NEW YORK – Wall Street stocks put in a strong performance in the first half of 2021, ending on a mostly upbeat note yesterday, with the S&P 500 posting its fifth straight record even as the Nasdaq joined European bourses in moving lower.
Investors have cheered as the global economy edges back to life with coronavirus vaccines becoming more widespread, even as new Covid-19 variants continue to pose risks.
The broad-based S&P 500 climbed 0.1% to 4,297.50, lifting the gain for the second quarter to more than 8%. And investor enthusiasm has sent the index up more than 14% since the start of the year.
The buoyant market lifted “all sizes, styles, and sectors,” said Sam Stovall of CFRA Research, which ranked the S&P 500’s gain in the first half of 2021 as the 13th best in the last 76 years.
The latest records have come on the heels of mostly solid economic data in recent weeks that show how coronavirus vaccines have transformed the global outlook compared with a year ago.
Private US firms added 692,000 jobs in June, according to payroll services firm ADP. The figures were a big drop from May, but well above economists’ expectations and bode well for the key government employment report tomorrow.
Other recent reports have shown strong consumer confidence and rising home prices, while corporate earnings have also won cheers, with large banks saying consumers are keeping up with their credit card bills and companies like Nike, General Motors and Target seeing strong sales.
“The macro outlook continues to improve,” said Paul Gruenwald, global chief economist at S&P Global Ratings, which raised its 2021 forecast.
But S&P noted that “risks are shifting from those that are pandemic-related to those that are rebound- and exit-related,” especially inflation.
Key questions for stocks the rest of the year centre on the ability of the Federal Reserve and other central banks to manage a transition away from ultra-accommodative monetary policy.
European markets retreat
In Europe, the main markets swerved lower yesterday.
The London stock market shed 0.7% after data showed the British economy shrank by slightly more than expected in the first quarter before a subsequent easing of lockdown restrictions.
Gross domestic product contracted by 1.6% in the three months to March, down from the previous estimate of 1.5%.
Frankfurt dived 1.0% and Paris dropped 0.9%.
European equities still had a decent quarter, with London’s FTSE 100 rising 4.8% and the CAC 40 in Paris jumping 7.2% higher.
The DAX 30 rose 3.4% having set new record highs.
Oil prices climbed on hopes for upbeat demand as traders await today’s meeting of OPEC and other key crude producers.
Both main oil contracts are sitting around multi-year highs, helped by fresh data showing lower commercial oil stocks in the United States. – AFP, July 1, 2021
