Stock Traders Ride Growth-Into-Value Rotation: Markets Wrap

(Bloomberg) -- Another batch of strong economic reports added fuel to the rotation into stocks that stand to benefit the most from a U.S. reopening.

Almost every major group in the S&P 500 advanced, while technology companies underperformed. The benchmark gauge of American equities rose for a sixth straight day -- the longest winning streak since February. The dollar strengthened against all of its Group-of-10 currency peers. Oil climbed, with an OPEC+ deal left in limbo after producers earlier signaled a tentative agreement to gradually increase supplies through the end of the year.

U.S. manufacturing expanded at a solid, yet slightly slower pace in June, with a measure of prices paid for materials hitting an almost 42-year high. Applications for state unemployment insurance fell last week by more than projected, reaching a fresh pandemic low. The figures come ahead of Friday's monthly payrolls report, which will help shape expectations of when the Federal Reserve might start tapering stimulus.

“With economic and earnings growth prospects robust, policy accommodative, and valuations still appealing relative to bonds, we believe the current environment is supportive of further equity gains,” Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note to clients.

However, Haefele is among the strategists advising investors to brace for bouts of volatility ahead. He cites inflation concerns, the spread of coronavirus variants and geopolitical tensions as potential catalysts.

Among the corporate highlights, Robinhood Markets Inc. filed for an initial public offering, disclosing it became profitable last year only to have its losses skyrocket in the first quarter. Walgreens Boots Alliance Inc. sank after the drugstore chain signaled a slowdown in earnings growth and an increase in investments over the coming months.

Here are some events to watch this week:

• ECB President Christine Lagarde speaks Friday
• The U.S. jobs report is due Friday

These are some of the main moves in markets:

Stocks

• The S&P 500 rose 0.5% as of 4 p.m. New York time
• The Nasdaq 100 was little changed
• The Dow Jones Industrial Average rose 0.4%
• The MSCI World index rose 0.2%
• The Russell 2000 Index rose 0.8%

Currencies

• The Bloomberg Dollar Spot Index rose 0.3%
• The euro fell 0.1% to $1.1846
• The British pound fell 0.5% to $1.3757
• The Japanese yen fell 0.4% to 111.55 per dollar

Bonds

• The yield on 10-year Treasuries was little changed at 1.46%
• Germany's 10-year yield was little changed at -0.20%
• Britain's 10-year yield advanced one basis point to 0.73%

Commodities

• West Texas Intermediate crude rose 2% to $74.97 a barrel
• Gold futures rose 0.3% to $1,776.50 an ounce

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