Market Performance
The stock market had a solid showing, leading the Dow Jones Industrial Average (+0.5%) to close at a fresh all-time high. The Russell 2000 continued its recent outperformance, jumping 1.8%, while the S&P 500 and Nasdaq Composite gained 0.3% and 0.4%, respectively.
Advancers and Decliners
Advancers led decliners by a 3-to-2 margin at both the NYSE and the Nasdaq.
Bank Stocks
Outperforming bank stocks contributed to the upside bias today amid ongoing earnings news from the space. Goldman Sachs (GS) was a winning standout after reporting earnings this morning. The SPDR S&P Bank ETF (KBE) closed 2.7% higher, and the SPDR S&P Regional Banking ETF (KRE) jumped 2.9%.
Sector Performance
- The S&P 500 financial sector was a top performer, closing 1.4% higher.
- The only sector to close with a larger gain was energy, which jumped 1.6%.
- The utilities sector was the worst performer by a wide margin, falling 2.4%.
Political Impact
The positive bias today was also related to the notion that this weekend's assassination attempt on former President Trump has increased his chances of winning the election in November. Mr. Trump is deemed by many to be a more market-friendly candidate due in part to his aim of deregulation and lower corporate tax rates.
Market Rates
An early rise in market rates was also attributed to the belief that former President Trump is likely to win in November, but Treasuries settled below their high yields. The 10-yr note yield settled four basis points higher to 4.23% after hitting 4.45%, and the 2-yr note yield dropped one basis point to 4.45% after hitting 4.47%.
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Today's News
Former President Donald Trump has selected Ohio Senator J.D. Vance as his vice presidential running mate, which has significantly impacted shares in conservative-focused media platform Rumble (RUM, Financial). The stock jumped as much as 29% on the news. Vance, an investor in Rumble through his venture capital firm Narya Capital, has personally invested up to $300,000 in the platform, with his stake now potentially worth as much as $1.5 million. More than 15.5 million RUM shares changed hands, 15.6 times its 3-month daily moving average. Stocks in Trump Media & Technology Group (DJT, Financial) also saw a rise of 32% by Monday's close.
SolarEdge Technologies (SEDG, Financial) led a broad retreat among solar company stocks, dropping 15.4% after announcing a workforce reduction of 400 employees due to an inventory backlog and declining revenues. Other solar companies also experienced sharp declines, including Canadian Solar (CSIQ, Financial) down 10.7%, Sunnova Energy (NOVA, Financial) down 10%, and Sunrun (RUN, Financial) down 8.9%. Deutsche Bank, however, highlighted First Solar (FSLR, Financial) as its top solar pick, citing strong growth potential in the U.S. market despite the broader sector's downturn.
Elon Musk responded to queries about the timing of Tesla's (TSLA, Financial) robotaxi event, revealing that he requested an important design change to the front of the robotaxi model. Musk did not provide a new date for the reveal, originally scheduled for August 8. Morgan Stanley analysts believe the delay could spotlight Tesla's embodied AI capabilities beyond app-based autonomous cars, potentially underpinning Tesla's Master Plan 4.
Federal Reserve Chair Jerome Powell stated that the U.S. economy has performed remarkably well over the last couple of years. He noted that while the labor market is no longer tighter than it was at the end of 2019, there has been no additional confidence gained in the first quarter that inflation has come down. However, Q2 data has added to the Fed officials' confidence that inflation is moving toward 2%, but Powell refrained from signaling any specific policy actions.
Ford Motor Company (F, Financial) sold an estimated 15,645 Ford-150 Lightning vehicles in the first half of the year, while Tesla (TSLA, Financial) ranked second with 11,558 Cybertrucks sold. Rivian (RIVN) reported 6,570 R1T sales, affected by a temporary manufacturing plant shutdown. The Cybertruck outsold the F-150 Lightning by 850 vehicles in the second quarter, becoming the best-selling vehicle priced over $100,000.
HP (HPQ, Financial) was the most shorted information technology stock in June, with 12.2 million shares sold short, accounting for 12.8% of its shares float. Enphase Energy (ENPH) was the second-most shorted at 10.43%, followed by Super Micro Computer (SMCI). The S&P500's information technology sector has risen over 21.67% this year.
Upstart Holdings (UPST, Financial) saw its stock rise for the ninth straight session, closing 10.51% higher at $29.96. The stock has gained about 30% in value during this winning streak but has lost about 32.03% in the last 12 months. Upstart has a Sell rating from Seeking Alpha's Quant Ratings, with a score of 2.04 out of 5.
Celsius Holdings (CELH, Financial) fell to its lowest level since January, dropping 10.2% to $52.89. The energy drink stock is now down more than 45% from its 52-week high. TD Cowen lowered its price target on Celsius to $68, citing slowing sales growth trends. The Wall Street Journal also published a story warning about the health impact of energy drinks, adding to the selling pressure.
Microsoft (MSFT), Alphabet (GOOG, GOOGL), Amazon (AMZN), Palantir (PLTR), and Meta Platforms (META) are expected to be standouts in the upcoming earnings season, according to Wedbush Securities. Analyst Dan Ives believes 2Q earnings will be a positive catalyst for the tech sector, driven by the "AI Revolution" and accelerated growth and earnings.
Salesforce (CRM) reduced its workforce by about 300 positions over the past month. This move comes as the company increases spending on product innovation. Salesforce shares dipped marginally following the news. The tech industry has seen nearly 107,000 job cuts year to date, according to tracker Layoffs.fyi.
AT&T (T) and Verizon (VZ) are in a dispute over a plan to boost service for emergency responders. AT&T is pushing for more wireless frequencies to be allocated to FirstNet, a move Verizon claims would amount to a $14 billion gift to AT&T. T-Mobile (TMUS) has also urged regulators to avoid a "FirstNet takeover" of the spectrum.
Rivian Automotive (RIVN) snapped a six-session gain streak, closing 3.4% lower at $17.50. The stock had gained about 22.5% in the preceding six sessions. Despite this, Rivian has lost nearly 23% so far this year.
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