Stocks Back to New High on Value Buying
4:20 pm Friday, July 09th, 2021
U.S. stocks jumped on Friday and the S&P 500 hit a record high as financials and other economically focused sectors rebounded after a selloff sparked by growth worries earlier in the week.
Ten of the 11 S&P 500 sectors are contributing to the record-setting performance, led by the cyclical financials (+2.4%), materials (+1.8%), energy (+1.6%), and industrials (+1.4%) sectors — four of the five sectors that are down for the week. The utilities sector (-0.4%) is the lone holdout amid the higher rates.
The move in the 10-yr yield is being viewed as a technical bounce that really started yesterday. In the same vein, stocks are building on yesterday’s intraday rebound bid that transpired after the 10-yr yield bottomed. What’s more, the outperformance of the cyclical stocks suggests that growth concerns were a bit overstated yesterday.
Apple (AAPL), meanwhile, gained steam after a slow start and has played a big role in helping push the S&P 500 to new heights. AAPL has set its first all-time high since January.
Growth stocks and value stocks alike are having decent days, but the value stocks are having a little bit of a better day. For reference, the Russell 1000 Value Index is up 1.2% while the Russell 1000 Growth Index is up 0.7%.
In other corporate developments, Pfizer (PFE) announced that it’s working on a booster COVID-19 shot to target the Delta variant, Costco (COST) reported encouraging comparable sales data for June, and General Motors (GM) was initiated with an Outperform rating at Wedbush.
Separately, the Fed released its semiannual monetary policy report to Congress today, but the report didn’t contain any major surprises. Fed Chair Powell will comment on the report next week.
Today’s economic data was limited to Wholesale Inventories for May, which increased 1.3% m/m in May (consensus 1.1%) following a revised 1.1% increase (from +0.8%) in June.
