U.S. stocks weekly: Rotation

Reuters

U.S. stocks weekly: Rotation

Jul 12, 2024 at 8:47 pm GMT

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** S&P 500 .SPX rises second straight week, gains 0.9% on bolstered rate cut hopes .N

** Benchmark U.S. 10-Year Treasury yield US10YT=RR hit four-month low after surprise fall in Jun inflation, reinforcing expectations the Fed will begin cutting rates in Sept

** Dow Industrials .DJI 40k or bust? Blue-chip average jumps 1.6%, ends just decimals north of 40k, fails to set fresh record close

** Though, are crushed correlations .COR3M, a concern for stocks?

** And small caps appeared ready to rumble, bumble or stumble, and then by Fri, it was all aboard the broadening train as equal-weighted S&P 500 .SPXEW advances 2.9% for the week, outperforms SPX; small-cap Russell 2000 .RUT surges 6%

** Nearly every sector gets in on the act; Bond-proxies score most, while just Communication Services left out

** Real Estate .SPLRCR vaults 4.4%. Group gains after cooling CPI data

** Utilities .SPLRCU power up 3.9%. Sector rallies as yields tumble after CPI

** Industrials .SPLRCI up 2.4%. Housing-related firms rise after cooler-than-expected inflation data. Builders FirstSource BLDR.N leaps 15%

PHLX Housing index .HGX notches 9.5% weekly gain

Though Delta Air Lines DAL.N descends on downbeat Q3 profit outlook, drags peers

** Financials .SPSY up 2%. Banks rose on Tues as Powell's comments boost case for rate cut

On Fri, JPMorgan JPM.N, Wells Fargo WFC.N and Citi C.N drop after Q2 results

Still, on the week, S&P 500 banks index .SPXBK advances 1.3%, while KBW regional banking index .KRX jumps nearly 9%

** Tech .SPLRCT ticks up 0.5%. Enphase ENPH.O soars ~23% as solar stocks jump as rate-cut bets firm after CPI

Corning GLW.N climbs after Q2 core sales forecast raise, driven by robust adoption of new optical connectivity products for generative AI

Chip stocks advance on Weds as Taiwan Semi's TSM.N Q2 rev handily beats consensus on booming AI demand

Semiconductor index .SOX adds ~2%

** Consumer Discretionary .SPLRCD up 0.4%. At first Tesla TSLA.O continues win streak, but then falls on report delaying Robotaxi launch, and UBS turning bearish over premium valuation. TSLA ultimately loses >1%

** Consumer Staples .SPLRCS up fractionally. Costco COST.O initially rises on Thurs after annual membership fee hikes. However, COST ends that session down ~4%, and sheds ~5% for the week

** Communication Services .SPLRCL slides 3.6%. Paramount Global PARA.O retreats after Skydance Media merger deal. AT&T T.N down after calls, texts hack disclosure

** Meanwhile, individual Investor bulls "unusually high"

** SPX performance YTD:

Tech	33.4%
Comm Svcs	26.3%
SPX	17.7%
Financials	12.5%
Utils	12.4%
Discretionary	9.6%
Industrials	8.9%
Staples	8.7%
Healthcare	8.7%
Energy	8.2%
Materials	5.7%
Real Estate	-0.3%