Wall Street Heads Into H2 With Stocks on a Streak

The S&P 500 nabbed six-consecutive record closing highs and looks ready to log its seventh

Deputy Editor
Jul 2, 2021 at 3:24 PM
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Wall Street crossed over into the second half of the year, as well as a new month and quarter this week, and the transition was a seamless one. All three major indexes exhibited mostly positive price action throughout the week, adding to the notable returns garnered during the first half of 2021. Specifically, the S&P 500 (SPX) roared up the charts in a seemingly unstoppable climb, stringing together six-straight record closing highs, and well on its way to number seven, after hitting an intraday peak earlier in today's session.

Monday's trading did start off a bit rocky, as the Dow Jones Industrial Average (DJI) dropped 150 points while energy and transport stocks floundered. The tech-heavy Nasdaq Composite (IXIC), on the other hand, joined the S&P 500 in logging fresh records, with a spotlight shining on outperforming Big Tech. The weekend's infrastructure deal in Washington D.C. was also on investors' radars, amid news that U.S. President Joe Biden would not veto the legislation, even if it meant forgoing a Democrat-favored reconciliation bill. By Tuesday, sentiment was cooling, with the Nasdaq and S&P 500 barely eking out wins as anxieties about the easily transmissible Covid-19 Delta variant weighed.  

The second quarter and first half of the year officially came to a close on Wednesday, and traders eyed substantial growth for all three indexes, though markets were mixed on the day and the Nasdaq wound up snapping its back-to-back win streak to turn slightly lower. By Thursday, however, stocks were bouncing back, as upbeat jobs data injected some optimism into markets after weekly jobless claims hit a pandemic-era low. This rally has bled into Friday's trading, as investors gear up for the three-day Fourth of July weekend. At last glance, the Dow, the S&P 500, and the Nasdaq are all on pace to log their second-straight weekly wins, as the Cboe Volatility Index (VIX) -- Wall Street's  "fear gauge" -- heads for its lowest close since February 2020. 

Must-Snag Stocks in July (And Which Stocks to Avoid)

A brand new month means another study from Schaeffer's Senior Quantitative Analyst Rocky White digging into seasonality and how investors can work it to their advantage. Of the best 25 stocks to own in July, historically, Google parent Alphabet (GOOGL) easily topped the list, which could bode well for options players that might want to get in on the rallying FAANG name. Meanwhile, the list of the 25 worst performers could give clues into one sector traders might want to put the breaks on this month. 

How Companies are Responding to Covid-19 Right Now

The easily transmissible Delta variant of Covid-19, along with the uneven distribution of vaccines globally, which has led to extended lockdowns throughout the world, has certainly put some weight on reopening optimism. We covered several corporations which have been responding to these new fears in an attempt to get the virus under control. Johnson & Johnson (JNJ) said today that its vaccine is showing efficacy against the Delta variant for up to  eight months following immunization.

On the other hand, Altimmune (ALT) scrapped its Covid-19 vaccine trials, sending its stock spiraling, after the company said it would focus its efforts on the development of its liver and obesity treatments. Another big name that's had a hand in the distribution of vaccines, Walgreens Boots Alliance (WBA), stepped into the earnings confessional. The company reported a quarterly profit and revenue beat, and added that it administered 17 million jabs in the third quarter, with 28 million vaccination in total forecast for 2021. Despite the upbeat report, the stock took a serious nosedive on Thursday. 

What Could Move Markets After The Fourth

The week following a holiday notoriously known for fireworks might act as a reprieve for some investors, with a relatively bare economic calendar on deck. The most notable event will come mid-week as the Federal Open Market Committee (FOMC) releases its latest meeting minutes, while another round of weekly jobs data will also move markets. In the meantime, check out a sector-by-sector breakdown of options sentiment from Schaeffer's Senior Quantitative Analyst Rocky White, along with an in depth analysts of the latest FOMC meeting, as stocks reversed some of their expiration week losses, courtesy of Senior Vice President of Research Todd Salamone. 

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