Market Performance
The stock market ended the session on an upbeat note. The major indices all closed near their highs of the day, with the S&P 500 above 5,500 for the first time and the Nasdaq Composite at a fresh all-time high. The day started more mixed before an increase in buying activity in the afternoon trade. Market breadth was mixed through most of the session, but advancers had a 2-to-1 lead over decliners at the NYSE and an 11-to-10 lead at the Nasdaq by the close.
Mega Cap Performance
Some mega cap names outperformed through the entire session, adding to gains in the afternoon trade. Tesla (TSLA, Financial) was a standout, jumping 10% after it reported better-than-expected Q2 delivery numbers. Apple (AAPL, Financial), Amazon.com (AMZN, Financial), and Microsoft (MSFT) were also among the influential winners, each hitting a 52-week high today.
Sector Performance
Many stocks participated in the afternoon improvement. The equal-weighted S&P 500 logged a 0.5% gain, and the market-cap weighted S&P 500 rose 0.6%. Only two of the S&P 500 sectors closed with declines: health care (-0.4%) and energy (-0.2%). The consumer discretionary sector (+1.8%) was propelled to the top of the lineup by gains in TSLA and AMZN.
Market Rates and Economic Data
The drop in market rates following solid losses in Treasuries in recent days acted as support for equities. The 10-year note yield dropped four basis points to 4.44%, and the 2-year note yield declined three basis points to 4.74%. This price action followed comments from Fed Chair Powell at the ECB Forum on Central Banking and a JOLTS - Job Openings Report for May, which showed an increase in openings to 8.140 million from a downwardly revised 7.919 million (from 8.059 million) in April. Mr. Powell reiterated that some significant progress has been made in lowering inflation but that the Fed wants to be more confident inflation is moving down to 2% before loosening its restrictive stance.
Today's News
Paramount Global (PARA, Financial) is in discussions to sell the Black Entertainment Television network for up to $1.7 billion to buyers including Chinh Chu of CC Capital and Scott Mills, CEO of BET. The shares of Paramount surged 5.6% to $10.71 as the sale talks progress. Earlier, the company had received interest from media mogul Byron Allen, who had offered up to $3.5 billion for both BET and VH1 channels.
Tesla (TSLA, Financial) saw a significant 10% surge, adding over $68 billion in market value, following the release of its quarterly deliveries that beat consensus estimates. This strong performance helped buoy investor sentiment and contributed to the overall positive movement in the tech-heavy Nasdaq Composite.
GameStop Corp. (GME, Financial) rose 3.69% amid higher-than-average trading volume after plaintiff Martin Radev dropped a lawsuit against Keith Gill, which had alleged a pump and dump scheme. The lawsuit can be refiled in the future, but for now, the dismissal has provided some relief to the stock.
Medtronic (MDT, Financial) ended a six-day losing streak, closing up 0.34% at $77.38. Despite the recent struggle, the stock remains above its 52-week low and has shown resilience by closing positively in seven trading days in June and 16 out of 22 sessions in May.
Deutsche Bank analysts have updated their top investment ideas for the next 12 months, adding Birkenstock (BIRK), Arch Capital (ACGL), and Edwards Lifesciences (EW) among others. This group of stocks has historically outperformed the S&P 500, although it lagged slightly in the last quarter.
Federal Reserve chair Jerome Powell acknowledged progress in reducing inflation but emphasized the need for more confidence in the trend. Speaking at the ECB Forum in Sintra, Portugal, Powell noted that the economic boom seen in the latter half of 2023 was unexpected and highlighted the ongoing efforts to manage inflation.
Vizio (VZIO, Financial) edged lower by 1.2% amid concerns after the FTC sued to block Tempur Sealy's (TPX) $4 billion purchase of Mattress Firm. This has raised questions about Walmart's (WMT) planned acquisition of Vizio for $2.3 billion, which is also under FTC review.
PennantPark (PFLT, Financial) declared a monthly dividend of $0.1025 per share, maintaining a forward yield of 10.62%. The dividend is payable on August 1 for shareholders of record on July 15.
The U.S. Interior Department approved the Atlantic Shores wind farm offshore New Jersey, a joint venture between Shell (SHEL, Financial) and EDF Renewables. The project is expected to generate up to 2,800 MW of electricity, enough to power nearly one million homes.
Ardelyx (ARDX, Financial) stock tumbled 32% after the company decided not to apply for inclusion of its drug Xphozah in the CMS’s TDAPA program, citing potential restrictions on its use that could interfere with patient care.
Bank of America (BAC, Financial) received an upgrade from Seaport Research Partners, which raised its rating from "Neutral" to "Buy" and set a price target of $48. The bank's EPS growth estimates have improved, reflecting better net interest income and asset sensitivity.
Annovis Bio (ANVS) shares more than doubled after the company announced positive results from its Phase 3 trial for its lead asset, buntanetap. The drug showed significant improvements in cognition and physical functions in early Parkinson’s disease patients.
Morgan Stanley analysts recommended buying select stocks in the clean tech and renewable energy sector, including NextEra Energy (NEE, Financial), despite recent market weakness. They believe bipartisan support for renewable energy initiatives will mitigate risks regardless of the political landscape.
Costco Wholesale Corporation (COST) shares rose over 1% after Stifel analysts noted the company's increased market share in the grocery and gas categories, leading to a 6% hike in its price target. Costco and Amazon (AMZN, Financial) have driven significant growth in the U.S. grocery market since 2019.
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