Day Traders Diary

7/7/21

The major averages rebounded today with the S&P 500 rising to a fresh record as investors poured back into trusty mega-cap technology stocks. The S&P 500 advanced 14 points or 0.35% after snapping a seven-day winning streak in the previous session. The Dow Jones Industrial Average rose 104 points or .3%. The technology-heavy Nasdaq Composite rose just one point after hitting a fresh record shortly after the open.

With rates falling and Wall Street fretting about a peak in economic growth, investors have rediscovered their old Big Tech favorites. Apple and Amazon are both up more than 10% over the past month, far outpacing the S&P 500′s 2.8% return.

Defying many predictions, the 10-year Treasury yield fell to 1.306% on Wednesday. Major technology names like Apple and Google-parent Alphabet rose on Wednesday. Shares of Amazon gained 1% even after the e-commerce giant rallied nearly 5% on Tuesday.

The Federal Reserve's minutes from its June 15-16 meeting, during which it held short-term interest rates near zero but also indicated that it might be adjusting policy otherwise in the months ahead, revealed the central bank discussed tapering but was in no rush to start the process.

Energy stocks were in the red as oil prices fell. WTI crude touched a 6-year high briefly on Tuesday before retreating. Crude was down again on Wednesday. Occidental Petroleum, APA Corp. and Pioneer Natural Resources all dipped more than 2%.

Bank shares including Goldman Sachs and Bank of America continued their retreat on Wednesday as long-term bond yields fell further, hurting the industry's profitability prospects. Yields on the short-end of the so-called Treasury curve, including 1-year bills and 2-year notes, were flat to higher.

During the regular session on Tuesday, the 30-stock Dow fell 208 points. The S&P 500 ended the day down by 0.2%, retreating from a record. The Nasdaq Composite rose nearly 0.2% to a fresh all-time high.

Investors may be worried the economy might be approaching its peak and that a correction could be on the way. In addition to complacency in the market, the combination of profit-margin pressures, inflation fears, Fed tapering and possible higher taxes could contribute to an eventual drawdown, market strategists say.

All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.