Stock Market Update

[BRIEFING.COM] The day started a little choppy, but there has been a positive bias through the entire session. Buying increased in recent trading, which has the major indices in a steady climb. The S&P 500 trades 1.6% higher, the Nasdaq Composite sports a 1.4% gain, and the Russell 2000 shows a 1.4% increase. 

The Dow Jones Industrial Average outperforms, trading 2.0% higher, thanks in part to an earnings-related gain in 3M (MMM 123.77, +20.38, +19.7%). Many names that reported earnings since yesterday's close received positive responses, contributing to the upside bias.

Mohawk (MHK 159.57, +25.07, +18.6%), Charter Comm (CHTR 369.58, +54.35, +17.2%), and Norfolk Southern (NSC 248.89, +25.99, +11.7%) are also among the standouts in that respect, leading the S&P 500 and showing double-digit percentage gains.

On the flip side, Dexcom (DXCM 63.30, -44.56, -41.3%) shows the largest decline in the S&P 500 by a huge margin after disappointing FY24 revenue guidance. 

Broad buying activity has all 11 S&P 500 sectors in positive territory with gains ranging from 0.6% (energy) to 2.3% (industrials). 

The price action in Treasuries in another contributing factor in today's buying in the stock market. The 10-yr note yield sit at 4.20% and the 2-yr note yield is at 4.39%. This follows the June Personal Income and Spending Report, which showed some fairly steady behavior in the PCE and core-PCE price indexes on a year-over-year basis and supported the market's belief that the Fed will cut rates in September.

Reviewing today's economic data:

• June Personal Income 0.2% (Briefing.com consensus 0.4%); Prior was revised to 0.4% from 0.5%
• June Personal Spending 0.3% (Briefing.com consensus 0.3%); Prior was revised to 0.4% from 0.2%
• June PCE Prices 0.1% (Briefing.com consensus 0.1%); Prior 0.0%, June PCE Prices - Core 0.2% (Briefing.com consensus 0.2%); Prior 0.1%
  • The key takeaway from the report is that the price indexes didn't worsen on a year-over-year basis (i.e., move higher relative to the prior month). Consequently, they didn't give the market any reason to think the Fed will not cut rates at its September FOMC meeting considering comments from Fed officials, who knew where the May PCE price readings stood, have been teeing up that possibility.
• July Univ. of Michigan Consumer Sentiment - Final 66.4 (Briefing.com consensus 66.0); Prior 66.0
  • The key takeaway from the report is that there weren't any real notable changes in consumer sentiment, which has been rightfully described as guarded as consumers continue to deal with inflation, election uncertainty, higher interest rates, and some softening in the labor market.