Another Day, Another Milestone… A day after the S&P finally notched its inevitable new all-time high, US equities are back at again today, with (surprise, surprise) Tech and Media near the top of the leaderboard as Apple (AAPL +0.9%) secures its own landmark achievement by temporarily surpassing the $2T market cap line (in honor the occasion, the chart below presents the latest Apple “stat of the day”).  Retail earnings are once again in focus, with Target (TGT +12%) and Lowe’s (LOW +0.5%) each putting up their own blowout numbers but actually holding onto their trading gains unlike Walmart and Home Depot yesterday. On the other end of the Retail spectrum, a less glamorous showing from TJX (-4.7%) is dragging on fellow apparel/provider Ross Stores (ROST -3.7%) ahead of its numbers tomorrow. Semis are treading water with Nvidia set to report after the close, while Energy sits in the red with Crude coming off following disappointing inventory data. Copper is higher, breaking through resistance at 300.

Going Streaking… A good ole’ fashioned risk-on session has the S&P knocking on the door of a new all-time high, as well as its first string of 8 consecutive green days for just the fifth time in 10 years. Rotation is again the word of the day, with Cyclicals/Value powering higher and Tech/Defensives making up the bottom of the sector table on word of Russia’s “approved” Covid vaccine. Some signs of caution are showing through the early morning exuberance however, as some of the highest-flying Travel & Leisure names have been reined in and Software/Media have recovered to help the Nasdaq muscle its way back towards positive territory as it tries to avoid its first 3-day losing streak since March; perhaps some hesitation is warranted given the questionable nature of the vaccine news and the fact that Trump’s proposed capital gains taxes remain up in the air. Still, the 10-year Treasury yield has remained at multi-day highs, receiving an extra boost from warmer than expected PPI data. Gold is unable to shake its weakness, with profit taking instinct overshadowing the early signs of inflation.  

Summer Snooze… A busy weekend of news but a somewhat sleepy response from the US equities feels about on par for mid-August, especially as earnings wind down. Futures hanging in the green this morning despite the continued simmering of US/China tensions shows the saga remains in the backseat relative to the virus recovery story, but Tech continues to show signs of fatigue just as its carried the S&P to within a stone’s throw of its all-time high. Accordingly Software, Media, and Semis have been among the worst performing sectors throughout the morning, and are responsible for the S&P’s brief foray into the red (Nasdaq still lagging there). That’s left investors to once again rummage around the value/cyclical bin with Transports, Industrials, and Banks all outperforming along with Energy which is getting a boost from Crude strength after Saudi Aramco presented an upbeat picture of improving demand. Small-caps’ mojo has also rolled over from last week’s performance that saw the Russell 2000 gain +6% (IWM +1.2% today) and clear the crucial June high. Still, perspective is important, and despite the signs of rotation over the last 2-3 weeks it’s too early to say the longer trend of growth/Tech outperforming the S&P while small caps/Value underperform has seen any meaningful change. See the chart of Nasdaq 100 and Russell 2000 Value Index both relative to S&P below:

Surprise Spoiled… President Trump’s “prediction” came true, but despite a “big” July NFP number this morning, US indices find themselves trading modestly in the red into the afternoon. Perhaps elevated expectations cued up by the improved ADP payrolls yesterday did take some of the shine off NFPs, but speculation that the improving jobs picture might further solid the Congressional stalemate of further unemployment relief (the two sides are reportedly remain far apart amid on meeting ongoing now) has also created reason for pause. Trump’s latest TikTok/TenCent targeting has US-China tensions in the mix as well, though the S&P clinging to most of its over +2% weekly gain suggests the back-and-forth is still a clear second fiddle to the virus/recovery narrative. Transports top the sector table with UPS (+7.3%) and Fedex (FDX +6.0%) leading the charge on word they are planning to raise holiday shipping fees as deliveries surge; otherwise Banks / Insurance are doing a bit of catching up, while Tech/Semis are taking a well-deserved breather, while Gold, Oil and Copper all give back some recent gains. Of course should a stimulus deal announcement come through before 4pm, things could be looking a lot rosier heading into the weekend…

Forward March… US stocks are on a roll, with expectations that Congress will eventually strike a deal on further unemployment benefits aiding the S&P in its quest to go 4/4 on green days dating back to last Thursday’s mega-cap earnings dump. Somewhat of a different flavor to the rally today with Materials, Cap Goods, and Banks outperforming while Tech/Semis takes more of a backseat (though DIS +8.8% after its earnings has worked its magic on the Media space). Unsurprising given value has been the usual victor on vaccine news flow days (more on that below), but that hasn’t stopped the Nasdaq from eyeing a new ATH as well. The optimistic tone has the 10-year Treasury yield continuing to edge higher after notching multi-month lows, also buoyed by word the US Treasury plans to increase auction sizes for longer-dated bonds. Oil and Copper are also nudging higher, while Gold continues to soar after cracking 2k yesterday.

When’s the Bell Again?…  An uneasy slide into the weekend for US stocks, as even a monstrous earnings showing from the four FANG horseman of the Tech-pocalypse (FB +7.5%, AMZN +3.7%, AAPL +7.2%, GOOGL -5.2%) hasn’t been enough to stem the nervousness that began to creep in yesterday. With Congress unable to reach a deal on unemployment relief on the day current benefits are set to expire, Florida posting a fourth consecutive day of record virus deaths, and jobless claims suggesting the unemployment rebound may be slowing, there’s plenty to have investors looking to take a little risk off on a Friday. The sector table is a tale of two economies, with Tech, Retail, and Media all outperforming thanks to you know who, and pretty much everything else in the red with Autos / Transports / Energy in the basement. For all the talk of S&P concentration in FAAMG, it seems the mega-caps can’t save the day if everything else is pulling the other direction….

Drumroll Please…  A special “late” edition of the View at Two as the FOMC just released their policy decision. After all the anticipation, the statement came in pretty much as expected: the 0-0.25% benchmark rate was of course maintained (and will stay that way until the committee is confident in the economy has recovered) and the Fed will continue to increase its asset holdings at the current pace. Overall a dovish statement, with plenty of caution around the virus determining the course of recovery and acknowledging economic activity / unemployment are well below Jan 1 levels. The announcement hasn’t garnered much market response at all: stocks remain near the highs of the day, and Treasury yields and gold are all little changed from earlier levels though the dollar is slipping a bit – perhaps the upcoming press conference will spur more reaction, but for now the statement is being taken as “inline”

Summer Stumble… US indices have continued to slide lower heading into the afternoon as the S&P is on track to break its streak of 4 consecutive green sessions. China tensions still aren’t drawing much concern, but with Microsoft (MSFT -3.4%) leading Tech lower and without any fresh vaccine news to lean on, the weakness has picked up a bit over the last hour. Signs of sputter in the labor market have also put a dent in sentiment after initial jobless claims rose for the first time since March, reminding that stocks’ successful V-shape recovery isn’t necessarily mirrored in the real economy.

A Healthier Shade of Green?… Another day of gains for US stocks as vaccine hopes and stimulus talks seem to always strike the right tune for investors these days. The sector chart looks a bit different today however, with cyclical/value sectors like Energy, Banks, and Cap Goods, leading the charge this time in contrast with yesterday’s “Tech-splosion” (shockingly not in the dictionary!). Tech taking a break feels like a good thing too as yesterday’s vaccine news = buy stay-at-home stocks logic was a bit puzzling and of course the ever-present debate on whether the NDX’s rocket ship ride is “healthy” rages on. But while recent blips of rotation are a welcome sign of “reopening” optimism, a look at the chart below mapping relative performance of growth and value in the US and EU reminds it’s all hardly put a dent in any value recovery… Crikey! Look at the jaws on that one…

Viva La Vaccine… Hope is in the air and stocks are in the green, as encouraging preliminary vaccine data from Moderna (MRNA +5.3%) and similar optimism around the AstraZeneca / Oxford vaccine (AZN +7.3%) have sparked belief that help is on the way. Value is the victor thus far (RTY above its 200-DMA), with dreams of a post-Covid world causing investors to take another look at the spaces most beaten down by the virus (Hotel/Leisure, Transports, Banks outperforming). The “weighting game” is to blame for US indices being held at bay, as the big boys of Tech (NYFANG -0.4%) act as a drag along with Semis (SOX -0.6%) amid the rotationary action and as China tensions continue to boil up.