D&D Note (7.7.2022) ~ S&P 500 Notches First Four-Day Rally this Year ~
Stocks continued yesterdays rally throughout todays session and closed near the highs of the day. This was the first time this year the S&P 500 notched a four-day winning streak.
Semiconductor stocks got a lift today following Samsung’s “better than feared” revenue guidance lifting the basket of chip stocks on the day.
Energy stocks rally after oil moved back above $100 a barrel.
Goldman Sachs slashes GDP forecast for the US in the second quarter to barely positive at 0.7% down from expectations of a 1.9% increase.
FED member Waller and Bullard both back another big interest rate hike in July.
FED Governor Christopher Waller saying, “I’m definitely in support of doing another 75 basis point hike in July, probably 50 in September.”
St. Louis FED President James Bullard said, “I think it would make a lot of sense to go with the 75 at this juncture. I’ve advocated and continue to advocate getting to 3.5% this year, then we can see where we are and see how inflation’s developing at that point.”
Mortgage rates get some relief falling 5.3% in the biggest one-week decline since 2008.
Both the 2 Year Note and 10 Year Note see yields back at or above 3% but still have an inverted curve but slightly less inverted.
Gasoline futures have dropped more than 10% this week which could mean some price relief at the gas pump. The national average for a gallon of gas is $4.75 and in California the average is $6.185.
26% of concertgoers say they plan to take on debt to attend shows this summer.
UK Prime Minister Boris Johnson resigns after a wave of resignations.
Crypto billionaire Mike Novogratz says that most of the carnage in crypto is done, but prices could be stuck around here for awhile.
Stock Specific News:
Virgin Galactic Holdings gained 13% today after announcing a partnership with Boeing subsidiary Aurora Flight Sciences to build aircraft “motherships” for the coming spacecraft fleet.
Bed Bath & Beyond soared 27% after a disclosure showing insider purchases including the CEO Sue Grove’s purchase of 50,000 shares.
Otis Worldwide the elevator manufacturer fell today after being downgraded by JPMorgan to neutral and price target cut to $62 from $100.
SoFi gained today after Mizuho reiterated their buy rating citing the company can weather a recession better than peers.
Deere upgraded to buy at Citi citing the farming machinery company is ‘attractive’ even in an economic downturn.
D&D bought more Devin Energy today after the stock looks to be retaking technical support.
Closing Markets (as of 1:15pm PST)
DOW up 1.12%
S&P 500 up 1.50% (3,902.62)
NASDAQ up 2.28%
VIX down -2.73% to 26.00
2 Year Note up 2.25p to 3.03%
10 Year Note up 7.40bp to 3.00%
Oil up 3.836% to $102.31 a barrel.
Gold up 0.156% to $1739.20 an ounce.
Bitcoin up 6.49% to $21,593.23
Ethereum up 7.61% to $1,237.31
~ Dave James / Principal Trader and Market Strategist