Iran Breakthrough?
The markets appeared to make a U-turn for the better on Thursday on potential progress with Tehran. Also, where’s the beef with the China summit?
That’s a Wrap!
The major domestic equity indices closed flat to slightly lower on Thursday after having tested much lower levels earlier. The S&P 500 and Nasdaq Composite both closed very close to flat on the day. It appears that Washington and Tehran are exploring what would be a phased arrangement that would restore the ability of commercial traffic to navigate the Strait of Hormuz.
Four of the 11 S&P sector SPDR ETFs closed higher, with Communication Services ($XLC) atop the performance tables. The Materials ($XLB) were the big losers. Everpure ($P) was the top-performing stock in the S&P 500, while Gen Digital ($GEN) was the worst.
Though stocks rallied well off of their lows, crude oil did not rally and Treasury debt securities sold off yet again. The U.S. 10-year Note paid 5.19% by day’s end, up 8 basis points.
The big news of the day for single stocks was probably made by Oracle ($ORCL). The stock fell 3.5% after Bloomberg News reported that the company was citing force majeure in order to protect itself from a data center project being built in New Mexico if it is delayed.
Have a good night gang. Dougie, I believe, will be out again tomorrow, but someone else is destined to be here with you as I cannot work through the close tomorrow.
Get some rest, gang and God bless. Zero dark-thirty comes early.
Position: None
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That’s a Wrap
Another day, another record? Sort of.
The S&P 500 managed to set a new all-time intraday record high as well as an all-time record closing high. Why? Inflation, or the lack thereof.
For the month of July, headline PPI printed at +0.0% month over month versus the +0.2% consensus and at +4.7% year over year versus expectations for a +4.9% print. At the core (ex. food and energy), PPI hit the tape at +0.2% month over month versus +0.3% consensus and at +4.2% year over year, even with consensus about down from +4.7% in June.
As it now becomes all but impossible for the Fed to raise short-term rates any time soon, at least not backed by logic, the yield paid by the U.S. two-year Treasury note contracted by 5 BPS to 4.15%, and the yield on the U.S. 10-year note dropped 4 BPS to 4.65%. This pushed equities higher.
The benchmark S&P 500 closed +0.6%, as the Nasdaq Composite gained +0.8%. Eight of the 11 S&P sector SPDR ETFs closed in the green, led by Communication Services ($XLC). Materials ($XLB) led the losers.
Workday ($WDAY) led the S&P 500 higher on takeover rumors. It was the memory trade that ruled the day, though, as SanDisk ($SNDK), Micron ($MU) and Western Digital ($WDC) all had nice days. Cisco Systems ($CSCO) took a beating after posting disappointing guidance along with what looked, otherwise, to be a pretty decent earnings report.
Have a great evening, gang. Dougie will be out again tomorrow and, God willing, I will be back to work through the day with you all. Now, go get some grub and maybe work out a little. Sarge out.
Positions: Long SNDK, MU equity.
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