The Trillion-Dollar Question

By Alex Eule |  Monday, July 6

Fireworks. The reopening keeps hitting roadblocks -- the 2020 baseball season is in danger once again -- and stocks keep rising. Those are themes we have been covering for weeks now, and nothing changed today, as investors returned from their long weekend. 

The Nasdaq Composite rose 2.2% to another record close -- its 24th of the year. Shares of Amazon.com jumped 6% on the day, finishing above $3,000 for the first time. Apple was up nearly 3% and is now worth just over $1.6 trillion. Microsoft rose 2%. It's slightly under the $1.6 trillion mark. 

Among other tech companies hitting new highs today were Netflix, Adobe, Salesforce.com, Square, eBay, and Activision Blizzard. Those stocks come from a wide mix of the technology world: entertainment, e-commerce, payments,  cloud software, and gaming. Eric Savitz has more on tech's big day at Barrons.com.

But it wasn't just about tech. The S&P 500 rose 1.6%. It's the large-cap index's fifth straight day of gains, the longest streak since December 2019, when no one in the U.S. was thinking about a pandemic.

Apparently, they're still not really thinking about one. The S&P 500 is up 42% from its March low, and it's just 6% off its February all-time high.

This despite rising Covid-19 infection rates across much of the country. When the crisis ends, economists, behaviorialists, and historians will study the market's inverse reaction to case counts. The quick take is that investors remain convinced that the threat is under control, with the worst of the economic pain in the past. 

Mark Haefele, the chief investment officer of UBS Global Wealth Management, said:  "While we expect continued volatility, we think there are grounds for optimism that economies and markets can weather the recent acceleration in infections.

Haefele sees good news within some ugly numbers: 

While infections in the U.S. increased by an average of 1.7% over the weekend, fatalities increased on average by just 0.2%, in contrast to an average of 0.6% in the five days prior. Investors have also been encouraged by medical advances both in treatment and in vaccines.

Early today Regneron reported positive results from tests of its Covid-19 antibody treatment. Just last week, the biotech firm reported disappointing results for another potential Covid-19 treatment using its arthritis drug Kevzara. Barron's Josh Nathan-Kazis has more on the mixed news from Regeneron, whose stock rose slightly. 

Investors will soon have other real data to chew on: Second-quarter earnings season is coming. The banks are the first big companies to report, starting next week.