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Bob Carey
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  US Stock Markets Ended July 2, 2021
Posted Under: Weekly Market Commentary

 
Another week another all-time high for equities as the S&P 500 index closed at 4350 for the first time. Strong economic data coupled with lower odds of a COVID resurgence fueled equity returns. Last month, the change in nonfarm payrolls surprised to the upside with an 850k gain in jobs, compared to expectations of 720k. Additionally, May was revised up 24k additional jobs. In total there was over 150k more jobs than expected at the end of June. The unemployment rate also went up to 5.9%, as more of those out of work are now looking for a job, adding more evidence of a strong economic recovery. Johnson & Johnson announced that their COVID vaccine offers "strong protection" against the more transmissible, but less severe, Delta COVID variant that has been concerning policy makers. Growth bested value last week as the S&P 500 Growth index returned 2.86% compared to 0.44% for the S&P 500 Value index. As the summer driving season heats up WTI Oil passed $75 a barrel for the first time since 2018. Advanced Micro Devices Inc. and Xilinx Inc. were the two top performing names in the S&P 500 last week, after EU regulators granted unconditional approval for their pending merger. Boeing Inc. slumped 4.71% after the FAA said it sees a need for more test flights for Boeing's new 777X wide body plane, potentially delaying their entry into commercial service out to early 2024. Walgreens Boots Alliance Inc. returned -7.65% last week after announcing disappointing quarterly results. Despite beating quarterly earnings and revenue estimates management provided underwhelming forward guidance on their business resulting in their loss. 1H21 is now in the books as the S&P 500 index closed with a 15.24% gain. Looking ahead to the 2H21, we remain constrictive on equities and expect the economic picture to remain strong. A recovering consumer is likely to drive overall equity market expectations. However, the answer to 'just how transitory is the inflation we are seeing?' is likely going to drive which parts of equity markets will outperform the remainder of 2021.
Posted on Tuesday, July 6, 2021 @ 9:29 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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