Medicare Agent News: Puts and Takes

Tuesday, June 7, 2022

Puts and Takes

By Nicholas Jasinski | Monday, June 6

Directionless. Stock indexes bounced around today, with little conviction on which way to go. The Dow Jones Industrial Average finished up less than 0.1%, the S&P 500 added 0.3%, and the Nasdaq Composite gained 0.4%.

Over in the bond market, the yield on the 10-year U.S. Treasury note rose 0.08 percentage point, to 3.04%—its highest yield in about a month. Higher bond yields are a headwind for stock valuations, and the move back above 3% is a psychologically significant, round number for investors to get angsty about.

On the positive side of the ledger was good news out of China, where Covid-19-related lockdowns had been adding to supply chain pressures in recent months and the government's crackdown on technology companies has roiled markets.

Over the weekend, restrictions in Beijing and Shanghai continued to be relaxed, with indoor dining returning and public transportation resuming. The Wall Street Journal also wrote that regulators' probe into ride-hailing firm DiDi Global was nearing an end. A ban on adding new users could be lifted as soon as this week, the report noted.

That set off a rally in Chinese technology stocks: DiDi stock soared 24%, JD.com rose 6.5%, Alibaba added 6.2%, and Pinduoduo climbed 5.6%. The Shanghai Composite index gained 1.3% and Hong Kong's Hang Seng Index jumped 2.7%.

Back in the U.S., Ben Levisohn wrote about what else was contributing to the "sideways market" we've been experiencing of late:

There’s the technical picture. The S&P 500 has had a noisy six days of trading but really hasn’t gone anywhere. The index closed at 4158.24 on May 27, and that level, or thereabouts, has served as the high for four of the past five days, with the index touching 4,168.78 before pulling back on Monday. Until the S&P 500 breaks that level, and does it meaningfully, any sign of weakness might be a sign to take profits.

Then there’s Apple. As the biggest stock in the S&P 500, it has an outsize impact on the index. And how it’s performing can determine whether stocks gain or lose. The stock was up as much as 2.2% at its high of the day, but closed up just 0.5%. It held its yearly developers conference Monday, but for now, that doesn’t seem to be a catalyst one way or another.

Depending on your degree of optimism or pessimism, there's a lot to like and a lot to dislike in the market from day to day. Same goes for the long-term outlook for the market: recession fears and a hawkish Federal Reserve are among the negatives, while a robust labor market, higher consumer savings, and strong earnings by most companies are among the positives. Time will tell which factors will dominate.

It certainly isn't boring for investors these days.