Market Perspective for June 21, 2021

After a volatile prior week, equities closed out on a high note for all sectors on Monday. Each of the major indexes closed in the positive territory for the day. The S&P 500 rose 1.40 percent, the Dow 1.76 percent and the Nasdaq 0.79 percent. Monday marked the best-performing day for the Dow since March and concluded its previous losses for five straight days.

The Russell 2000 small-cap Index likewise climbed 2.16 percent today. iShares MSCI EAFE ETF (EFA) rose 1.31 percent on Monday.

Technology SPDR Fund (XLK) gained 1.07 percent on Monday. Microsoft (MSFT) gained 1.23 percent and Apple (AAPL) increased 1.41 percent.

The industrial sector was a breakout performer for Monday. Industrial SPDR Fund (XLI) increased 2.20 percent. Honeywell International Inc. (HON) shares increased 1.65 percent on the day, and United Parcel Service, Inc. (UPS) was up 2.81 percent.

Popular meme-based retail stocks pulled back on recent gains with losses to start the week. BlackBerry Limited (BB) lost 0.78 percent, GameStop Corp. (GME) 6.29 percent and AMC Entertainment Holdings, Inc. (AMC) 6.02 percent.

In response to news that the Chinese government plans to increase cryptocurrency regulations, Bitcoin lost 8 percent.

Yields responded to the Fed’s announcement late last week that it would raise its Fed funds target sooner than previously expected. The interest rate hike is projected for 2023, which 13 out of 18 Fed officials are now in support of, with some rumblings of a potential rate increase to hit as early as 2022. Some Fed officials signaled that they expect supply side imbalances to level out over the coming months and the inflation rate to cool off in response.

The yield on the 10-year Treasury note increased 5 basis points to 1.49 percent, still under the 1.5 percent mark and off of its highs from earlier this year.

On Monday, the Dollar Index fell slightly by 0.4 percent to 91.85.

Oil prices were up on Monday as WTI crude oil increased $1.83 to close at $73.12 per barrel.

For the week ahead, the latest figures on existing home sales, which are expected to have decreased by 2.2 percent, are due out on Tuesday. Manufacturing index data, which is forecasted to remain largely steady over the month, will also be released. Fed Chairman Jerome Powell is slated to testify before Congress later this week concerning the Fed’s policy response to the pandemic and the overall state of the U.S. economy.

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