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Afternoon Note

Mixed Start

By Charles Payne, CEO & Principal Analyst
7/1/2020 1:47 PM

After a spectacular close to the second quarter, the third quarter starts off mixed.  The Nasdaq once again is leading the pack and is up .78%.  The FAANG names for the most part are on a tear, and despite companies pull their ads from Facebook (FB), the stock is up 3.5%. 

The standout today is the Real Estate sector followed by Communications Services.  Energy is giving back some of it gains from yesterday.

S&P 500 Index

+0.52%

 

Communication Services (XLC)

+2.02%

 

Consumer Discretionary (XLY)

+0.92%

 

Consumer Staples (XLP)

+0.56%

 

Energy (XLE)

 

-1.69%

Financials (XLF)

 

-0.41%

Health Care (XLV)

+0.96%

 

Industrials (XLI)

+0.11%

 

Materials (XLB)

 

-0.28%

Real Estate (XLRE)

+2.08%

 

Technology (XLK)

+0.45%

 

Utilities (XLU)

+1.94%

 
 

Breadth is mixed and 52-week highs are blowing away the lows.

Issues:

NYSE

NASDAQ

Advancing

1,577

1,520

Declining

1,377

1,775

52 Week High

35

88

52 Week Low

2

11

Advancing

1.10B

1.49B

Declining

1.14B

1.10B

 

Economic Data

The economic activity in the US manufacturing sector expanded in June with the ISM's Index (PMI) improving to 52.6 from 43.1 in May, beating expectations of 49.5. It was the first time it was above 50% (expansion) in fourth months and was the biggest month over month increase since August 1980.

Timothy R. Fiore, Chair of the ISM's Manufacturing Business Survey Committee said, "June signifies manufacturing entering an expected expansion cycle after the disruption caused by the coronavirus (COVID-19) pandemic."

Construction spending was lower by 2.1% after a revised 3.5% drop in April.  Year over year, construction spending is up 0.3% of which +4.7% was in public construction spending, and a 1.2% decline in total private construction spending.

After this morning's ISM report and the construction spending report, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth increased from -38.0 percent and -58.6 percent, respectively, to -34.8 percent and -56.9 percent, respectively.  

The green back is down 0.3% to 97.10 and the benchmark 10-year U.S. Treasury is down 3 basis point to 0.68%.


 

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