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SWS Daily Report - June 30, 2021


Overview

The second quarter ended with stocks again closing higher led by the SPX which set another record. The SPX has gained 14.4% year to date, one of the best firs halves of the year since 1998. The Dow dropped by 0.1% in June after four months of gains. However, the Dow is still up 12.8% for the year. Technology stocks fueled most of the gains in June. Currently investors appear more confident about the economic recovery and probable stimulus in the form of infrastructure spending, than they are worried about inflation risks. The 10 year Treasury note continued to drop, down to 1.443 from 1.479 and by 0.149% for the month.


Economy

The ADP National Employment Report showed that nonfarm private employment increased by 692,000 jobs in June. Expectations were for 600,000. Jobs have now increased for sic straight months. Job growth was evenly spread among small , medium and large business. Most jobs were created in service industries with leisure/hospitality leading the way by far.

There have been about 3 million jobs gained in 2021 showing strong labor market recovery, although payrolls remain almost 7 million less than 2019 before the pandemic.

US pending home sales rose by 8.0% in May compared to April and 13.1% compared with one year ago. The expectation was a 1% drop. This is the highest value in May since 2005 and occurred in all regions of the country. Pending home sales are based on signed contracts which are typically signed 1-2 months before the house is sold. Therefore, Pending Home Sales will typically predict Existing home sales for the next two months. The increase is thought to be stimulated by low mortgage rates and an increase in supply.

Major economic news for July 1

New and continuing weekly unemployment claims

Markit manufacturing index for June

ISM manufacturing index for June

Construction spending for May

Motor vehicle sales for June​


Markets

The SP 500 is up by 0.13% to close at 4297.50. The index is up 1.31% over five days, up 2.12% over one month, up 8.17% over three months and up 37.92% 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 COG up 7.13%, AMD up 4.93%, CF up 4.51%, DVN up 4.14% and GPS up 3.78%.

Trailing stocks were HOLX down 3.09%, PAYC down 2.92%, GWW down 2.40%, FTNT down 2.08% and MCHP down 2.02%.


The Dow Jones industrial Average was up 0.61% to close at 34502.51. The DOW is up 1.85% over five days, down 0.28% over one month, up 4.61% over three months and up 34.07% over one year.

The trailing P/E is 29.00 compared with 21.94 year ago and an estimated future P/E of 20.12. The current dividend yield is 1.83% compared with 2.54 one year ago.

Leading stocks were WMT up 2.71%, GS up 1.85%, BA up 1.61%, HON up 1.57% and MMM up 1.30%.

Trailing stocks were INTL down 1.07%, NKE down 0.94%, V down 1.27%, CRM down 0.63%, and MSFT down 0.18%.


The NASDAQ composite is down 0.17% and closed at 14503.95. NASDAQ has been up 1.63% over five days, up 5.43% over one month, up 9.49% over 3 months and up 42.83% over one year.

Leading stocks were CUEN up 123.74%, NEGG up 78.29%, BRQS up 45.71%, DIBS up 40.87% and VERB up 32.26%.

Trailing stocks were BSQR down 40.67%, ALT down 38.05%, MRIN down 37.98%, KRBP down 27.56% and PBLA down 25.92%.


The MidCap SP400 rose by 0.09% to close at 2696.12. The SP400 has been up 0.72% for the past 5 days, down 1.18% for the past month, up 3.33% for the past 3 months and up 52.27% over the past year.

Leading stocks were MLHR up 5.76%, CPRI up 5.55% and EQT up 5.25%.

Trailing stocks were IRDM down 5.13%, PCTY down 4.58% and CDAY down 4.11%


The SmallCap SP600 rose by 0.35% to close at 1374.84. The SP600 is up 0.44% for the past 5 days, down 1.26% for the past month, up 4.21% for the past 3 months and up 67.70% over the past year.

Leading stocks were LQDT up 13.21%, BBBY up 11.30% and MDP up 6.76%.

Trailing stocks were BNED down 16.84%, VCEL down 9.12% and AVAV down 8.85%.


The CBOE VIX is down 1.37% and closed at 15.80. The VIX is down 3.19% over five days, down 9.61% over one month, down 18.51% over three months and down 44.76% over one year.


On the New York stock exchange 1930 stocks advanced and 1425 declined, while on Nasdaq 1977 advanced and 2363 declined.

There were 205 new 52 week highs and 12 new 52 week lows on NYSE with 135 new highs and 36 new lows on NASDAQ.


The 2 year Treasury note yield is 0.251% and 10 year is 1.464%. The 10 year yield was down 1.39% over five days, down 7.73% over one month, down 16.02% three months ago, and up 116.05% one year ago.


SP500 Sector Performance % change

Energy + 1.31

Industrials + 0.84

Consumer Staples + 0.72

Financials + 0.47

Materials + 0.24

Consumer Discretionary + 0.04

Health Care - 0.04

Information Technology - 0.10

Utilities - 0.16

Communication Services - 0.23

Real Estate - 0.76

Energy has been down 1.25% over five days, down 1.17% over one month, up 10.13% over three months and up 45.33% over one year.

Real Estate has been down 0.63% over five days, down 0.35% over one month, up 12.31% over three months and up 24.98% over one year.


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