Stocks Push Forward Amid Mixed Data…..

U.S. stocks closed higher after yesterday’s late session slide, showing resiliency in the face of persistent virus concerns, along with a hotter-than-expected read on consumer price inflation, and mixed reactions to earnings reports. Dow member JPMorgan Chase & Co. released upbeat earnings results while scrutiny of results from Wells Fargo, Citigroup and Delta Air Lines weighed on their shares, with the former posting a larger-than-expected loss and announcing plans to reduce its dividend. However, U.S. small business optimism for last month improved more than expected. Treasury yields rose as bond prices ticked lower and the U.S. dollar was lower. Crude oil and gold prices overcame early pressure and gained ground. Asia and Europe finished mostly lower as some disappointing Eurozone and U.K. data, along with the heightened virus uneasiness, countered favorable Chinese trade figures.

The Dow Jones Industrial Average rose 557 points (2.1%) to 26,643, the S&P 500 Index increased 42 points (1.3%) to 3,198 and the Nasdaq Composite advanced 98 points (0.9%) to 10,489. In moderately-heavy volume, 909 million shares were traded on the NYSE and 4.4 billion shares changed hands on the NASDAQ. WTI crude oil gained $0.19 to $40.29 per barrel and wholesale gasoline decreased $0.02 to $1.25 per gallon. Elsewhere, the Bloomberg gold spot price gained $7.78 to $1,810.53 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.2% at 96.27.

Consumer price inflation hotter than expected, small business optimism tops forecasts…..

The Consumer Price Index (CPI) rose 0.6% month-over-month (m/m) in June, versus the Bloomberg estimate of a 0.5% gain, and compared to May’s unrevised 0.1% dip. The core rate, which strips out food and energy, increased 0.2% m/m, versus expectations of a 0.1% gain and May’s unadjusted 0.1% decline. Y/Y, prices were 0.6% higher for the headline rate, matching forecasts and north of May’s unadjusted 0.1% gain. The core rate was up 1.2% y/y, above projections calling for a 1.1% rise and matching May’s unrevised gain.

The Department of Labor said energy prices rose solidly amid a sharp rebound in gasoline and food prices also increased as food at home continued to rise. The core rate rose for the first month since February, as prices for motor vehicle insurance rebounded sharply, accompanying increases for apparel, shelter, and medical care. However, prices for used cars and trucks, recreation and communication all declined.

The National Federation of Independent Business (NFIB) Small Business Optimism Index for June rose to 100.6, from May’s 94.4 level, and compared to estimates of an increase to 97.8. The NFIB said, “Small business owners continue to be optimistic about future business conditions and indicate they expect the recession to be short-lived.”

Treasuries ticked lower following today’s economic data and as the stock markets moved higher. The yields on the 2-year note and 10-year note rose 1 basis point to 0.16% and 0.62%, respectively, while the 30-year bond was little changed at 1.31%.

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