Stocks Recover From Session Low: AMZN Leads
4:08 pm Tuesday, July 06th, 2021
US stocks were mixed on Tuesday, with the S&P 500 and Nasdaq 100 hovering near record highs as the Dow Jones fell slightly.
Peak growth concerns have been fueled by a softer-than-expected June ISM Non-Manufacturing Index, which decelerated to 60.1% (Briefing.com consensus 63.0%) from a record-high of 64.0% in May, and by a study in Israel suggesting the Pfizer (PFE) COVID-19 vaccine isn’t that effective in preventing contraction of the Delta variant.
Accordingly, the cyclical energy (-3.5%), financials (-2.0%), materials (-1.7%), and industrials (-1.5%) sectors are taking it on the chin, the 10-yr yield is down six basis points to 1.37%, WTI crude futures are down 2.6% to $73.20/bbl, and copper futures are down 0.7% to $4.25/lb.
The real estate sector (+0.5%) was the only sector trading higher while Apple (AAPL) and Amazon.com (AMZN) were drawing support from the lower interest rates.
On a related note, the Pentagon recently scrapped the JEDI cloud award and opted instead for AMZN/Microsoft (MSFT) to share the deal, according to Reuters. AMZN was already up 3% prior to the news.
Regarding oil prices today, WTI crude futures reached a six-year high above $76 per barrel after OPEC+ did not reach an agreement for further supply increases. The view was that rising demand, coupled with no changes in supply, would drive upwards pressure in prices but now there is speculation that producers will still increase production to capitalize off the higher prices.
Separately, DiDi Global (DIDI) was leading U.S.-listed Chinese stocks lower after the Cyberspace Administration of China ordered app stores to take down the company’s app for violations of Chinese laws and regulation. DIDI shares are down 20% at the NYSE.
The ISM Non-Manufacturing Index for June decreased to 60.1% (consensus 63.0%) from a record-high 64.0% in May. The dividing line between expansion and contraction is 50.0%. The June reading marks the thirteenth straight month of growth for the services sector.
