Stocks continued their strong growth this week, spurred by an apparent agreement on a 1 trillion dollar infrastructure plan. This proposal, agreed to by the president and a group of senators, still has to pass the full congress. If it does, however, the resulting spending should spur further economic expansion. THE SPX reached another all time record high as did the Nasdaq which the Dow increased by 1/0%.
The market volatility and worry about increasing interest rates and a pullback of quantitative easing that were prominent last week are much less now as investors confidence has grown about stability in the plans of the Federal Reserve.
Good economic news on durable goods, corporate profits and unemployment was also positive for the market.
Technology stocks were once again strong, as were materials and construction companies in light of the infrastructure plan.
New orders for durable goods were up by 2.3% in May, after falling by 0.8% in April. The estimate was for a 2.7% drop. Durable goods orders have been up for 12 of the last 13 months. Transportation equipment, especially civilian aircraft, led the increase with a 7.6% climb. If defense is excluded, new orders were up by 1.7%. Non-defense capital goods, excluding aircraft, a marker of business investment rose 0.9% in May after increasing 1.0% in April.
The final value for the first quarter GDP was unchanged at 6.4%. GDP grew by 4.3% in the fourth quarter of 2020.
Corporate profits increased by 1.7% in the first quarter compared with an estimated 0.8% decline. The fourth quarter of 2020 showed a 3.3% drop in corporate profits.
Weekly initial unemployment claims dropped by 7,000 to 411,000. The estimate was 380,000 applications. A healthy labor market is considered to have claims in the 200-250,000 range.
Continuing claims also dropped by 144,000 to 3.39 million.
The SP 500 is up by 0.33% to close at 4280.70. The index is up 2.74% over five days, up 1.82% over one month, up 7.70% over three months and up 42.26% 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 NKE up 15.53%, KMX up 6.67%, OXY up 3.69%, LNC up 3.63% and UNM up 3.17%.
Trailing stocks were FDX down 3.63%, CZR down 2.20%, WAT down 1.97%, SNPS down 1.76% and AVGO down 1.67%.
The Dow Jones industrial Average was up 0.69% to close at 34433.84. The DOW is up 3.44% over five days, down 0.28% over one month, up 4.12% over three months and up 37.65% over one year.
The trailing P/E is 29.36 compared with 21.26 year ago and an estimated future P/E of 20.12. The current dividend yield is 1.82% compared with 2.62 one year ago.
Leading stocks were NKE up 15.53%, UNH up 1.52%, PG up 1.43%, WMT up 1.18% and TRV up 1.17%.
Trailing stocks were CAT down 1.38%, BA down 0.87%, CRM down 0.78%, MSFT down 0.63%, and MCD down 0.39%.
The NASDAQ composite is down 0.06% and closed at 14360.39. NASDAQ has been up 2.35% over five days, up 4.45% over one month, up 9.30% over 3 months and up 47.18% over one year.
Leading stocks were IKNX up 64.25%, FFHL up 34.12%, OSMT up 33.10%, ALF up 33.07% and CRCT up 25.53%.
Trailing stocks were GLBS down 26.53%, OMP down 15.61%, FEMY down 13.55%, BMEA down 12.33% and MOXC down 12.28%.
The MidCap SP400 rose by 0.94% to close at 2702.04. The SP400 has been up 1.46% for the past 5 days, down 0.88% for the past month, up 5.26% for the past 3 months and up 54.05% over the past year.
Leading stocks were RAMP up 6.35%, DY up 5.79% and HALO up 5.61%.
Trailing stocks were KBH down 6.73%, RUN down 5.39% and SABR down 5.09%
The SmallCap SP600 was up 1.36% to close at 1387.46. The SP600 is up 1.72% for the past 5 days, up 0.82% for the past month, up 6.73% for the past 3 months and up 70.87% over the past year.
Leading stocks were SHAK up 9.11%, SM up 8.01% and LPI up 6.94%.
Trailing stocks were TALO down 6.43%, GME down 3.21% and CCRN down 2.89%.
The CBOE VIX dropped 2.14% and closed at 15.97. The VIX is down 10.03% over five days, down 4.60% over one month, down 19.38% over three months and down 50.43% over one year.
On the New York stock exchange 2274 stocks advanced and 1044 declined, while on Nasdaq 3054 advanced and 1238 declined.
There were 199 new 52 week highs and 7 new 52 week lows on NYSE with 175 new highs and 26 new lows on NASDAQ.
The 2 year Treasury note yield is 0.265% and 10 year is 1.493%. The 10 year yield was up 5.5% over five days, down 9.1% over one month, down 19.2% three months ago, and up 84.6% one year ago.
SP500 Sector Performance % change
Financials + 1.21
Communication Services + 0.81
Industrials + 0.77
Information Technology +0.64
Health Care + 0.51
Consumer Staples + 0.33
Materials + 0.27
Consumer Discretionary + 0.09
Utilities - 0.10
Real Estate – 0.45
Financials has been up 1.43% over five days, down 3.61% over one month, up 7.93% over three months and up 54.54% over one year.
Real Estate has been down 0.86% over five days, up 3.61% over one month, up 13.97% over three months and up 30.29% over one year.