The US stock market averages (^DJI, ^IXIC, ^GSPC) opened higher on Thursday as inflation eased in June. The Consumer Price Index (CPI) report showed inflation fell 0.1% from the previous month.
Shauna Smith and Brad Smith monitor stock price reaction to this important inflation data, while Jared Brickle reports on this morning’s sector trends and banking performance ahead of tomorrow’s big bank earnings releases.
For more expert insights and the latest market trends, click here to listen to this entire episode of Morning Brief.
This post Luke Carberry Morgan.
Video Transcript
Let’s look at the opening cross that also occurred here.
The Dow, the Nasdaq Composite and the S&P 500 were trying to make decisions here this morning, but they were more negative than positive, more negative than positive.
After all, they started the day flat with a slight uptick here.
If we look at the Dow Jones Industrial Average, we see that it rose about 5/100 percent immediately after the opening bell.
Well, if you look at the bond market reaction to the 10-year note, it’s about 4, 18 basis points below the 42 level.
A similar reaction is occurring in the 30-year bond market.
Let’s take a look at some of the sector movements and reactions to the CP I print we got this morning.
Real estate materials are leading the way, real estate is the overwhelming leader here today, while it’s only around 1.6%.
Looking back at LA’s history, energy and essential goods have fallen behind. Jared Blier takes a closer look at the movement we’re witnessing.
Jared.
Yeah.
So let’s not forget that the Nasdaq Composite Index, the Nasdaq 100 and the S&P 500 are on fantastic winning streaks.
I think today is the 8th day.
So, right now, we have that balance.
For the last 10 days.
You can see that the S&P is up about 3% so it’s doing pretty well.
I also liked how it highlighted that the yield on the 10-year Treasury note is at its lowest in months.
So let me just show you that graph.
This has important implications as to which sectors are currently doing well.
As you can see, we are actually at the lowest point, maybe three months, but we have certainly come down to this point, and this is kind of a release valve that gives market participants more confidence that the Fed will be able to cut rates sooner or later.
And looking at sector movements, he said the decline in long-term government bond yields is significant.
John, on real estate, you mentioned that real estate is by far the best performing sector, followed by materials and utilities which are the interest rate sensitive sectors, then consumer discretionary which is down and then energy which is the biggest loser down about four-tenths of a percent.
Speaking of winning streaks, I just wanted to grab Tesla quickly.
If I could find one, I think it would be about 17 basis points up, and it would be a Dana 12.
Anyway, that’s what it’s been like for the last 10 days.
We see that it’s increased by 34%.
Well, the big resistance level I’m watching is 300.
It’s a little further than where we just went.
But I would say that until we reach 300, a new resistance point will emerge roughly every 5 points, or $5.
I would also like to say a few words about regional banks.
We’ve seen this intensify in recent days.
This happened this morning.
Let me add up the totals for the last two days and show you.
It’s just kind of interesting.
This is likely another interest rate manipulation.
Well, banks are happy about the Fed cutting interest rates.
So, that’s probably as simple as it gets there.
Let’s look at the major banks as well.
Well, this has been happening for the last two days.
I saw some red there and I see even more red today.
So, JP Morgan is down about 9/10 percent, which seems to show the strength of the bank.
Not big names, but mid-level people.
