Stocks didn’t move much Tuesday, nor did they move in the same direction. But investors provided just enough buying action to keep the major indexes in the green – and to keep the Nasdaq Composite and S&P 500 aloft in record territory.
Most notable among Tuesday’s upbeat news was a surge in the Conference Board’s index of consumer confidence, which jumped to 127.3 in June from 120.0 in May, marking its highest reading since February of last year.
“Consumers’ assessments of both the present situation and short-term outlook improved, likely aided by re-opening measures, low case counts and expectations of a return of activity to pre-pandemic levels,” says Barclays economist Pooja Sriram.
Financial stocks were a mixed bunch amid a slew of dividend increases.
Investment banks in particular enjoyed share-price gains after hiking their payouts. Morgan Stanley (MS, +3.4%) doubled its dividend to 70 cents per share, while Goldman Sachs (GS, +1.1%) announced a 60% hike to $2 per share. Mega-banks, however, saw their stocks decline, even after giving generous raises of their own. Wells Fargo (WFC, -2.2%) doubled its dividend to 20 cents per share, and Bank of America (BAC, -1.6%) authorized a 16.7% raise to 21 cents per share. Citigroup (C, -2.6%), meanwhile, left its payout untouched.
The Nasdaq closed 0.2% higher to a record 14,528. The S&P 500 finished up marginally, by a mere point, but it was enough for a new high of 4,291. The Dow Jones Industrial Average also finished with a minimal gain to 34,292.
Other action in the stock market today:
- The small-cap Russell 2000 declined by 0.6% to 2,308.
- Skyworks Solutions (SWKS) jumped 4.5% today after Citi (Neutral) put the semiconductor name on “positive catalyst watch.” The research firm cited its supply chain checks which show higher-than-expected next-gen iPhone builds. SWKS makes 5G-enabled components for smartphones and other devices. Citi maintained a $182 price target; SWKS closed Wednesday at $190.95.
- Several homebuilder stocks gained ground after the latest S&P CoreLogic Case-Shiller Index showed home prices spiked 14.6% year-over-year in April. Among those finishing in the green today were Lennar (LEN, +0.8%), D.R. Horton (DHI, +1.0%) and PulteGroup (PHM, +2.0%).
- U.S. crude oil futures eked out a marginal gain to settle at $72.98 per barrel.
- Gold futures slipped 1% to end at $1,763.60 an ounce – their lowest finish since April.
- The CBOE Volatility Index (VIX) improved by 1.8% to $16.05.
- Bitcoin prices jumped 5.6% to $36.399.70. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.
What’s Ahead in This Bull Market’s Next Stage?
The Wells Fargo Investment Institute reminds us that we’re not just at the midpoint of the year – we’re also in year two of a new bull market. And their forward-looking sector strategy could be easily summed up as “second verse, same as the first.”
Says WFII: “In the first year of this new equity bull market, our sector guidance shifted to include favorable ratings on economically sensitive sectors, such as Financials, Industrials, and Materials, and we have upgraded the energy sector to favorable. … Cyclical sectors historically have maintained leadership in the second year of bull markets, and we expect similar relative outperformance early in this cycle.”
We’ve recently outlined potential second-half winners in several of these sectors – this short list of industrial stocks, for instance, or this group of 10 energy picks that could thrive amid continued high oil prices.
You also can find plenty of potential in a number of plays highlighted at the very beginning of the year. Our 21 best stocks for 2021 are looking good so far, outperforming the market by roughly 2 percentage points at a recent check. And they still look good, as many of the same catalysts that made them attractive initially – global vaccination against COVID, reheating economies and a resurgence of corporate earnings – are still in play.
Check out the full list by clicking the link above, and see how each is faring as we hit 2021’s midpoint.