THE GIST (“THE WHAT”)
The S&P 500 index extended gains for the sixth session in a row despite the hawkish Fed as yields slipped after May’s unemployment data showed signs of weakness, increasing the odds of an end in Fed’s monetary tightening cycle. The index notched a 14-month high, closing sharply higher by 53.27 points (1.22%) at 4425.85.
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
Trading Plans for THU. 06/15: Markets Calling the “Hawkish” Bluff of Powell?
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THE DETAILS (The “How & Why”):
The U.S. weekly unemployment claims data showed signs of a weakening labor market, coming in at a 19-month high of 262,000, as against the expected decline of 245,000. The U.S. industrial production in May also declined by 0.2%. Markets shrugged off the Fed’s hawkish policy outlook and another quarter percentage rate hike by the ECB. The 10-year treasury yield fell -6.4 bp to settle at 3.722%, sending stocks higher.
Domino’s Pizza was the best performer of the session, soaring 6.46% following stock upgrade by Stifel as delivery sales showed signs of stabilizing and carryout sales are expected to pick up momentum by the next year. Lennar Corp jumped 4.41%, boosting other homebuilder stocks on beating earnings expectations and issuing a bullish outlook. New home orders for Lennar rose 0.5% year-over-year to 17,885, above the forecasted figure of 16,501.
Microsoft Corp hit an all-time high, jumping 3.19% on reports that the software company is expected to gain $10 billion in revenues from its OpenAI models.
Amongst the decliners, Warner Bros Discovery Inc was the worst performer of the session, falling 3.95%. Chip stocks gave back some of their recent strong gains on the back of profit taking. Advanced Micro Devices and Microchip Technology closed lower by 2.43% and 1.47% each.