NEWS
Stocks Close Another Quarter Of Gains

Stocks capped off another quarter of gains, with some investors happy they chose to index, while others were left with the lackluster stocks they filled their portfolio with. The main question for the second half is whether the stocks that led so far will continue to lead or if a new group will finally emerge to lead the market higher. Let’s see what you missed. 👀

Today's issue covers debatable quarterly performance, SCOTUS kneecapping federal regulators, and more from the day. 📰

Here's today's heat map:

4 of 11 sectors closed green. Real estate (+0.81%) led, & utilities (-1.12%) lagged. 💚

Shares of Infinera soared 16% on news that Finnish telecom network equipment company Nokia will purchase it in a deal worth $2.30 billion. The acquisition will allow Nokia to compete in North America’s optical networking market, where Ciena and China’s Huawei are the major players. 📱

Kura Sushi USA’s shares plummeted 23% after its preliminary revenue figures of $63.10 million fell short of estimates. The company also lowered its full-year revenue outlook. 🍣

Synchrony Financial saw a 7% gain after Baird initiated the stock with an outperform rating. Its price target of $56 implies over 25% upside from Thursday’s closing prices. 🏦

Nike shares suffered their worst daily decline in decades because of the company’s disappointing outlook and management’s inability to communicate a clear turnaround plan for investors. 👟

Agriculture commodities came under pressure after the U.S. Department of Agriculture’s (USDA) report indicated that quarterly grain stocks were up sharply so far this year. Corn fell most as supply remained elevated following last year’s record crop. 🌽

Other active symbols: $SAVA (-34.83%), $FSLR (-9.79%), $NNE (+44.51%), $FFIE (-15.57%), $CHWY (-6.23%), and $WOOF (+13.17%). 🔥

Here are the closing prices: 

EARNINGS
Investors Debate The Debate & Inflation Numbers

Last night’s presidential debate sparked a lot of conversation about the future of our country, economy, and stock market. Everyone has an opinion and are making sure we’re all aware of it. As for us, we will check on the market’s moves today to give us some clues about what’s changed.

Trump-linked stocks like $DJT, $PHUN, and $RUM ran ahead of the debate and into today’s opening bell but experienced selling throughout the day to close deeply red. Meanwhile, the New York Times editorial board is urging President Biden to drop out of the presidential race following his lackluster performance during the debate. 🫨

Betting markets also indicated a drop in Biden’s odds and even suggested bets being placed on a new democratic candidate being chosen. Overall, the market is pricing in increased uncertainty about the democratic party’s path forward, with or without President Biden. 😶‍🌫️

Moving onto economic data…all eyes were on the Fed’s preferred inflation metric, the core personal consumption expenditures price index (PCE).

The index rose just 0.10% MoM and 2.60% YoY during May, the lowest annual increase since March 2021 when inflation initially crossed the Fed’s 2% threshold. Headline inflation was MoM and also up 2.60% YoY as falling energy prices helped offset food gains. 🔺

Personal Income rose by 0.50% MoM, 10bps more than estimated, while consumer spending’s 0.20% increase was 10bps below consensus estimates. It’s the latest data to show that consumer spending is cooling alongside the labor market.

Housing prices remained a problem, rising 0.40% for the fourth straight month. The imbalance between housing demand and supply will continue to put upward pressure on shelter prices, something the Fed can only help by raising financing costs and weakening the economy enough to pressure moves by existing homeowners. 🏘️

Meanwhile, U.S. consumer sentiment fell less than initially anticipated during June, with respondents expecting inflation to be 3% over the next year (as well as the next 5-10 years). Inflation remains the key consumer for consumers who are anxiously waiting to see how much the economy and labor market slows in the coming quarters. 😐

As for major stock market index performance, large-cap tech helped the Nasdaq 100 and S&P 500 achieve gains. However, the other global stock market indexes that lacked tech exposure were slightly negative since other sectors’ performance lagged. 👎

Here, we can see a U.S. sector view, where technology and communications led to the upside, while defensive sectors like utilities and consumer staples also stayed positive. 😬

If you had tech exposure in your portfolio this quarter, you did pretty well. But with uncertainty around the economy, the path of interest rates, and now the presidential election, many investors are wondering how to position for the second half. So far, sticking with tech’s biggest winners has paid off, and it’s unclear what will change that going forward.

As always time will tell…🤷

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