Updated: 07-06-2020

The Market at 04:20PM ET
Dow: +459.67… | Nasdaq: +226.02… | S&P: +49.71…
NASDAQ Vol: 4.5 bln… Adv: 2188… Dec: 1170…
NYSE Vol: 1.1 bln… Adv: 2057… Dec: 899…

Moving the Market

-- Tech stocks driving Nasdaq to new records

-- Chinese state media suggested fostering a bull market should be a priority for the Chinese economy 

-- ISM Non-Manufacturing Index for June returns into expansionary territory

-- M&A activity 

Sector Watch
Strong: Communication Services, Consumer Discretionary, Information Technology, Financials
Weak: Utilities, Real Estate, Energy

04:20PM ET

[BRIEFING.COM] The S&P 500 rose 1.6% on Monday in a bullish start to the week, but it was the Nasdaq Composite (+2.2%) and Dow Jones Industrial Average (+1.8%) that gained the advantage today. The Nasdaq closed at another record high, while the Russell 2000 underperformed the large-cap indices with a 0.8% gain. 

Ten of the 11 S&P 500 sectors finished in positive territory, including the consumer discretionary (+3.2%), communication services (+2.2%), financials (+2.0%), and information technology (+1.8%) sectors atop the standings. The utilities sector (-1.3%) was the lone holdout with a 1.3% decline. 

The positive bias was ignited overseas when a front-page editorial in one of China's state-run news outlets implied that a "healthy bull market" was imminent. China's Shanghai Composite surged 5.7% on Monday. The U.S. stock market saw a noticeable bump after the ISM Non-Manufacturing Index for June returned to expansionary territory with a 57.1% reading (Briefing.com consensus 49.0%).

It was largely a momentum trade rooted in recovery optimism and a fear of missing out, but the market drifted mostly sideways after the ISM report, which was released at 10:00 a.m. ET. The market was supported heavily by mega-cap, and momentum, stocks, including Amazon (AMZN 3057.04, +166.74, +5.8%) and Tesla (TSLA 1371.58, +162.92, +13.5%). 

In the energy space, Dominion Energy (D 73.59, -9.10) shares fell 11.0% following a pair of noteworthy actions. The company agreed sell its natural gas assets to Berkshire Hathaway (BRK.B 182.72, +3.89, +2.2%) for $4 billion in cash, which will also assume $5.7 billion in debt, and announced the cancellation of the Atlantic Coast Pipeline that was jointly owned by Duke Energy (DUK 79.81, -2.03, -2.5%).

This was Warren Buffet's first major deal during the pandemic, but it wasn't as alluring as Uber (UBER 32.52, +1.84, +6.0%) agreeing to acquire Postmates for $2.65 billion.

Headlines about the daily record in new coronavirus cases in the U.S. remained in the news, but the market remained steadfast in the view that a growing cooperation in mask-wearing and increased testing would slow the outbreak. On a related note, Regeneron Pharma (REGN 627.25, +4.80, +0.8%) said it started a Phase 3 trial for its COVID-19 antibody treatment.

U.S. Treasuries finished slightly lower in a tight-ranged session. The 2-yr yield increased one basis point to 0.16%, and the 10-yr yield increased two basis points to 0.68%. The U.S. Dollar Index declined 0.4% to 96.75. WTI crude declined 0.2% to $40.51/bbl.

Reviewing Monday's economic data: 

  • The ISM Non-Manufacturing Index for June increased to 57.1% (Briefing.com consensus 49.0%) from 45.4% in May. A reading above 50.0% connotes an expansion in activity. June represented the first month of expanding activity since March.
    • Survey responses reflect changes, if any, in the current month compared to the previous month. The key takeaway, then, is that the June report can't be taken at face value as a "strong" report so much as it can be taken as a report showing stronger activity relative to the depressed activity in May.

Looking ahead, investors will receive the JOLTS - Job Openings report for May on Tuesday.

  • Nasdaq Composite +16.3% YTD
  • S&P 500 -1.6% YTD
  • Dow Jones Industrial Average -7.9% YTD
  • Russell 2000 -13.5% YTD
Dow: +459.67… | Nasdaq: +226.02… | S&P: +49.71…
NASDAQ Adv/Dec 2188/1170. …NYSE Adv/Dec 2057/899.

03:25PM ET

[BRIEFING.COM]  The S&P 500 is up 1.3% as it continues to drift sideways. 

One last look at the S&P 500 sectors shows consumer discretionary (+2.7%), financials (+1.9%), communication services (+1.8%), and information technology (+1.6%) continuing to outperform the benchmark index. The utilities sector (-1.6%) remains an eyesore with a decline nearing 2%. 

WTI crude futures decreased $0.07 (-0.2%) to $40.51/bbl. 

Dow: +363.92… | Nasdaq: +201.26… | S&P: +40.53…
NASDAQ Adv/Dec 2147/1201. …NYSE Adv/Dec 1923/1044.

03:00PM ET

[BRIEFING.COM] The market continues to trade sideways after recording its best levels of the day in early action. The S&P 500 is up 1.2% while the Russell 2000 underperforms with a 0.7% gain.

The news flow has dried up this afternoon, leaving many investors thinking what's next for the market. Since its close on June 26, the S&P 500 has gained 5.3%, including today's advance, which would presumably mean it's due for some sort of consolidation. The market has surprised many, though, and the next level to watch is around the 3230 level. 

That would take the S&P 500 flat for the year, and it last touched these levels in early June. 

Dow: +361.55… | Nasdaq: +194.70… | S&P: +40.40…
NASDAQ Adv/Dec 2140/1203. …NYSE Adv/Dec 1942/976.

02:30PM ET

[BRIEFING.COM] The major averages faded off their levels from half an hour ago with the S&P 500 (+1.24%) now in last place.

S&P 500 constituents Freeport-McMoRan (FCX 12.54, +1.04, +9.04%), Xilinx (XLNX 101.13, +5.84, +6.13%), and Chipotle Mexican Grill (CMG 1,112.30, +55.85, +5.29%) are among today's best performers. This morning, Freeport announced an update to business operations amid the COVID-19 pandemic, an update which was obviously taken well by investors. Xilinx was added to Goldman's Conviction Buy List this morning, and Chipotle topped all-time highs.

Conversely, ONEOK (OKE 28.44, -3.71, -11.54%) is the worst performer in the index with the energy complex showing relative weakness today.

Dow: +352.96… | Nasdaq: +179.78… | S&P: +38.70…
NASDAQ Adv/Dec 2102/1241. …NYSE Adv/Dec 1937/989.

02:00PM ET

[BRIEFING.COM] The DJIA (+1.60%) crept slightly higher in the last half hour, now pulling into second place on the day.

Gold futures settled $3.50 higher (+0.2%) to $1,793.50/oz, paring more aggressive opening gains as the broader market has held up its solid gains this afternoon.

The U.S. Dollar Index sheds about 0.4% to 96.74.

Dow: +413.31… | Nasdaq: +208.06… | S&P: +45.66…
NASDAQ Adv/Dec 2228/1101. …NYSE Adv/Dec 2067/863.

01:35PM ET

[BRIEFING.COM] The majors have bucked up a bit in recent action, though still hold within their daily ranges, with the DJIA (+1.42%) still at the back of the pack.

A look inside the Dow Jones Industrial Average shows that Goldman Sachs (GS 206.84, +9.44, +4.78%), Walgreens Boots Alliance (WBA 43.26, +1.28, +3.05%), and Apple (AAPL 373.57, +9.46, +2.60%) are outperforming.

Conversely, retail giant Walmart (WMT 118.74, -0.47, -0.39%) again sits at the bottom of the index.

The DJIA still stands 5.02% lower off the recent June 8 high, but has recouped a cool 43.82% off the March 23 low.

Dow: +366.74… | Nasdaq: +216.11… | S&P: +45.00…
NASDAQ Adv/Dec 2156/1162. …NYSE Adv/Dec 1979/925.

12:55PM ET

[BRIEFING.COM] It's another strong outing for stocks, especially technology-related stocks within the Nasdaq Composite (+2.2%). The Nasdaq is trading at a record high and is now up more than 16% this year, while the S&P 500 (+1.4%), Dow Jones Industrial Average (+1.3%), and Russell 2000 (+0.8%) continue to recoup yearly losses. 

The impetus for today's gains has been attributed to some bull-market commentary from a Chinese state-run editorial. China's Shanghai Composite climbed 5.7% on Monday. In the U.S., recovery optimism has been aided by the ISM Non-Manufacturing Index for June, which returned into expansion territory with a 57.1% reading (Briefing.com consensus 49.0%). 

Most stocks are trading higher today, but the most influential gains continue to come from the mega-cap and momentum stocks within the S&P 500 consumer discretionary (+2.4%), information technology (+2.0%), and communication services (+2.1%) sectors. The utilities (-1.7%) and energy (-0.3%) sectors trade lower. 

Some prime stock movers include Amazon (AMZN 3018.50, +12.20, +4.4%), Apple (AAPL 374.69, +10.59, +2.9%), Microsoft (MSFT 210.70, +4.44, +2.1%), Netflix (NFLX 495.76, +18.97, +4.0%), and Tesla (TSLA 1326.13, +117, 13, +9.7%) -- all of which are trading at fresh all-time highs.

In the energy space, Berkshire Hathaway (BRK.B 182.07, +3.24, +1.8%) agreed to acquire Dominion Energy's (D 73.97, -8.72, -10.6%) natural gas assets for $4 billion in cash and assume its debt for $5.7 billion. Dominion also announced the cancellation of the Atlantic Coast Pipeline with Duke Energy (DUK 79.20, -2.63, -3.2%). 

Separately, Uber (UBER 32.54, +1.86, +6.1%) announced an agreement to acquire Postmates for $2.65 billion in stock. UBER shares are up 6%. 

U.S. Treasuries are holding relatively steady, with the 10-yr yield up one basis point to 0.69%, despite the bullish bias in stocks. Investors might be skeptical of the sustainability of the gains, thinking that a pullback is due. The CBOE Volatility Index is up 0.7% to 27.87. 

Reviewing today's economic data: 

  • The ISM Non-Manufacturing Index for June increased to 57.1% (Briefing.com consensus 49.0%) from 45.4% in May. A reading above 50.0% connotes an expansion in activity. June represented the first month of expanding activity since March.
    • Survey responses reflect changes, if any, in the current month compared to the previous month. The key takeaway, then, is that the June report can't be taken at face value as a "strong" report so much as it can be taken as a report showing stronger activity relative to the depressed activity in May.
Dow: +343.46… | Nasdaq: +225.24… | S&P: +44.20…
NASDAQ Adv/Dec 2089/1219. …NYSE Adv/Dec 1877/998.

12:25PM ET

[BRIEFING.COM] The S&P 500 is up 1.3%, while the Nasdaq trades higher by 2.0%. 

Looking at the FAANG stocks shows green across the board. Apple (AAPL 373.70, +9.59, +2.7%), Amazon (AMZN 3012.33, +122.28, +4.2%), and Netflix (NFLX 496.56, +19.34, +4.1%) are trading at new all-time highs with noticeable gains. Alphabet (GOOG 1495.17, +30.47, +2.1%) and Facebook (FB 238.29, +4.91, +2.1%) follow suit.

Interestingly, the CBOE Volatility Index is up 0.5% to 37.83 and is not trading lower as some might have expected with the bullish bias in stocks. Investors might be thinking that a pullback is due. 

Dow: +332.58… | Nasdaq: +204.34… | S&P: +40.96…
NASDAQ Adv/Dec 2124/1174. …NYSE Adv/Dec 1905/969.

11:55AM ET

[BRIEFING.COM] The S&P 500 continues to trade higher by 1.6%. The semiconductor space has been an area of relative strength, with the Philadelphia Semiconductor Index up 2.9%.

Most semiconductor components are trading higher, except Intel (INTC 59.05, -0.08, -0.1%), which was downgraded to Sell from Neutral at Goldman Sachs. The broader space evidently has not been pressured by Intel's downgrade. 

Overseas, the major European indices closed firmly higher. Germany's DAX gained 1.6%, UK's FTSE gained 2.1%, and France's CAC gained 1.5%. The Europe Stoxx 600 advanced 1.6%. 

Dow: +377.05… | Nasdaq: +250.47… | S&P: +49.40…
NASDAQ Adv/Dec 2200/1085. …NYSE Adv/Dec 1960/918.

11:25AM ET

[BRIEFING.COM] The S&P 500 is back at session highs with a 1.6% gain. Leadership is coming from cyclical and mega-cap stocks. 

Shares of Walt Disney (DIS 113.12, +0.94, +0.8%) are underperforming today despite Variety reporting a 72% increase in Disney+ downloads over the weekend following its "Hamilton" listing. The Washington Post published an interesting story on the challenges facing the company. 

Separately, Dominion Energy (D 76.28, -6.42, -7.8%) and Duke Energy (DUK 79.57, -2.27, -2.8%) announced this morning the cancellation of the Atlantic Coast Pipeline due to ongoing delays and increasing cost uncertainty that threaten the economic viability of the project. Shares of both companies are trading lower. 

Dow: +370.01… | Nasdaq: +245.18… | S&P: +49.57…
NASDAQ Adv/Dec 2283/983. …NYSE Adv/Dec 2077/801.

10:55AM ET

[BRIEFING.COM] The S&P 500 is up 1.5% amid gains in most sectors, except the utilities sector (-1.0%).

Shares of Tesla (TSLA 1301.53, +92.93, +7.7%) continue to hit new highs, rising nearly 8% after JMP Securities raised its price target on TSLA to $1500 from $1050. In addition, the company continues to dabble with limited product drops, selling short shorts for $69.42 yesterday -- a job at those who are short the company while also having a little fun with the price. 

Apple (AAPL 374.36, +10.25, +2.8%), Amazon (AMZN 2998.44, +108.14, +3.8%), and Microsoft (MSFT 209.93, +3.68, +1.8%) are also trading at fresh all-time highs and are providing heavy support for the major indices. 

Dow: +378.77… | Nasdaq: +216.64… | S&P: +47.36…
NASDAQ Adv/Dec 2373/881. …NYSE Adv/Dec 2242/624.

10:25AM ET

[BRIEFING.COM] The S&P 500 is currently up 1.3%, coming down slightly from session highs. The Nasdaq is up 1.8% after setting a new intraday high earlier. 

The market has been aided by several events. The first being the bullish note out of a Chinese state-run news outlet that suggested fostering a bull market should be a priority for the Chinese economy. The other positive catalysts have been notable M&A activity and the ISM Non-Manufacturing Index, which was highlighted in the previous comment. 

The initial bullish reaction regarding the M&A activity has been tempered, though. Uber (UBER 31.82, +1.14, +3.7%) shares popped 8% at the open on news that it is acquiring Postmates for $2.7 billion. Dominion Energy (D 77.46, -5.25, -6.4%) shares are down noticeably after agreeing to sell its natural gas assets to Berkshire Hathaway (BRK.B 182.23, +3.40, +1.9%) for $4 billion in cash. 

Dow: +310.08… | Nasdaq: +185.17… | S&P: +40.47…
NASDAQ Adv/Dec 2182/1035. …NYSE Adv/Dec 2144/706.

10:00AM ET

[BRIEFING.COM] The S&P 500 is up 1.6%, and the Russell 2000 is down 2.0%. 

Just in, the ISM Non-Manufacturing Index for June increased to 57.1 (Briefing.com consensus 49.0) from 45.4 in May. A reading above 50.0 denotes an expansion. 

Dow: +412.96… | Nasdaq: +180.61… | S&P: +46.77…
NASDAQ Adv/Dec 2533/677. …NYSE Adv/Dec 2506/328.

09:40AM ET

[BRIEFING.COM] The major indices start the session trading noticeably higher following a strong outing in Asia. The S&P 500 is up 1.3%, the Dow Jones Industrial Average is up 1.3%, and the Nasdaq Composite is up 1.6%. 

Looking at the S&P 500 sectors shows green across the board, led higher by the cyclical sectors that should outperform in a rebounding economy. The financials (+1.9%), energy (+1.7%), and materials (+1.7%) sectors lead in gains, while the utilities sector (+0.8%) underperforms. 

U.S. Treasuries trade slightly lower, pushing yields higher. The 2-yr yield is up one basis point to 0.16%, and the 10-yr yield is up two basis points to 0.70%. The U.S. Dollar Index is down 0.6% to 96.63. WTI crude is down 0.8% to $40.31/bbl.

Dow: +314.07… | Nasdaq: +160.16… | S&P: +41.32…
NASDAQ Adv/Dec 2600/528. …NYSE Adv/Dec 2501/270.

09:16AM ET
[BRIEFING.COM] S&P futures vs fair value: +46.90. Nasdaq futures vs fair value: +147.60.

The stock market is headed for a sharply higher start following a huge rally in Asian equities. The S&P 500 futures trade 47 points, or 1.5%, above fair value.

Notably, China's Shanghai Composite climbed 5.7% after a state-run news outlet suggested that fostering a healthy bull market should be prioritized for the Chinese economy. That's arguably a bullish signal for the global economy, too, given China is the second-largest economy in the world. 

On the home front, Warren Buffet's Berkshire Hathaway (BRK.B 183.10, +4.27, +2.4%) agreed to acquire Dominion Energy's (D 80.55, -2.14, -2.6%) natural gas assets and debt for approximately $10 billion. Uber (UBER 33.07, +2.39, +7.8%) reportedly agreed to acquire Postmates for $2.7 billion in stock.

Although the U.S. continues to hit record daily counts of new coronavirus cases, the market is optimistic that more mask-wearing and testing can slow down the spread. Medical progress toward a vaccine and therapeutics continues to be made, too. Regeneron Pharma (REGN 641.00, +18.55, +3.0%) said it's starting a Phase 3 trial for its treatment and prevention of COVID-19.


08:51AM ET
[BRIEFING.COM] S&P futures vs fair value: +48.60. Nasdaq futures vs fair value: +155.50.

The S&P 500 futures continue to trade 49 points, or 1.6%, above fair value.

Equity indices in the Asia-Pacific region soared on Monday, led by China's Shanghai Composite (+5.7%). An editorial in The Securities Times that said fostering a healthy bull market is now more important than ever for the Chinese economy was the catalyst for the huge move, according to Bloomberg. Hefty retail buying and speculation that the PBOC could ease policy further were added catalysts that overshadowed separate reports that the U.S. could soon announce measures against Beijing for its part in stifling civil liberties in Hong Kong. Australia was the lone holdout Monday, posting a modest loss in the wake of worries about an uptick in coronavirus cases in Victoria and word that the border between New South Wales and Victoria will be closed as of Tuesday.

  • In economic data:
    • Hong Kong's June Manufacturing PMI 49.6 (Prior 43.9)
    • Australia's MI Inflation Gauge 0.6% m/m (Prior -1.2%)

---Equity Markets---

  • Japan's Nikkei: +1.8%
  • Hong Kong's Hang Seng: +3.8%
  • China's Shanghai Composite: +5.7%
  • India's Sensex: +1.3%
  • South Korea's Kospi: +1.7%
  • Australia's ASX All Ordinaries: -0.6%

Major European indices are drafting off the bullish bias that was charging full speed in Asian markets on Monday. Gains are broad based and have been led by cyclical sectors poised to do well in a rebounding economy. Stronger-than-expected retail sales in May for the eurozone have helped boost sentiment along with reports that the UK is considering targeted fiscal stimulus measures and that Germany's Bundesbank is likely to press on with its purchases of sovereign bonds past August. At the same time, ECB President Lagarde warned of the eurozone facing disinflation pressures for a few years while BOE Governor Bailey is said to be prepping banks for the possibility of implementing negative rates as a policy tool.

  • In economic data:
    • Eurozone's May Retail Sales 17.8% m/m (Expected 15.0%; Last -12.1%) and -5.1% yr/yr (Expected -7.5%; Last -19.6%); July Sentix Investor Confidence -18.2 (Expected -10.9; Last -24.8)
    • Germany's May Factory Orders 10.4% m/m (Expected 15.0%; Last -26.2%)
    • Spain's May Industrial Production -24.5% m/m (Expected -18.5%; Last -34.1%); Consumer Confidence 60.7 (Last 52.9)
    • UK's June Construction PMI 55.3 (Expected 47.0; Last 28.9)

---Equity Markets---

  • STOXX Europe 600: +1.5%
  • Germany's DAX: +1.6%
  • U.K.'s FTSE 100: +1.7%
  • France's CAC 40: +1.5%
  • Italy's FTSE MIB: +1.6%
  • Spain's IBEX 35: +2.1%

08:27AM ET
[BRIEFING.COM] S&P futures vs fair value: +49.10. Nasdaq futures vs fair value: +157.00.

The S&P 500 futures trade 49 points, or 1.6%, above fair value. The pre-market gains follow a strong performance last week in which S&P 500 finished higher in every session, inching closer to being flat for the year. 

Reviewing the sector performances in 2020 shows information technology (+14.9%) firmly atop the standings with a 15% yearly gain. Following suit are the consumer discretionary (+8.9%) and communication services (+1.2%) sectors, while the energy (-37.9%) and financials (-25.4%) sectors remain deep in the red. 

Separately, stocks trading lower in pre-market action due to analyst downgrades include Spotify (SPOT 268.94, -2.55, -0.9%) and Intel (INTC 58.87, -0.26, -0.4%). SPOT was downgraded to Underperform from Mkt Perform at Bernstein, while INTC was downgraded to Sell from Neutral at Goldman Sachs. 


07:58AM ET
[BRIEFING.COM] S&P futures vs fair value: +44.40. Nasdaq futures vs fair value: +151.80.

U.S. equity futures are rallying to start the week, as a noteworthy performance in Asian markets and some M&A activity on the home front have outweighed any lingering coronavirus concerns. The S&P 500 futures are up 44 points and trade 1.4% above fair value.

The reported catalyst in Asia was an editorial in The Securities Times, a state-run news outlet in China, which suggested that fostering a healthy bull market is now more important than ever for the Chinese economy. China's Shanghai Composite surged 5.7% on Monday. 

In the U.S., confidence in the outlook has been strengthened by M&A news. Warren Buffet's Berkshire Hathaway (BRK.B 183.38, +4.55, +2.5%) agreed to acquire Dominion Energy's (D 82.60, -0.09, -0.1%) natural gas assets and debt for $10 billion, and Uber (UBER 32.92, +2.24, +7.3%) agreed to acquire Postmates for $2.7 billion in stock, according to Bloomberg

On the data front, investors will receive the ISM Non-Manufacturing Index for June (Briefing.com consensus 49.0) at 10:00 a.m. ET. 

U.S. Treasuries are trading near their flat lines. The 2-yr yield is up one basis point to 0.16%, and the 10-yr yield is up one basis point to 0.69%. The U.S. Dollar Index is down 0.4% to 96.79. WTI crude is down 0.3% to $40.52/bbl.

In U.S. Corporate news:

  • Berkshire Hathaway (BRK.B 183.38, +4.55): +2.5% after agreeing to acquire Dominion Energy's (D 82.60, -0.09: -0.1%) natural gas assets in a $10 billion deal, which also includes approximately $6 billion in Dominion's debt. 
  • Uber (UBER 32.92, +2.24): +7.3% after Bloomberg reported that the company is acquiring Postmates for $2.7 billion in stock. 
  • Tesla (TSLA 1276.00, +67.34): +5.6% in a momentum trade after its price target was raised to $1500 from $1050 at JMP Securities. 
  • Regeneron Pharma (REGN 654.00, +31.55): +5.1% after announcing the initiation of its Phase 3 trial for its COVID-19 treatment. 

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region soared on Monday, led by China's Shanghai Composite (+5.7%). Japan's Nikkei: +1.8%, Hong Kong's Hang Seng: +3.8%, China's Shanghai Composite: +5.7%, India's Sensex: +1.3%, South Korea's Kospi: +1.7%, Australia's ASX All Ordinaries: -0.6%.
    • In economic data:
      • Hong Kong's June Manufacturing PMI 49.6 (Prior 43.9)
      • Australia's MI Inflation Gauge 0.6% m/m (Prior -1.2%)
    • In news:
      • An editorial in The Securities Times that said fostering a healthy bull market is now more important than ever for the Chinese economy was the catalyst for the huge move, according to Bloomberg.
      • Hefty retail buying and speculation that the PBOC could ease policy further were added catalysts that overshadowed separate reports that the U.S. could soon announce measures against Beijing for its part in stifling civil liberties in Hong Kong.
      • Australia was the lone holdout Monday, posting a modest loss in the wake of worries about an uptick in coronavirus cases in Victoria and word that the border between New South Wales and Victoria will be closed as of Tuesday.
  • Major European indices are drafting off the bullish bias that was charging full speed in Asian markets on Monday. STOXX Europe 600: +1.4% Germany's DAX: +1.5% U.K.'s FTSE 100: +1.7% France's CAC 40: +1.5% Italy's FTSE MIB: +1.7% Spain's IBEX 35: +2.3%.
    • In economic data:
      • Eurozone's May Retail Sales 17.8% m/m (Expected 15.0%; Last -12.1%) and -5.1% yr/yr (Expected -7.5%; Last -19.6%); July Sentix Investor Confidence -18.2 (Expected -10.9; Last -24.8)
      • Germany's May Factory Orders 10.4% m/m (Expected 15.0%; Last -26.2%)
      • Spain's May Industrial Production -24.5% m/m (Expected -18.5%; Last -34.1%); Consumer Confidence 60.7 (Last 52.9)
      • UK's June Construction PMI 55.3 (Expected 47.0; Last 28.9)
    • In news:
      • Gains are broad based and have been led by cyclical sectors poised to do well in a rebounding economy.
      • Stronger-than-expected retail sales in May for the eurozone have helped boost sentiment along with reports that the UK is considering targeted fiscal stimulus measures and that Germany's Bundesbank is likely to press on with its purchases of sovereign bonds past August.
      • At the same time, ECB President Lagarde warned of the eurozone facing disinflation pressures for a few years while BOE Governor Bailey is said to be prepping banks for the possibility of implementing negative rates as a policy tool.

07:26AM ET
[BRIEFING.COM] S&P futures vs fair value: +42.90. Nasdaq futures vs fair value: +144.90.

07:02AM ET
[BRIEFING.COM] S&P futures vs fair value: +44.60. Nasdaq futures vs fair value: +146.30.

07:02AM ET
[BRIEFING.COM] Nikkei...22714...+408.00...+1.80%.  Hang Seng...26339...+966.00...+3.80%.

07:02AM ET
[BRIEFING.COM] FTSE...6272.08...+114.90...+1.90%.  DAX...12740.88...+212.70...+1.70%.

04:20PM ET

[BRIEFING.COM] The S&P 500 increased 0.5% on Thursday amid positive labor market data, although it was up as much as 1.6% in early action. The Nasdaq Composite (+0.5%), Dow Jones Industrial Average (+0.4%), and Russell 2000 (+0.3%) also finished near session lows, but the Nasdaq did notch another record close. 

With the market closed on Friday in observation of Independence Day, investors received the Employment Situation Report one day early, and it came in better than expected for the second straight month. It also showed that there was still a lot more re-hiring activity needed to get to where things were before the pandemic.

Briefly, June nonfarm payrolls increased by 4.800 million (Briefing.com consensus 3.50 million), and the unemployment rate improved to 11.1% (Briefing.com consensus 12.6%) from 13.3% in May. Initial jobless claims for the week ending June 27 also decreased slightly to 1.427 million (Briefing.com consensus 1.355 million) for its 13th straight decline.

Every sector in the S&P 500 was on pace to close in positive territory following the data, but a late fade in the market took several sectors into the red. The cyclical materials (+1.9%), energy (+1.1%), and industrials (+0.8%) sectors set the performance pace, while the real estate (-0.3%) and communication services (-0.1%) sectors closed lower. 

The late-day selling was likely due to some profit-taking activity in front of the holiday weekend. At today's intraday high, the S&P 500 was up 5.2% for the week. 

Tesla (TSLA 1208.66, +89.03, +8.0%), however, showed no signs of slowing down after the company pleased investors with its Q2 delivery data. TSLA shares rose 26% this week, including today's 8% gain.   

U.S. Treasuries finished little changed. The 2-yr yield declined one basis point to 0.15%, and the 10-yr yield was unchanged at 0.68%. The U.S. Dollar Index was also little changed at 97.22. WTI crude rose 1.7%, or $0.66, to $40.42/bbl.

Reviewing Thursday's economic data, which featured the Employment Situation Report for June:

  • June nonfarm payrolls increased by 4.800 million (Briefing.com consensus 3.50 million). June private sector payrolls increased by 4.767 million (Briefing.com consensus 3.00 million). June unemployment rate was 11.1% (Briefing.com consensus 12.6%), versus 13.3% in May. June average hourly earnings declined 1.2% (Briefing.com consensus -1.0%) versus a 1.0% decline in May.
    • The key takeaway from the report as far as the market is concerned is that it reflects an economy that is bouncing back from the depths of the COVID-19 shutdown period. There are still far too many people unemployed (17.750 million), yet the June numbers are moving in the right direction.
  • Initial jobless claims for the week ending June 27 decreased by 55,000 to 1.427 million (Briefing.com consensus 1.355 million).
    • The key takeaway from the report is that initial claims remain at an alarmingly high level and will continue to be a drag on economic activity.
  • The Trade Balance report for May showed a widening in the deficit to -$54.6 billion (Briefing.com consensus -$53.0 billion) from a downwardly revised $49.8 billion (from -$49.4 billion).
    • The key takeaway from the report is that exports (-$6.6 billion) and imports (-$1.8 billion) both declined in May, underscoring the adverse impact of the coronavirus on the global economy.
  • New orders for manufactured goods increased 8.0% m/m in May (Briefing.com consensus 7.2%) following a downwardly revised 13.5% decline (from -13.0%) in April.
    • The key takeaway from the report is that it reflects a recovery in new order activity following the depths of the COVID-19 shutdown period.

When the market reopens on Monday, investors will receive the ISM Non-Manufacturing Index for June. 

  • Nasdaq Composite +13.8% YTD
  • S&P 500 -3.1% YTD
  • Dow Jones Industrial Average -9.5% YTD
  • Russell 2000 -14.2% YTD
Dow: +92.39… | Nasdaq: +53.00… | S&P: +14.15…
NASDAQ Adv/Dec 1894/1417. …NYSE Adv/Dec 1810/1099.

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