Stocks were mostly higher Monday, and the S&P 500 briefly rose above its Feb. record closing high again during intraday trading. Amazon led a rally in mega-cap tech stocks, and Tesla jumped more than 11% to a record high. The Nasdaq Composite closed at a record high.
Gold futures (GC=F) rose, after futures closed out Friday back below $2,000 and posted their first weekly decline since June. Shares of Barrick Gold (GOLD) rose as much as 12% at session highs, after filings late last week revealed Warren Buffett’s Berkshire Hathaway took a new position in the company during the second quarter. The 10-year Treasury yield (^TNX) retreated below 70 basis points after breaking above that level for the first time in over a month last week.
Over the weekend, uncertainty over the future of US-China relations increased, after a meeting that was supposed to take place Saturday between US and Chinese negotiators over terms of their Phase 1 trade deal was pushed back, according to reports from outlets including CNBC and Bloomberg. The discussions, which were set to involve a video conference call between Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, are reportedly now delayed indefinitely.
Elsewhere in politics, the Democratic National Convention kicks off this week as a predominantly virtual event, during which former Vice President Joe Biden is set to accept the presidential nomination alongside his recently announced running mate Sen. Kamala Harris. On the virus-related stimulus front, lawmakers remain on August recess until mid-September, with no apparent discussions between top negotiators over another coronavirus relief package having taken place in more than a week.
Corporate earnings season is set to wind down this week, though a host of major retailers including Target (TGT), Walmart (WMT), Home Depot (HD) and Lowe’s (LOW) are still set to report results. The economic data calendar will comprise a host of housing market data – including monthly housing starts, building permits and existing home sales reports – along with the release of the Federal Open Market Committee’s (FOMC) July meeting minutes on Wednesday.
Amid these developments, stocks have remained just short of record levels as market participants await the next catalyst to launch higher. Goldman Sachs analysts last week said they saw room for the S&P 500 to rally to 3,600 amid faster US economic growth and vaccine prospects. And Fundstrat’s head of research Tom Lee last week raised his price target on the S&P 500 by 75 points to 3,525, reflecting the potential for “reopening” stocks hardest hit by the pandemic to catch up with the rally seen in other sectors over the past few months.
With the S&P 500 hovering less than 1% from its February record high – and having briefly crossed that level during intraday trading Monday – some analysts have struck a more cautious tone, however.
“It’s pretty remarkable that we’re talking about reaching these new all-time highs. The market’s ignoring a lot of big risks right now. The tensions in terms of the fiscal stimulus in Washington, which continues to get pushed out. Obviously this sort of renewed breakdown in US-China relations, and let’s not forget, in 82 days we have a presidential election here in the US,” Emily Roland, John Hancock Investment Management co-chief investment strategist, told Yahoo Finance last week. “So if we weren’t already exhausted enough in 2020, we’re heading into a very heated political environment as well. Stocks are priced for perfection right now. We’ve got a forward PE on the S&P 500 of 22x forward earnings, and really investors are ignoring some of these big risks.”
4:02 p.m. ET: Nasdaq rises 1% as big tech stocks jump, Tesla soars 11% to a record close
Here were the main moves in markets as of 4:02 p.m. ET:
S&P 500 (^GSPC): +9.19 (+0.27%) to 3,382.04
Dow (^DJI): -85.77 (-0.31%) to 27,845.25
Nasdaq (^IXIC): +110.42 (+1.00%) to 11,129.73
Crude (CL=F): +$0.80 (+1.90%) to $42.81 a barrel
Gold (GC=F): +$43.90 (+2.25%) to $1,993.70 per ounce
10-year Treasury (^TNX): -2.6 bps to yield 0.6830%
3:35 p.m. ET: Tesla shares surge 11% hit record high after Wedbush raises price target on the stock to $1,900
Tesla (TSLA) shares rose to a record high of more than $1,800 per share during intraday trading, after Wedbush analyst Dan Ives raised his price target on shares of the electric car-maker by $100 to $1,900. Ives cited Tesla’s growth potential in China, including the company’s potential to hit a run rate of 150,000 unit deliveries in China this year, as a key component of the price target revision. He said the China growth story alone is worth $400 per share.
“We continue to believe EV demand in China is starting to accelerate in July/August with Tesla competing with a number of domestic and international competitors for market share with Giga 3 remaining the linchpin of success which remains the prize that Musk and Tesla are laser focused on capturing,” Ives wrote in the note.
Ives also cited Tesla’s impending inaugural Battery Day in September as a catalyst for the stock, with the car-maker expected to announce a number of new potential “game-changing” battery developments.
“In our opinion this battery technology will be very advanced, potentially last for decades, withstand all types of weather/terrain, and be another major milestone for the Tesla ecosystem,” Ives said. “In theory this battery will support an electric vehicle for 1 million miles and be a major step forward when competing vs. traditional gasoline powered automotive competitors from both an ROI and environmental perspective.”
1:00 p.m. ET: NY Gov. Cuomo says gyms can reopen as soon as Aug. 24 with limited capacity
New York Governor Andrew Cuomo said Monday that gyms in the state would be allowed to reopen as soon as August 24 with 33% capacity, and with customers and staff wearing masks at all times. In order to open, city governments must inspect each facility prior to opening, Cuomo said.
Shares of gym stocks including Planet Fitness and Town Sports International Holdings rose following the announcement. Stay at home fitness companies including Peloton and Nautilus turned negative before paring losses and turning modestly positive.
11:01 a.m. ET: S&P 500 briefly tops record closing high
The S&P 500 surpassed its Feb. 19 record closing high of of 3,386.15 during Monday morning trading, after also breaking above this level last week. However, the S&P 500 has not yet managed to hold onto gains above this level through market close.
The S&P 500’s all-time intraday high of 3,393.52 was also reached Feb. 19 this year.
9:33 a.m. ET: Stocks open slightly higher
Here were the main moves in markets, as of 9:34 a.m. ET:
S&P 500 (^GSPC): +11.43 points (+0.34%) to 3,384.28
Dow (^DJI): +29.65 points (+0.11%) to 27,960.67
Nasdaq (^IXIC): +62.26 points (+0.61%) to 11,088.00
Crude (CL=F): -$0.11 (-0.26%) to $41.90 a barrel
Gold (GC=F): +$22.00 (+1.13%) to $1,971.80 per ounce
10-year Treasury (^TNX): -2.2 bps to yield 0.687%
8:48 a.m. ET: Homebuilders’ sentiment jumps more than expected to match highest level on record
Homebuilders’ optimism jumped to match the highest level on record in August as low interest rates and business reopenings drove a surge in housing market activity.
The National Association of Home Builders’ (NAHB) sentiment index jumped by 6 points to 78 in August, topping consensus expectations for a rise to 74 and matching the December 1998 record reading also of 78. Reading above 50 are considered to reflect positive sentiment.
Still, the NAHB noted in its release that the speedy resurgence in home-building activity has driven heightened demand for lumber, which in turn has led to higher prices that could down the line weigh on momentum in the housing market.
7:24 a.m. ET Monday: Stock futures track global equities higher
Here were the main moves in markets, as of 7:24 a.m. ET Monday morning:
S&P 500 futures (ES=F): 3,371.5, up 10 points, or 0.3%
Dow futures (YM=F): 27,848.00, up 56 points, or 0.2%
Nasdaq futures (NQ=F): 11,209.5, up 75.75 points, or 0.68%
Crude (CL=F): -$0.07 (-0.17%) to $41.94 a barrel
Gold (GC=F): +$14.40 (+0.74%) to $1,964.2 per ounce
10-year Treasury (^TNX): -1.8 bps to yield 0.691%
6:04 p.m. ET Sunday: Stock futures open higher
Here were the main moves in equity markets, as of 6:04 p.m. ET:
S&P 500 futures (ES=F): 3,366.25, up 4.75 points, or 0.14%
Dow futures (YM=F): 27,847.00, up 55 points, or 0.2%
Nasdaq futures (NQ=F): 11,152.5, up 18.75 points, or 0.17%