United's Huge Bet

By Nicholas Jasinski | Tuesday, June 29

Sideways. The S&P 500 and Nasdaq Composite nudged slightly higher today to add ever-so slightly to their records set yesterday. Technology and other growth-oriented pockets of the market were generally in the lead for a second-straight day, as Treasury yields were largely unchanged.

The Dow Jones Industrial Average and S&P 500 each added less than 0.1%, and the Nasdaq ticked up just 0.2%.

Despite lots of rotation and movement between sectors and styles lately, the headline indexes have been little affected. The economic and earnings-growth backdrop remains solid, and while uncertainties about inflation and monetary policy have added a bit of action lately, they haven't broken the trend for long. It's hard to be meaningfully bearish in the face of record economic indicators and earnings growth for many companies—even if that's partially due to easy comparisons to 2020.

At some point, however, the data will stop showing incremental improvement, even if they remain exceptionally strong. Then the narrative will shift to one of slowing growth. That's not an issue for today.

This morning's June consumer confidence index results from The Conference Board came in well ahead of expectations, signifying a more optimistic and bullish main street. The guage is now back to where it was in most of 2019, and only slightly below its February 2020 high point.

"Today’s reports only add to the belief that the recovery is going full force," wrote Joel L. Naroff, president and chief economist at Naroff Economics. The Conference Board reported that consumer confidence jumped in June, with the view of both expectations and present conditions increasing solidly.  The confidence measures had been improving at a pace that was disappointing, but it appears that could be changing."

The June rise in the index was driven by higher assessments of both respondents' current situation and their outlook about the future.

"As the virus fades, moods are high, and...households are sitting on a $3 trillion powder keg of extra cash," wrote Amherst Pierpont chief economist Stephen Stanley​. "Let the consumer spending party begin!"

There's a lot of good news on the earnings and economic fronts still ahead. The trouble for investors is determining whether stocks are pricing that in enough, too much, or too little.

DJIA: +0.03% to 34,292.29
S&P 500: +0.03% to 4,291.80
Nasdaq: +0.19% to 14,528.33

The Hot Stock: Skyworks Solutions +4.5%
The Biggest Loser: Fox Corp -3.9%

Best Sector: Technology +0.7%
Worst Sector: Utilities -1.6%