S&P 500 Closes Near Record Highs After Powell Comments
4:08 pm Tuesday, June 22nd, 2021
Stocks ended higher after Federal Reserve Chair Jerome Powell reiterated his views that inflation pressures will be transitory even after a notable increase in recent months.
Nine of the 11 S&P 500 sectors were trading in positive territory, paced by consumer discretionary (+1.0%) as shares of Amazon.com (AMZN) outperform amid an encouraging sales update for its Prime Day event. The utilities (-0.5%) and real estate (-0.4%) sectors are the two holdouts.
Growth stocks like Amazon are generally outpacing value stocks, which are slowing down after racing ahead yesterday. The iShares S&P 500 Growth ETF (IWV) was trading at all-time highs with a 0.7% gain, while the iShares S&P 500 Value ETF traded flat.
As for the Fed Chair, he will be testifying before the House Select Subcommittee on the Coronavirus Crisis. In his prepared remarks, Mr. Powell observed that the labor market has continued to improve, albeit at an uneven pace, and that inflation has increased notably due to transitory factors.
Interestingly, the median existing-home price for all housing types in May was a record $350,300, according to the existing home sales report. The chief economist from the National Association of Realtors, however, said supply is expected to improve and tamp down prices.
Highlighting some of today’s big batch of corporate news, Moderna (MRNA) will supply the U.S. Army and Europe with additional COVID-19 vaccines, CrowdStrike (CRWD) was upgraded to Buy from Hold at Stifel, and Plug Power (PLUG) reported mixed earnings results.
U.S. Treasuries ended Tuesday on a mixed note, as shorter tenors recorded gains while the long bond underperformed, ending just below its flat line. Longer tenors retreated at the open, but the opening slide found support about an hour after the cash start. Mid-morning trade saw a swift bounce that returned the 10-yr note to its flat line while the long bond inched up off its low as the day went on.
