Equities Modestly Higher With Banks in Focus…..

U.S. stocks finished the day modestly higher, marginally building on a late Q2 run that has seen the S&P 500 and the Nasdaq climb back into record high territory. The markets spent most of the day narrowly rangebound as participants continued to weigh global monetary policy uncertainties and worries about the spread of the Delta coronavirus variant against signs of continued economic prosperity and recent progress on an infrastructure spending plan. Meanwhile, investors looked ahead to an important week of economic data, headlined by Friday’s nonfarm payroll report. In economic news, Consumer Confidence jumped for this month and home prices continued to climb. The banking sector was closely watched as several prominent firms announced increased payouts to shareholders following last week’s successful stress tests by the Fed, while United Airlines announced plans to boost its fleet by placing orders with Dow member Boeing Company and Airbus. Treasuries traded higher to depress yields and the U.S. dollar gained ground. Gold fell while crude oil prices inched higher. Asia finished lower and Europe rebounded from yesterday’s dip.

The Dow Jones Industrial Average rose 9 points to 34,292, the S&P 500 Index increased 1 point to 4,292, and the Nasdaq Composite increased 28 points (0.2%) to 14,528. In moderate volume, 804 million shares were traded on the NYSE and 4.7 billion shares changed hands on the Nasdaq. WTI crude oil added $0.07 to $72.98 per barrel. Elsewhere, the Bloomberg gold spot price decreased $17.35 to $1,761.14 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—increased 0.2% to 92.06.

Consumer Confidence jumps, home prices continue to climb…..

The Conference Board’s Consumer Confidence Index rose to 127.3 in June from May’s upwardly revised 120.0 level, and versus the Bloomberg consensus estimate calling for a 119.0 figure. The index improved to the highest level since the onset of the pandemic’s first surge in March 2020 as a solid improvement for the Present Situation Index portion of the survey was met with a rise in the Expectations Index of business conditions for the next six months. On employment, the labor differential—consumers’ appraisal of jobs being “plentiful” minus being “hard to get”—continued to charge higher, rising to 43.5 from the 36.9 level posted in May. 12-month inflation expectations moved higher.

The Conference Board added that, “Consumers’ assessment of current conditions improved again, suggesting economic growth has strengthened further in Q2. Consumers’ short-term optimism rebounded, buoyed by expectations that business conditions and their own financial prospects will continue improving in the months ahead. While short-term inflation expectations increased, this had little impact on consumers’ confidence or purchasing intentions. In fact, the proportion of consumers planning to purchase homes, automobiles, and major appliances all rose—a sign that consumer spending will continue to support economic growth in the short-term. Vacation intentions also rose, reflecting a continued increase in spending on services.”

The 20-city composite S&P CoreLogic Case-Shiller Home Price Index showed a 14.9% year-over-year (y/y) gain in home prices in April, versus estimates of a 14.7% increase. Compared to the prior month, home prices were up 1.6% on a seasonally adjusted basis, below forecasts of a 1.8% gain.

Treasuries were higher, as the yields on the 2-year and 10-year notes were little changed at 0.25% and 1.47%, respectively, while the rate on the 30-year bond decreased 1 basis point to 2.09%.

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