Stocks Extend Record High As Jobless Claims Dive
4:16 pm Thursday, July 01st, 2021
The S&P 500 index kicked off the second half of the year at a record high as data showed fewer-than-expected weekly jobless claims, while energy stocks were supported by a spike in oil prices.
Like yesterday, value stocks are pulling ahead of the growth stocks, underpinned today by relatively encouraging manufacturing and unemployment data. Specifically, the June ISM Manufacturing Index stayed in expansionary territory (50.0% or greater) for the 13th straight month with a reading of 60.6% (consensus 61.0%), and weekly initial claims fell to a post-pandemic low of 364,000 (consensus 400,000).
Value sectors energy (+2.1%) and utilities (+1.3%) are up the most right now with gains over 1.0%. Energy stocks are drawing additional support from higher oil prices after OPEC+ ministers reportedly recommended increasing production by 400,000 bpd, running from August to December, versus reported expectations of 500,000 bpd.
The top-weighted information technology sector (-0.3%) was the only sector trading lower, largely due to weakness in the semiconductor stocks, a lack of support from Apple (AAPL) and Microsoft (MSFT), and a 10-yr yield trading higher by three basis points to 1.48%.
Micron (MU) was leading the chip complex lower despite reporting better-than-expected earnings reports and issuing upbeat quarterly guidance. Investors are reportedly disappointed because the company highlighted supply chain, output, and cost-related headwinds in fiscal Q3 and Q4 guidance did not exceed estimates by an even wider margin.
The Philadelphia Semiconductor Index is down 1.4%, although NVIDIA (NVDA) was bucking the negative trend after its price target was raised to a Street-high of $1000 from $750 at BMO Capital Markets.
Walgreens Boots Alliance (WBA) was trading sharply like Micron despite also releasing a better-than-expected earnings report. The weakness is being attributed to concerns about the spending needed for VillageMD and for upgrading the company’s technology capabilities.
