Investment Commentary – June 8th, 2016
Market Indices as of Market Close June 8th,2016
Dow 18,005 (3.33% YTD)
S&P 2,119 (3.68% YTD)
NASDAQ 4,974 (-0.65% YTD)
Global Dow 2,390 (2,033 52 week low /2,606 high)
10-year Treasury 1.70 (1.53 52 week low /2.50 high)
Gold 1,264 ($1,049 52 week low /high $1,308)
Oil $51.37 ($31.61 52 week low /high $63.77)
Dow ends above 18,000 as dollar weakens
The Dow ended above 18,000 for the first time since April on Wednesday as declines in the dollar lifted some commodity-related shares and boosted the outlook for multinationals.
The Dow Jones industrial average .DJI rose 66.56 points, or 0.37 percent, to 18,004.84, the S&P 500 .SPX gained 6.99 points, or 0.33 percent, to 2,119.12 and the Nasdaq Composite .IXIC added 12.89 points, or 0.26 percent, to 4,974.64.
Nasdaq back near 5,000. Tech rebound? Not exactly
The Nasdaq, home to Apple, Google, Facebook and many other leading tech stocks, is within spitting distance of topping the 5,000 mark for the first time this year.
It was hovering around 4,975 Wednesday afternoon. The Nasdaq has surged nearly 20% since hitting a 52-week low right around 4,200 back in February.
But the recent rebound in the Nasdaq has less to do with high tech and more to do with shampoo, 18-wheeler trucks, toys and ketchup.
Sure, there are some tech stocks helping to push the Nasdaq back near 5K.
Nvidia (NVDA, Tech30), a graphics chip company that also is a leader in self-driving car technology, is up 40% this year. Semiconductor equipment giant Applied Materials (AMAT) has surged 30%. They are the top gainers in the Nasdaq-100 (NDX) so far in 2016.
But dig deeper and you’d find that other hot Nasdaq stocks have little to do with Silicon Valley.
Hair care and cosmetics giant Ulta Salon (ULTA) is up 30%. Peterbilt and Kentworth owner PACCAR (PCAR) is up 20%.
Other big Nasdaq winners? Barbie and Hot Wheels maker Mattel (MAT), discount retailer Dollar Tree (DLTR) and condiments and cheese king Kraft Heinz (KHC). The latter is the top holding of Warren Buffett’s Berkshire Hathaway (BRKB). You can’t get more old economy than that!
The Nasdaq is still down slightly for the year though. The last time it was above 5,000 was on December 31.
JP Morgan: Thought of the week
US equities have been treading water over the last year as the Conference Board
leading economic indicator struggled to make gains. However, the latest rise in
the Conference Board indicator provides some tentative cause for optimism that
this cycle for US equities isn’t about to end just yet. Both the last two equity bear
markets were preceded by declines in this leading indicator, which so far is
showing no warning sign. The resilience is being driven by continued strength in
the labour and housing markets. While these remain healthy we think US equities
can grind slowly higher.
THIS DAY IN FINANCIAL HISTORY
June 8th, 1999: drkoop.com, Inc. goes public on the NASDAQ, selling 9,375,000 shares at $9.00 each. For a brief shining moment, founder Dr. C. Everett Koops stake is worth more than $50 million. Within a year, the online health-care company is on its deathbed.
The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investments.