Capital 19 Catch-Up

The Major Indices Close out the Week, Month, Quarter and First Six Months of 2021 With Gains. Find Out Which Stocks Have Been Leading The Way Below

Technology and Energy stocks led the way last week as all three of the major indices finished the week, the month, and the quarter with gains. The S&P500 and the Nasdaq also finished at all-time highs – with the S&P500 closing the final session out for its seventh straight winning session in a row. It is the benchmark index’s longest winning streak since August last year.

The Nasdaq led the week, gaining just under 2% for the five sessions. The semiconductor industry helped boost its numbers as it continues to bounce back after a rocky 2021 so far, with Catch Up favourite Nvidia (NVDA) finishing the week up 3.4%. The S&P500 closed out the week in second spot, rising 1.7%. While the Dow managed to pick up 1%, with Nike (NKE) gaining on last weeks solid earnings report by gaining another 4.8% this week.

In the month of June, the Nasdaq again led the way, moving 5.5% higher as investors moved back into growth stocks and away from the cyclicals. The S&P500 managed a 2.2% gain, coming home with a wet sail after spending much of the month below water. While the Dow finished flat for the month, gaining only 27 points, after being held back by losses from Honeywell (HON), Dow (DOW), and Caterpillar (CAT) who lost 5%, 7.5%, and 9.7% respectively.

For the six months of 2021 to date, it’s the S&P500 leading the way for the top three with a 14.4% gain for the first half of the year. The Dow and the Nasdaq are both tied for second with 12.5%, while the Russell 2000 small-cap index is up more than 17% in the same period. It’s a strong sign for the markets. The S&P500 has never seen a negative annual decline when it has been up by double digits in the first six months. Its average gain for the second half of the year when it has made more than 12.5% in the first six months is a gain of 9.7%.

The oil price bounced again this week, hitting US$75 a barrel. And it’s no surprise that energy stocks lead the way so far in 2021. The top two S&P500 stocks for 2021 are Marathon Oil Corp (MRO) and Diamondback Energy (FANG) up 112% and 105% respectively, with Occidental Petroleum (OXY) and Devon Energy (DVN) in fourth and fifth place with gains of 89%. They are split by body care product maker and women’s apparel retailer L Brands (LB) who are up 97.8% so far in 2021.

Over on the Dow, it’s the financials and yet another energy company that top the headline index. Goldman Sachs (GS) is the top dog with a 42.2% gain for the year to date. It’s closely followed by American Express (AXP) in second spot with a gain of 38.07%. Chevron (CVX) rounds out the top three with a 25.77% move higher, while JP Morgan (JPM) and Walgreens Boots (WBA) have gains of 23.62% and 22.14% respectively.

Moderna (MRNA) leads the Nasdaq for the year to date with a 125.05% gain. The drugmaker has benefitted from the US’s successful rollout of their covid 19 vaccines. Semiconductor stock Applied Materials (AMAT) is second with a 59.85% gain, with Nvidia close behind with a 54.82% rise. Alphabet’s (GOOGL) two asset classes take up spots 4 and 6 with gains of around 40%. They are split by drug maker Biogen (BIIB) with a 42.5% gain.

The nonfarm payrolls were strong this week, after disappointing in the previous two months. 850,000 Americans found jobs in June, almost 150,000 more than economists were expecting. It was a great number for the stock market. Large enough to show that the job market was bouncing back, but not large enough to have the Fed take any interest. The unemployment rate jumped unexpectedly to 5.9% when analysts were expecting 5.6%.

Earlier in the week, we saw house prices for April jump 14.6% which kicked off buying in the homebuilding sector. The sector also saw relief later in the week as lumbar prices fell dramatically on Wednesday, falling more than 40%. The falls come after lumbar hit a record high of $1670 per thousand board feet on the 7th of May. June saw the commodity have its worst month on record, dating back to 1978.

Of the earnings results last week Bed Bath and Beyond (BBBY) beat on revenue but missed on profits as digital sales made up 38% of total sales. The homeware retailer also raised its full-year guidance with BBBY initially jumping by more than 20%, thought to be the result of a short squeeze, and finally settling around 5% higher by session close. Constellation Brands (STZ) also beat earnings and gained 1.3%, while Walgreens Boots (WBA) also beat estimates but dropped more than 7%. It is still up 22.14% year to date.

The week ahead is a shortened one with the market closed tonight for the Independence Day long weekend. It’s also going to be a quiet one with earnings thin on the ground until initial second-quarter results start to kick off next week. Data reports are also quiet, but we will see the FOMC minutes following their last meeting a few weeks ago.

Have a great week.