Palpable Uncertainty Carries Over from Last Week…..

U.S. equities finished mixed in the first session of a new week, with investors continuing to fret over uncertainties regarding the Delta variant and Fed taper timing, while stagflation concerns seemed to have resurfaced. As well, the economic calendar was dormant today and unable to provide any sway, but reads on small business optimism and consumer price inflation are on deck for tomorrow. Value/cyclical sectors—Financials, Energy—traded to the upside, but growth issues—notably Information Technology—lagged to keep any gains in check and pressure the Nasdaq. Treasuries gained ground, putting downside pressure on yields, and the U.S. dollar nudged higher, while gold and crude oil prices saw modest gains. M&A news dominated the equity front, with TransUnion agreeing to acquire Neustar, for $3.1 billion, and Kansas City Southern saying it received a revised nearly $27.0 billion takeover proposal from Canadian Pacific Railway that it believes is superior to the previously agreed upon takeover proposal of about $30.0 billion from Canadian National Railway. In other equity news, Dow member 3M Company warned that inflation is running hotter than anticipated in Q3 and will have a bigger impact on earnings than initially expected. European markets finished with widespread gains, with Energy and value/cyclical issues also leading the way, while stocks inAsia finished mixed as Hong Kong issues fell with China reportedly continuing its crackdown.

The Dow Jones Industrial Average increased 262 points (0.8%) to 34,870, the S&P 500 Index gained 10 points (0.2%) to 4,469, while the Nasdaq Composite decreased 10 points (0.1%) to 15,106. In moderate volume, 851 million shares were traded on the NYSE and 4.6 billion shares changed hands on the Nasdaq. WTI crude oil gained $0.73 to $70.45 per barrel. Elsewhere, the gold spot price rose $2.00 to $1,794.10 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—moved 0.1% higher to 92.67.

Treasuries were mostly higher, as the yield on the 2-year note was flat at 0.21%, while the yield on the 10-year note declined 2 basis points (bps) to 1.32%, and the 30-year bond rate decreased 3 bps to 1.90%. The U.S. dollar gained modest ground, while the U.S. economic calendar was void of any major releases today.

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