Market Overview
It was another lackluster day in the stock market. The three major indices traded slightly higher or slightly lower than prior closing levels, ultimately settling in mixed fashion. Today's price action led the S&P 500 (+0.1%) and Nasdaq Composite (+0.1%) further into record territory. There wasn't a lot of conviction on either side of the tape in front of influential economic data this week.
Upcoming Economic Data
The June Consumer Price Index and Producer Price Index will be released Thursday and Friday, respectively. The muted action is also in front of the start of earnings season.
Top Performing Stocks
- JPMorgan Chase (JPM) 207.63, +2.46, +1.2%
- Wells Fargo (WFC) 59.88, +0.87, +1.5%
- Citigroup (C) 66.55, +1.81, +2.8%
These were among the top-performing names in the heavily-weighted financial sector (+0.7%) ahead of their quarterly results on Friday. The SPDR S&P Bank ETF (KBE) closed 1.7% higher, and the SPDR S&P Regional Banking ETF (KRE) jumped 1.8%.
Fed Chair Powell's Testimony
Fed Chair Powell's testimony before the Senate Banking Committee today did not garner a big reaction from the stock or bond market. Mr. Powell will also appear before the House Financial Services Committee tomorrow. There were no surprises in today's remarks, which featured an acknowledgment that the "likely next direction" of policy will be a loosening of policy, indicating a rate hike is not likely.
Bond Market
The 10-yr note yield settled three basis points higher at 4.30%, and the 2-yr note yield rose one basis point to 4.63%. This price action was also in response to today's $58 billion 3-yr note auction, which met strong demand.
Year-to-Date Performance
- Nasdaq Composite: +22.8% YTD
- S&P 500: +16.9% YTD
- Dow Jones Industrial Average: +4.3% YTD
- S&P Midcap 400: +3.8% YTD
- Russell 2000: +0.1% YTD
Today's Economic Data
Today's economic data was limited to the NFIB Small Business Optimism Survey, which rose to 91.5 in June from 90.5.
Guru Stock Picks
Dodge & Cox has made the following transactions:
- Add in VFC by 19.68%
Chuck Royce has made the following transactions:
- Add in ONEW by 15.99%
Today's News
Kroger (KR, Financial) unveiled a list of stores, distribution centers, and plants that will be divested to secure regulatory approval for its planned purchase of Albertsons (ACI). The deal, valued at nearly $25 billion, faces challenges from the Federal Trade Commission. Affected employees will transition to C&S Wholesale Grocers, which has committed to maintaining pay, health plans, and collective bargaining agreements.
Investor and fund manager Bill Gross remarked that Tesla (TSLA, Financial) is "acting like a meme stock" due to its "sagging fundamentals and straight-up price action." Despite being up about 6% year-to-date, the stock has surged 49% over the past month. Gross also mentioned Chewy (CHWY, Financial) and Zapp Electric Vehicles (ZAPP, Financial) as other examples of volatile meme stocks.
Procter & Gamble (PG, Financial) declared a quarterly dividend of $1.0065 per share, maintaining its forward yield at 2.43%. The dividend is payable on August 15 to shareholders of record on July 19. This announcement comes amid discussions about the company's stable yet slightly overvalued business model.
Starbucks (SBUX, Financial) shares fell for the seventh consecutive day, closing down 2.43% at $72.76. The stock has lost 26.2% over the past 12 months and 10.7% in the last month. Analysts have mixed ratings on the stock, with a majority recommending a Hold due to weak consumer sentiment and rising competition.
Illumina (ILMN, Financial) announced the acquisition of Fluent BioSciences, integrating its single-cell technology into Illumina's product portfolio. This move aims to bolster Illumina's capabilities in the rapidly evolving biotechnology sector.
Chipotle Mexican Grill (CMG, Financial) stated that CFO Jack Hartung will retire effective March 31, 2025. Adam Rymer, a 15-year veteran of the company, will assume the role of CFO starting January 1, 2025. The stock fell 0.7% in extended trading following the announcement.
United Parcel Service (UPS, Financial) appointed Brian Dykes as executive vice president and CFO. Dykes will be responsible for financial strategies and most recently served as senior vice president of global finance and planning at UPS.
Hawaiian Electric (HE, Financial) saw a 10.7% rise in trading following reports of a potential settlement for those affected by the Maui wildfires. Maui County is considering a "global settlement" for the 449 wildfire lawsuits filed by 2,216 affected parties.
MetLife (MET, Financial) declared a quarterly dividend of $0.545 per share, maintaining its forward yield at 3.12%. The dividend is payable on September 10 to shareholders of record on August 6.
Restaurant stocks, including Chipotle (CMG, Financial) and Starbucks (SBUX, Financial), traded lower as investors expressed concerns about the upcoming Q2 earnings season. Analysts noted a decline in casual dining sales and warned of potential headwinds due to weak consumer confidence.
Shares of Alzheimer’s drug developer Cassava Sciences (SAVA, Financial) rallied on above-average volumes, ending a multi-session decline that followed fraud allegations against a company advisor. The stock saw its best intraday gain since October, with about 4.7 million shares changing hands.
Wholesale used-vehicle prices fell in June compared to May, with the Manheim Used Vehicle Value Index dropping 8.9% year-over-year. The seasonal adjustment resulted in a 0.6% month-over-month decline, with major market segments experiencing price drops.
GuruFocus Stock Analysis
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