The stock market futures are in the red this morning, marking a partial retreat from yesterday’s leap to new records on some major indexes. In pre-market trading, sellers have moved away from technology issues. Shares of market-movers NVIDIA (NVDA), Alphabet (GOOG), and Apple (AAPL) are down in pre-market trading as investors have been taking profits after large run-ups in these stocks over the past few months, causing the NASDAQ and S&P 500 futures to move lower today. Still, other companies showed signs of positive performance, including Dow-30 component Johnson & Johnson (JNJ), which is holding steady after reporting earnings. All told, these circumstances suggest a weak start to the trading day.
The stock market indices started positively yesterday, buoyed by strong earnings from several large companies. These included Dow-30 components United Health (UNH), which reported a strong revenue gain helped by growth at its Optum business. Elsewhere, financial giant Bank of America (BAC) recorded stronger earnings. The major indices trended higher through the day, and the S&P 500 and Dow Jones Industrial Average reached all-time highs just before the closing bell. Overall, the S&P 500 finished higher by 35 points (up 0.64%), the NASDAQ increased by 37 points (up 0.20%), and the Dow Jones Industrial Average ended higher by 743 points (up 1.85%). Market breadth was very positive, with advancers outpacing decliners by a 4.2-to-1.0 ratio. Most stock market sectors finished in the green yesterday, with industrials performing the best. However, technology issues were among the weakest, with traders moving away from stocks that were heavy winners of the past year.
In commodity news, oil prices dropped early yesterday before recovering a bit. Elsewhere, U.S. Treasury bond yields fell in the early portion of the trading session as traders speculated that monetary policy would ease in the coming months. Additionally, short-term rates declined more than those with longer durations. Gold futures prices reached a record high, eclipsing $2466.40per ounce, as markets have been pricing in easing monetary policy through interest rate cuts. The Chicago Board Options Exchange Volatility Index, or VIX, commonly known as the fear index, held steady yesterday, suggesting little change in trader sentiment concerning future stock price volatility.
A few economic reports are slated for release in the days ahead. These include initial jobless claims and the Philadelphia Fed Manufacturing Survey for July on Thursday. Friday’s calendar lacks any major reports. However, several regional Federal Reserve Presidents will give remarks on the economy in the coming days, which could provide further insight into the timing of future changes in U.S. monetary policy. Earnings season will continue at full tilt with many prominent companies reporting second-quarter results, including several larger banks and Netflix (NFLX) after the close tomorrow. - John E. Seibert III
At the time of this article’s writing, the author held positions in one or more of the companies mentioned.
CLICK HERE for more information on our services or call 1-800-VALUELINE (1-800-825-8354). Our account managers are available Monday through Friday, 8:00 AM to 6:00 PM Eastern Time.
