Stocks had an interesting day yesterday that started late Monday night after Peter Navarro almost went and f*cked everything up by saying the US-China trade deal was "over." By the time we all woke up on Tuesday, Navarro had walked back his statements, and the markets recovered.
The Nasdaq had a modest .74% gain yesterday, but finished the session in the black for a record eighth straight day, hitting an all-time high. It was powered by Apple's surge following the developments that the company released at WWDC. Tim Cook's crew is also on a hot streak of its own, hitting a new personal best, closing at $366.53.
All three indices closed up on the day, with the Dow and S&P finishing up .5% and .43%, respectively.
The gang's all here
But not all indices (comebacks) are created equal...
Year to date, the Dow is down 8.3%, while the S&P is still 3.1% below where it started the year. And the Nasdaq? Well, it's out here living its best life, up 13% on the year. That's the biggest disparity between the Dow, which contains some of the US' largest companies, and either the S&P or Nasdaq since 1983.
But why? One word: tech. Four of the five FAANG stocks plus Microsoft account for 40% of the Nasdaq and 20% of the S&P index. And ICYMI, tech, consumer discretionary and communication stocks have had themselves a pandemic... while shares in the energy, financial and industrial sectors have been battered.
The bottom line...
"It will just work itself out naturally."
Word on the (financial) street is that pension funds are about ready to take some profits from all these gains, and put the money into bonds.
Analysts estimate that pension funds could rebalance their portfolios to the tune of $76B (read: leave equities for fixed income). June 30th marks the end of Q2 and the end of the month, which means many portfolio managers will need to bring their asset allocations back in line.
Don't say I didn't warn you...
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