/ June 04
Daily Briefing
*The stock market got on a winning track yesterday morning and it showed little intention of getting off it once it did, largely dismissing an afternoon contention from Elon Musk that the "one big, beautiful bill" is a "disgusting abomination" since it will massively increase the budget deficit; small-cap stocks, mega-cap stocks, and semiconductor issues led the day’s gains, which had some grounding in growth optimism and continued backing from momentum buyers;
*The start was a bit sluggish, with some consolidation interest in the air; the indices gained some traction around 10:00 a.m. ET, however, following an April JOLTS - Job Openings Report that showed a pickup in openings;
*That was viewed as a good indication for the labor market, which conveyed some encouraging thoughts about the growth outlook in spite of the OECD downgrading its 2025 global GDP growth forecast to 2.9% from 3.1% and its U.S. GDP growth forecast to 1.6% from 2.2% and China's Caixin Manufacturing PMI for May registering its weakest reading (48.3) since 2022;
*The best-performing sector was the information technology sector (XLK, +1.5%), which was led by NVIDIA (NVDA, +2.9%) and the semiconductor stocks; the energy sector (XLE, +1.1%) was next in line, followed by the materials (XLB, +1.0%) and industrials (XLI, +0.8%) sectors, exposing the pro-cyclical orientation;
*The Russell 2000 (+1.6%), led by its banking and energy components, outpaced the other major indices; buying efforts, though, were broad-based;
*Advancers led decliners by a better than 2-to-1 margin at the NYSE and Nasdaq; like the day before, the advance unfolded on below-average trading volume at the NYSE and Nasdaq;
*Separately, Treasuries were little changed from Monday's settlement levels but saw some intraday movement; the 10-yr note yield, which dipped below 4.41% in the overnight futures trade, settled unchanged at 4.46%, while the 30-yr bond yield, which slipped to 4.93%, settled at 4.98%, down two basis points;