Stocks Hit Another Record High As Biden Announces Infrastructure Agreement
4:07 pm Thursday, June 24th, 2021
Wall Street indexes moved higher on Thursday, putting the Nasdaq on course for another record close and bringing the S&P 500 close to its own record.
There have been several supportive factors today: reports indicate that a bipartisan framework for a $1.2 trillion infrastructure deal has been reached, the 10-yr yield (1.48%) continues to trade below 1.50%, the FDA granted Breakthrough Therapy designation for Eli Lilly’s (LLY) investigational antibody therapy for Alzheimer’s disease, and many mega-caps are participating.
Tesla (TSLA) leads the mega-caps higher, extending its weekly gain to 11%, in a momentum trade. The S&P 500 consumer discretionary sector, where Tesla resides, is up 0.7% and is joined by the information technology (+0.8%), communication services (+0.8%), and financials (+0.8%) sectors atop the sector rankings.
Financial stocks have recently emerged as leaders ahead of the Fed’s stress test results after the close, which many expect will allow banks to increase share buybacks and dividends. Wells Fargo (WFC) is up 2.5% right now.
On the downside, the real estate (-0.7%) and utilities (-0.3%) sectors are the only two sectors trading lower right now. Biogen (BIBB) was an individual laggard, as its Alzheimer’s treatment may soon compete with Eli Lilly’s. Bloomberg also reported that Biogen expects a slow uptake of its drug.
Separately, weekly initial claims (411,000) stayed above 400,000 for the second straight week while the Briefing.com consensus was projecting 380,000 new claims. The market hasn’t been upset and remains hopeful that the labor market will strengthen in the fall, as Fed Chair Powell suggested to lawmakers earlier this week.
U.S. Treasuries ended Thursday on a mixed note, as shorter tenors retreated while the long bond ended modestly higher. The 10-yr note split the difference, ending on its flat line. Intraday volatility was limited, allowing Treasuries to finish largely how they started. The 5-yr note and the 2-yr note opened in the red while longer tenors started with gains. The morning release of a mixed batch of economic data was met with some impulse buying across the curve, but the slight move quickly gave way to a resumption of the initial trend.
