Record highs for Nasdaq and S&P 500

Gamble

The only way is… up?

The Nasdaq reached a record high on Monday 14th June 2021 as investors were tempted back into growth stocks ahead of a Federal Reserve two day meeting due to start on Tuesday 15th June 2021

Nasdaq

The Nasdaq tech loaded index climbed 0.7% to an all time closing high of: 14174 clearing the previous record on 26th April 2021.

S&P 500

The S&P 500 gained around 0.2% to make another record close at: 4255 boosted by technology sector gains. The Dow Jones Industrial Average slipped 85 points to 34394 after also reaching all time highs in previous sessions.

Growth stocks re-visited

Investors are giving growth and tech stocks another go as bond yields retreat. The 10 year U.S. Treasury yield fell below 1.43% to a three month low. Inflation is still exerting pressure on interest rates.

Tech in focus again

For example, Ark Innovation, an ETF run by Cathie Wood that focuses on disruptive technology, returned about 6% last week. The fund gained 1.9% Monday 14th June even as the Treasury yield rose briefly back to 1.5%. Apple, Netflix, Amazon, Microsoft and Facebook all registered gains. It is worth noting that all tech was hit recently as cryptocurrencies took a knock.

Tesla

Tesla CEO Elon Musk on Sunday played the market again as he suggested his company will resume Bitcoin transactions once it confirms there is a 50% target of clean energy usage by miners. Is Bitcoin with its lack of green credentials a good buy for a green energy company. What exactly is Tesla as a company anyway – a tech company, a car manufacturer, a green energy business or a giant Bitcoin wallet? Bitcoin recovered back above $40,000 on Monday 14th June

Tesla, now a big holder of bitcoin after a recent purchases, climbed nearly 1.3%. Musk in recent weeks has tweeted his dislike and like of Bitcoin – pushing the crypto around.

It has been suggested his ‘interference’ has manipulated market movement and that many crypto ‘gamblers’ have lost fortunes on the back of such flippant comments – some have also gained fortunes.

In line

The general stock market’s modest performance is pretty much in line with historical patterns, specifically June’s tendency for quieter trading. As the market continues to sort through potential moves made by the Fed to attempt to control looming inflationary pressure.

Fed time again

The Fed’s two-day policy meeting will likely dominate investor trading this week. Although the central bank is not expected to take any action yet, however, its forecasts could move the markets.

The Fed could possibly move its forecast for a rate hike after saying in its last quarterly update, that it would keep the interest rate near zero through 2023…

Fed Chairman Jerome Powell will comment after the central bank issues its statement Wednesday 16th June. Investors will be combing through his remarks for any clues as to when the Fed could start to ‘taper’ and therefore begin to end its aggressive monthly asset purchases, especially with hotter-than-expected inflation readings.

Hedge fund manager says

Billionaire hedge fund manager Paul Tudor Jones said that this week’s Fed meeting could be the most important of Powell’s career, and he warned that the chairman could spark a big sell off in ‘risk assets’ if he doesn’t do a good job of signalling a taper. He went on to suggest that you could very well see a correction if the Fed does not play this right.

Winner

The Nasdaq was the clear winner with a gain of nearly 1.9%, posting its fourth winning week in a row as tech trades again came back into focus.

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