Stocks Continue To Climb As Tech, Financials Gain, Dollar Stays At 15-Month Lows: What's Driving Markets Monday?

U.S. stocks kicked off the week on a positive note, gaining momentum as traders eagerly await a week packed with crucial corporate earnings reports, including Bank of America BAC, Morgan Stanley MS, Goldman Sachs GS, Tesla Inc. TSLA and Netflix Inc. NFLX.

Despite initial concerns sparked by disappointing growth figures from China, the session saw a rebound for major U.S. indices, signaling renewed investor confidence. Interviewed on Bloomberg TV this morning, Janet Yellen said she does not believe the United States will enter a recession.

The U.S. dollar remained stable throughout the day, with the DXY index trading at its 15-month lows, showing only a slight 0.5% increase since the Federal Reserve began raising rates in March 2022. Meanwhile, U.S. yields remained relatively unchanged, with the 10-year benchmark at 3.8%.

Cues From Monday’s Trading:

The S&P 500 Index gained 0.4%, breaking above 4,500 levels, while the Dow Jones ticked 0.2% higher. The tech-heavy Nasdaq 100 Index rose 0.7% while small caps in the Russell 2000 soared 1.1%.

US Index Performance In On Monday

Value	Performance (+/-)	Value
Nasdaq 100	+0.74%	15,689.77
S&P 500	+0.34%	4,520.16
Dow Industrials	+0.23%	34,588.65
Russell 2000	+1.10%	1,952.32

Analyst Color:

While some analysts express unease over the market run-up since it hit a low in October last, Ryan Detrick of Carson Group sees scope for further upside.

The analyst noted that the S&P 500 is 26% above the mid-term election year closing low set on Oct. 12. "Amazing as this is, this is actually perfectly normal," he said.

Stocks gained more than 32% on average a year after the mid-term year low, Detrick noted.

The S&P 500 is 26% above the midterm yr closing low set on 10/12/22.

Amazing as this is, this is actually perfectly normal. We found stock's gained more than 32% on avg a yr after a midterm yr low.

Many chose to ignore this once again this year. pic.twitter.com/mDOHSz3R1p

— Ryan Detrick, CMT (@RyanDetrick) July 14, 2023

Thursday’s Trading In Major US Equity ETFs: In midday trading on Thursday, the SPDR S&P 500 ETF Trust SPY was 0.3% higher to $450.66, the SPDR Dow Jones Industrial Average ETF DIA rose 0.2% to $345.85 and the Invesco QQQ Trust QQQ was 0.7% higher to $381.57, according to Benzinga Pro data.

U.S. sectors showed mixed performance. The Technology Select Sector SPDR Fund XLK and the Financial Select Sector SPDR Fund XLF, outperformed, both up 1%.

The Real Estate Select Sector SPDR Fund XLRE and the Energy Select Sector SPDR Fund XLE, underperformed, down 0.6% and 0.5%, respectively.

Latest Economic Data:

The NY Empire State Manufacturing Index decreased 5.5 points from the previous month to +1.1 in July 2023, exceeding market expectations of -4.3.

See also: How To Trade Futures

Stocks In Focus:

• First Solar Inc. FSLR rose 6%, on track for the best session since over two months,  solar module deal with Energix.
• AT&T Inc. T dropped about 5% on Monday, on track for the lowest close in 30 years and continuing a recent decline following a Wall Street Journal investigation.
• Apellis Pharmaceuticals Inc APLS fell 21%  on track for biggest one-day pct decline since Sept 2021; analysts cite doctor reports of intraocular inflammation (IOI) after treatment with its Syfovre.
• Tesla rose over 2.5% in premarket trading as traders reacted to the production of the first Cybertruck and also looked ahead to its earnings report due Wednesday.
• Activision Blizzard, Inc. ATVI rallied over 3% after the Federal Trade Commission lost its appeal to block the video game software manufacturer’s deal with Microsoft Corp. MSFT.

Commodities, Bonds, Other Global Equity Markets:

Crude oil fell 1%, with a barrel of WTI-grade crude trading at $74.40. The United States Oil Fund ETF USO was 0.8% lower to $66.90.  

Treasury yields slightly fell, with the 10-year yield up by 1 basis points to 3.82% and the two-year yield down by 2 basis points to 4.75%. The iShares 20+ Year Treasury Bond ETF TLT was 0.4% lower for the day. 

The dollar fell, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, down 0.1%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was 0.1% higher to 1.1234.

European equity indexes closed in the green. The SPDR DJ Euro STOXX 50 Etf  FEZ fell 0.4%. 

Gold held steady $1,955/oz. The SPDR Gold Trust GLD was flat at $177. Silver fell 0.4% to $24.80, with the iShares Silver Trust SLV down 0.3% to $22.80. Bitcoin BTC/USD was 0.1% lower to $30,207.

Staff writer Piero Cingari updated this report midday Monday.

Image Credits – Shutterstock

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