Stocks Extends Rally, Dollar Firm As Tapering Debate Dominates
4:08 pm Thursday, August 12th, 2021
S&P 500 continues to hit a record high while U.S. Treasury yields and the dollar firmed on Thursday as the debate continued over when the Federal Reserve will start to ease stimulus.
Specifying the data, the Producer Price Index for final demand and the index for final demand, less food and energy, both increased 1.0% month-over month, versus the Briefing.com consensus 0.5% for both readings. On a year-over-year basis, they were running hot at 7.8% and 6.2%, respectively.
The stock market is looking at the Treasury market for some guidance, and it’s suggesting that inflation rates could be peaking since the 10-yr yield is sitting at 1.36% — the same level it was trading at before the report was released. Separately, weekly and continuing claims improved from the prior week.
At the current juncture, the script from the past couple of days has been flipped: growth stocks are now outperforming value stocks. The Russell 1000 Growth Index is up 0.3% while the Russell 1000 Value Index is down 0.1%.
From a sector standpoint, the information technology (+0.4%) and health care (+0.5%) sectors are outperforming amid decent gains in Apple (AAPL), Microsoft (MSFT), and Pfizer (PFE). The energy (-0.8%) and materials (-0.5%) sectors underperformed.
A closer look inside the tech sector, though, shows weakness in the semiconductor stocks after Micron (MU 69.32, -5.71, -7.6%) was downgraded to Equal-Weight from Overweight at Morgan Stanley, which said DRAM conditions are losing steam. The Philadelphia Semiconductor Index is down 1.3%.
Palantir (PLTR), Opendoor (OPEN), and CyberArk (CYBR) were some growth stocks with solid gains following their earnings reports.
