6/10/20 Market Notes
Markets finished mixed on Tuesday in the wake of last weeks’ better than expected jobs report as investors took pause from a rally fueled by government stimulus and central bank liquidity. The S&P 500 shed 25 points (0.8%) to 3,207, the Dow Jones Industrial Average dropped 300 (1.1%) ending the session at 27,272, and Nasdaq advanced 29 points (0.3%) to a new high of 9,954, crossing briefly over 10,000 for the first time in history. Investors booked profits in the more beaten up sectors and industries that led May’s rally, shifting capital to sectors with better fundamentals; and to the sidelines in Treasuries, pushing the yield on the US Ten Year Note to 83 basis points. Gold and Oil prices also increased. Information Technology (+0.48%) and Communication Services (+0.18%) sectors finished in positive territory; while Financials (-2.11%), Utilities (-2.12%), Industrials (-2.51%) and Energy (-3.59%) led the decliners. The Dollar bucked the correlation with other safe haven assets; declining for the 11th straight session against a basket of six major currencies. This morning’s release of the OECD’s not surprisingly negative outlook for member countries’ economies predicts consolidated contraction between 5 and 7.5% among members, with the high-end being more likely if a second virus wave materializes; which, according to the report, is as plausible as continued improvement on the virus front. The report also cautioned that reigning in government stimulus too early would have an unfavorable impact on recovery and growth. European markets and US equity futures are down this morning as traders and investors wait for tells from the Fed on the future of accommodative policies and further stimulus after last Friday’s surprisingly upbeat unemployment assessment. On the virus front, US cases increased by the slowest pace since March; though Dr. Anthony Fauci warns that the threat is far from over. Reopenings continue with New Jersey Governor Phil Murphy lifting the stay-at-home order and declaring the state reopen for business. Many New York regions enter phase two of Governor Cuomo’s staged reopening plan today, including Rockland County and Long Island; allowing salons to reopen and restaurants to offer outdoor dining.
Disclosures: This market commentary is written by the 1879 Advisors® and represents the views of 1879 Advisors®. This commentary is not investment advice and should not be used as a basis to make investment decisions. Please consult with your registered investment advisor before making any investment decisions.