July 6 through July 9, 2021
Euro Trader P. M4
Emerging Markets P. M4
Striking Price P. M5
Commodities P.M6
InsideScoop P.M7
13DFilings P.M7
Power Play P.M7
Charting theMarket P. M9
Winners &Losers P. M10
Research Reports P. M11
Market View P. M12
Statistics P.M13
34,870.16
52-wk:+33.73%YTD:+13.93%Wkly:+0.24%
Dow Jones Industrials
4369.55
S&P 500
52-wk:+37.19%YTD:+16.33%Wkly:+0.40%
14,701.92
Nasdaq Composite
52-wk:+38.47%YTD:+14.07%Wkly:+0.43%
$50.70
SPDR S&P Bank ETF
52-wk:+70.36%YTD:+21.23%Wkly:-1.19%
1%
-4
-5
-6
0
-3
-2
-1
Tuesday Wednesday Thursday Friday Close
Source: Barron’s StatisticsMARKET PERFORMANCE DASHBOARD
Risk Off
IndexesfellonThursdayasU.S.Treasury
prices moved higher. Investors shifted from
stocks to bonds, suggesting a more
pessimistic view about future growth.
AFedDivided
On Wednesday, minutes from the
Federal Reserve’s policy committee’s
Junemeetingshowedasplitonwhen
to begin winding down bond
purchases. Markets shrugged.
Streak Broken
TheS&P500returnedfromthelong
weekendtoitsfirstdeclineineight
sessions. The tech-heavy Nasdaq
Composite rose to a record high.
Bank Shot
Bank stocks jumped on Friday, with
the SPDR S&P Bank ETF rising nearly
4%. All three major indexes closed
at record highs.
THE TRADER
Covid Fears
And Lower
Yields Can’t
Tame This
Bull Market
E
verything went wrong
this past week—and
yet everything ended
up all right for the
stock market.
On the surface, it
doesn’t look like much
happened. The Dow Jones Industrial
Average advanced 83.81 points, or
0.2%, to 34,870.16, while the S&P 500
rose 0.4%, to 4369.55, and the Nasdaq
Composite gained 0.4%, to 14,701.92.
The indexes even managed to finish
the week at record highs. It’s exactly
the kind of action we’d expect from a
holiday-shortened trading week—ex-
cept that it wasn’t.
The Dow experienced a range of
736.73 points, or 2.2%, as investors
briefly freaked out. About what? It was
hard to tell, but it seemed to be driven
by the Treasury market, where the
10-year note tumbled as low as
1.2455% on Thursday from 1.434% on
July 2, before closing at 1.354%.
Raise your hand if you thought
Covid-19 had lost the ability to shake
the market. We sure did. But make no
mistake—Covid fears were driving
some of the moves on Thursday. The
Dow sank more than 400 points after
Japan declared a state of emergency
and announced there would be no
spectators at the Summer Olympics,
though it later recovered a solid chunk
of those losses.
Even before that decline, a basket of
Covid-sensitive stocks had dropped
6.2% during the first week of July,
while tech stocks that had performed
well during the lockdown gained 3.2%,
notes Steve Englander, head of global
G-10 FX research at Standard Char-
tered. The 10-year Treasury yield fell
0.15 percentage point over that period.
The fact that yields and the perfor-
mance of reopening stocks are moving
together makes him worried about the
potential for Covid to upend the market,
even though the economic impact
wouldn’t be as bad as last year’s lock-
downs. “The 2020 links between Covid
risk and yields were more direct as
elevated economic risks from Covid
were seen as leading to further central
bank stimulus,” Englander writes.
Renewed Covid fears don’t mean
the market has to fall, but they’re
worth watching. And Covid isn’t the
only issue at play. Concerns about
By Ben Levisohn
MARKET WEEK