Summer Slop for Now

Dow: +210.22…
Nasdaq: -24.38… S&P: +5.70…

The S&P 500 increased 0.1% on Wednesday, and closed at a record high, as money flowed into the value stocks on this final day of the second quarter. Relative to the SPX, the Dow(+0.6%) outperformed, the Russell 2000 (+0.1%) performed in-line, and the Nasdaq (-0.2%) underperformed.

Growth stocks had a terrific month of June at the expense of many value stocks, so it’s likely that the balance shifted in favor of value due to rebalancing factors.

We start the third quarter and the second half of the year tomorrow. Usually, a day when mutual fund money gets allocated.

Here’s how we did in the first half of the year.

Russell 2000 +17.0% YTD
S&P 500 +14.4% YTD
Dow Jones +12.7% YTD
Nasdaq +12.5% YTD

If they stopped the market here, it would be a good year for the indexes.

Guess what? The flood of second-quarter earnings starts next week. Feels like it just ended.

No need to thirst for earnings upgrades; because they are everywhere. CITI: “Sell-side company analysts have upgraded their global 2021 EPS forecasts by 15% since January. They now expect 39% global EPS growth in 2021, followed by 10% in 2022.

Some “stuff” looks ridiculously stretched to me. Software (IGV) would be one example. Probably due for a 10% correction.

The doggy days of summer are here, volume is light, and moves can be a little more exaggerated.

One to watch

Watch the 7.00 level on ACTG for a possible breakout.

Catch you in the morning.


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