The SPX index hit a new record high this afternoon at 2496.77 as traders kept buying after Monday’s power surge.
The Nasdaq Composite, Nasdaq 100, and Dow Jones Industrial Average also came within a stone’s throw of record highs, but couldn’t quite get across the finish line.
Shortly after the open, some key tech names like Apple (AAPL), Amazon.com (AMZN), and Nvidia (NVDA) started pulling back, driving some minor intraday weakness before a slow afternoon rally.
Overall, the action was pretty sedate, with the SPX trading in an extremely tight 6 point range.
Biotechnology soured early on, but bounced into the close to finish in the green.
The US dollar and Treasury yields stayed on the rise early today, driving gold down this morning.
Interestingly, a Bank of America Merrill Lynch survey showed that fund managers named shorting the dollar the third most crowded trade. The survey shows that fund managers believe long bitcoin is the most crowded trade, with long Nasdaq in second.
Apple rose during today’s iPhone unveiling event. The consensus expectation was that the company would unveil a high-end “iPhone X” retailing at $1,000+, complementing the base iPhone line.
And that’s exactly what happened, so there was a classic “sell the news” reaction, which is pretty common for Apple events. Shares finished down -0.4% at $160.82.
I suspect this new high-priced iPhone will be an extremely strong seller since by default, it’s pretty much the only major technology status symbol out there.
This morning, JOLTS Job Openings came in at 6.17 million, beating the 5.960 million consensus, pointing to strong demand for workers.
In the first quarter, the National Federation of Independent Business found that 45% of small businesses could not find qualified applicants to fill openings.
This “skills gap” implies that our current low unemployment levels would be even lower if American works had the skills companies are demanding.
However, even though companies can’t find the workers they need, it’s not having much of an impact on inflation. Recent jobs reports have showed disappointing earnings growth.
Over in Washington, we may be finally seeing some progress on a corporate tax deal. President Trump’s legislative affairs director Marc Short said the White House and congress are close to finalizing a deal.
Treasury Secretary Steve Mnuchin said tax changes could be backdated to January 1, which would in effect give corporations a big instant financial break.
This morning, Scott Redler said “SPX did a gap and go as it cleared 2472 and then 2484. Now see if it holds 2488 to clear 2490 on the way to 2500+.”
SPX cleared 2490 on the open and closed up 0.3% at 2496.48.
So overall, it looks like the bulls are still in control.
Things aren’t perfect. For example, it would be nice if the Russell 2000 would participate in the rally.
The other major indices are right around their all-time highs, but the Russell just isn’t quite there, the recent rally notwithstanding:
That said, if the US dollar keeps rallying, perhaps the Russell will get renewed momentum and make its down record high.
A strong dollar tends to hurt large cap stocks since it dampens foreign earnings, so it can drive rotation into the small cap stocks that comprise the Russell 2000.