Big Tech Drives S&P 500 to 12th Record in August: Markets Wrap

(Bloomberg) -- Stocks climbed, led by some of the world’s largest technology companies. Traders also assessed the impacts from Tropical Storm Ida, which sank insurers and energy firms, while pushing gasoline higher.

The S&P 500 notched its 12th all-time high in August, and the Nasdaq 100 rallied as Apple Inc.’s market value topped $2.5 trillion. Robinhood Markets Inc. and Charles Schwab Corp. slid as Securities and Exchange Commission’s Chairman Gary Gensler told Barron’s that a full ban of payment for order flow is “on the table.” Zoom Video Communications Inc. sank in late trading after giving a sales forecast that fell short of some analysts’ estimates.

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As the earnings season draws to a close, the S&P 500 is on track for its seventh straight monthly advance -- the longest winning streak since January 2018. Federal Reserve Chair Jerome Powell did just enough last week to preserve the view that his goals align with investors’: growth that is fast enough to boost hiring and corporate profits, but not inflation. U.S. pending home sales fell in July, while traders looked to Friday’s payrolls data for a guide as to whether there’s any slowdown.

“Tactical investors should tilt portfolios in favor of stocks over bonds,” said Ryan Detrick, chief market strategist at LPL Financial. “This certainly does not mean that an exogenous shock could not cause stocks to correct. However, when looking at the recent pace of earnings, the policy environment and market history, we fail to see a compelling bear case against equities.”

For veteran strategist Robert Doll, while the equity-market rally may be getting “a little tired,” it has more than enough fuel to continue.

A “still good” economy means that stocks will “generally go up,” Doll, chief investment officer at Crossmark Global Investments Inc., said in an interview on Bloomberg TV’s Surveillance Monday. “A good economy means good earnings, so the path of least resistance has been and likely will continue to be to the upside.”

Some other corporate highlights:

• Affirm Holdings Inc. surged after entering a partnership with Amazon.com Inc. to help consumers finance large purchases made on the e-commerce giant’s website.
• Vinco Ventures Inc., a digital media company, and software firm Support.com Inc. extended rallies fueled by retail investors in chatrooms like StockTwits and on Reddit.
• Airlines fell as European Union countries voted to reimpose restrictions on non-essential travel from the U.S. amid a surge in coronavirus cases.
• Chinese gaming stocks listed in the U.S. were under pressure after regulators in Beijing cut back the amount of time minors can play each week, with NetEase Inc. and Bilibili Inc. dropping.

Here are some key events to watch this week:

• OPEC+ meeting on output Wednesday
• Euro zone manufacturing PMI Wednesday
• China Caixin manufacturing PMI Wednesday
• U.S. jobs report Friday

For more market analysis read our MLIV blog.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.4% as of 4 p.m. New York time
• The Nasdaq 100 rose 1.1%
• The Dow Jones Industrial Average fell 0.2%
• The MSCI World index rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.1799
• The British pound was little changed at $1.3761
• The Japanese yen was little changed at 109.90 per dollar

Bonds

• The yield on 10-year Treasuries fell three basis points to 1.28%
• Germany’s 10-year yield declined two basis points to -0.44%
• Britain’s 10-year yield was little changed at 0.58%

Commodities

• West Texas Intermediate crude rose 0.5% to $69.05 a barrel
• Gold futures fell 0.4% to $1,813.10 an ounce

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