Courtesy of Blain.
Remember when the world was doomed?
A week ago.
Those were the days. The indexes put in a 4th straight day of gains with the S&P 500 adding 0.19% and the NASDAQ 0.41%. The ISM manufacturing came in at 53.2 for June from 51.3 the month before and above expectations of 51.4. Any reading over 50 signals expansion. June U.S. vehicle sales came in at a 16.7 million at a seasonally adjusted annual rate in June, versus a 17.5 million rate in May, according to Autodata.
“Just continued risk-on everywhere. Europe’s doing really really well. ISM was strong. … Crude’s up,” said Jeremy Klein, chief market strategist at FBN Securities. He also attributed intraday gains to first-of-month flows.
“The ISM on the heels of Chicago PMI makes things look like they’re coming back on the manufacturing front, albeit from a low, and signalling things are stabilizing a little on the manufacturing front,” said Bryce Doty, senior fixed income manager with Sit Investment Associates.
The S&P 500 is staring at those November 2015 highs yet again; the NASDAQ stalled exactly where makes sense on our chart – the purple trend line which connects the highs of late 2015 through 2016.
The NYSE McClellan Oscillator is in overbought territory.
We have noted the fly in the ointment in this rally is the lack of jump in 10 year Treasury bonds; this story claims it’s due to Europeans fleeing European bonds.
The stunning move in Treasury yields to record lows early Friday morning signals panic and fear, but it’s not necessarily coming from the United States. As the yields on U.K. gilts sunk to new lows overnight and German bunds dug deeper into negative territory, buying in U.S. Treasurys sent the 30-year bond yield to an all-time low of 2.18% early Friday and the 10-year dipped below its closing high of 1.38% temporarily. Even before the U.K. voted to split from Europe last week, global bond yields have been testing uncharted territory. Easing programs by the European Central Bank and the Bank of Japan have resulted in negative rates in both Europe and Japan, and bond-buying programs have made some longer duration bonds scarce.
Tesla Motors (TSLA) rose 2% even after the electric-car maker confirmed late Thursday that the National Highway Traffic Safety Administration is investigating Tesla’s autopilot feature. That probe comes after a Model S using the autonomous-driving feature was involved in a deadly crash in Florida.
We’ll just leave this in the “when it rains, it pours” category: Chipotle Mexican Grill (CMG) fell 2.2% after the restaurant chain put Mark Crumpacker, chief creative and development officer, on administrative leave following his indictment in Manhattan over his alleged involvement in a cocaine drug ring.
Micron Technology (MU) dropped 9.2% after the memory-chip maker Thursday evening swung to a quarterly loss and said it would cut jobs as part of a cost-cutting plan.
Here are stock returns from most of the major global markets for the first half of the year.
Have a good 4th of July weekend and Blain implores you to stay frosty – we’ll be back here Tuesday.
