the fear gauge, reached its highest level in weeks.

The dollar climbed to a two-month high and oil prices and other commodities priced in dollars also climbed.


Markets

The SP 500 dropped by 1.31% to close at 4166.45. The index has been down 1.91% over five days, up 0.25% over one month, up 6.47% over three months and up 34.50% over one year.

The trailing P/E is 37.23 compared with 27.38 one year ago and estimated future P/E 22.18. Dividend yield is currently 1.38 compared with 1.97 one year ago.

Leading stocks were LEN up 3.72%, ADBE up 2.58%, ENPH up 2.38%, GNRC up 1.97% and ABMD up 1.91%.

Trailing stocks were GL down 5.97%, BKR down 5.46%, FMC down 5.05%, LNC down 4.77% and STT down 4.75%.


The Dow Jones industrial Average was down 1.58% to close at 33290.08. The DOW is down 3.45% over five days, down 2.68% over one month, up 2.03% over three months and up 28.76% over one year.

The trailing P/E is 28.38 compared with 21.85 year ago and an estimated future P/E of 19.62. The current dividend yield is 1.88% compared with 2.50 one year ago.

Leading stocks were HD down 0.17%, CAT DOWN 0.28%, NKE down 0.51%, MSFT down 0.56% and CRM down 0.68%.

Trailing stocks were CVX down 3.77%, WBA down 3.73%, GS down 3.50%, TRV down 2.76% and INTC down 2.64%.


The NASDAQ composite is down 0.92% and closed at 14030.38. NASDAQ has been down 0.28% over five days, up 4.15% over one month, up 6.17% over 3 months and up 41.06% over one year.

Leading stocks were SYKE up 29.83%, GERN up 29.79%, ALF up 29.43%, LKCO up 22.16% and SWBI up 17.22%

Trailing stocks were ORPH down 49.66%, ATHA down 38.87%, UONE down 27.96%, CGRN down 22.27% and OXBR down 21.66%.


The MidCap SP400 dropped 1.92% to close at 2611.94. The SP400 has been down 5.10% for the past 5 days, down 2.90% for the past month, down 0.08% for the past 3 months and up 46.35% over the past year.

Leading stocks were MASI up 4.37%, CABO up 3.94% and CNXC up 3.40%.

Trailing stocks were ADNT down 6.34%, FFIN down 5.86% and BRKS down 5.64%


The SmallCap SP600 was down 2.45% to close at 1330.67. The SP600 has dropped 4.70% for the past 5 days, down 0.95% for the past month, down 1.80% for the past 3 months and up 65.52% over the past year.


Leading stocks were SKYE up 29.83%, CMTL up 7.13% and GEO up 5.83%.

Trailing stocks were TBBK down 9.88%, UIS down 9.24% and UCTT down 8.71%.


The CBOE VIX was up 16.62% and closed at 20.70. The VIX is up 32.27% over five days, up 2.73% over one month, down 1.19% over three months and down 41.06% over one year.


On the New York stock exchange 837 stocks advanced and 2496 declined, while on Nasdaq 1263 advanced and 3013 declined.


There were 75 new 52 week highs and 29 new 52 week lows on NYSE with 78 new highs and 53 new lows on NASDAQ.


The 2 year Treasury note yield is 0.037% and 10 year is 0.071%. The 10 year yield was down 1.5% over five days, down 18.1% over one month, down 28.8% three months ago, and up 73.8% one year ago.


SP500 Sector Performance % change

Consumer Discretionary - 0.47

Information Technology - 0.93

Communication Services - 1.15

Health Care - 1.22

Industrials - 1.25

Real Estate - 1.50

Materials - 1.62

Consumer Staples - 1.66

Financials - 2.45

Utilities - 2.63

Energy - 2.92


Consumer Discretionary has been down 0.07% over five days, up 2.79% over one month, up 4.48% over three months and up 33.45% over one year.

Energy has been down 5.21% over five days, up 0.52% over one month, up 5.89% over three months and up 32.22% over one year.



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