US Stocks Jump. S&P 500 Back Above Key Technical Level
4:10 pm Monday, June 21st, 2021
U.S. stocks jumped sharply Monday, with the Dow soaring almost 600 points as it tried to rebound from its worst week since October.
The bullish price action has taken the S&P 500 back above its 50-day moving average (4183) after it closed below the key technical level last Friday. Given that this level has proven to be a strong measure of support over the past 14 months, and there were no market-moving news today, technical factors and a fear of missing out are likely driving the action today.
Every sector in the benchmark index is trading higher, including energy (+3.1%), financials (+1.9%), materials (+1.9%), and industrials (+1.9%) with 2-3% gains after falling between 3-6% last week. The consumer discretionary sector (+0.7%) trails with a decent 0.7% gain.
Bank stocks were fueling the strength of the financial sector amid some curve-steepening activity, caused by selling in longer-dated maturities and buying in shorter-dated maturities. The SPDR S&P Bank ETF (KBE) jumped 3.0%.
Value and cyclical stocks may be the biggest gainers today, but Apple (AAPL) and Microsoft (MSFT), which have a combined market capitalization of nearly $4.2 trillion, were two of today’s most influential gainers. Microsoft is trading at fresh all-time highs on no specific news catalysts.
On the downside, NVIDIA (NVDA) and Advanced Micro Devices (AMD) were struggling amid reports of falling retail prices in Europe.
U.S. Treasuries began the week on a mixed note, as longer tenors pulled back from Friday’s rally while shorter tenors recovered some of Friday’s losses. The trading day started on a quiet note after the overnight session saw a light flow of data and news. The 10-yr note and the long bond began on their flat lines while the 2-yr note started in the red. However, 10s and 30s began sliding right after the start while shorter tenors bounced off their lows.
