US Stocks Hit Another Intra-Day Record Highs
4:11 pm Tuesday, August 10th, 2021
Stocks strengthened on Tuesday, and hit a new high during the session, while U.S. Treasury yields rose to their highest levels since mid-July, spurred by Federal Reserve tapering talk.
The growth/value divide is best illustrated by the 0.6% gain the Russell 1000 Value Index, versus the 0.3% decline in the Russell 1000 Growth Index. From a sector perspective, the S&P 500 energy (+1.6%), materials (+1.4%), financials (+1.0%), and industrials (+1.0%) sectors were up at least 1.0%, while the information technology sector was down 0.7%.
Some might attribute this rotation to the Senate passing the $1 trillion bipartisan infrastructure bill, although this was widely expected, and its fate is more uncertain in the House since House Speaker Pelosi wants the $3.5 trillion budget reconciliation bill to pass before she brings the smaller bill to a vote.
Nevertheless, the stock market has had a habit of rotating from one group to the other, which has earned the market its resilient characteristic. The S&P 500 has not had a decline of more than 6% from peak to trough this year.
Kansas City Southern (KSU) was one of the industrial standouts after Canadian Pacific (CP) increased its bid to acquire the company to $300 per share in cash and stock.
Elsewhere, Treasury yields and oil prices were moving higher with the pro-cyclical trade, which has given the financial and energy stocks an additional boost. The 10-yr yield is up three basis points to 1.34%. Oil prices are bounding 3.5% after being down 10% for the month entering the session.
The semiconductor stocks have gotten clipped not only by the higher interest rates but also by an industry report indicating that PC DRAM prices are expected to decline by up to 5% in the fourth quarter. The Philadelphia Semiconductor Index is down 1.1% while Micron (MU) was down nearly 5%.
