Nasdaq marches higher ahead of Fed minutes

Jul. 07, 2021 6:18 AM ETInvesco QQQ ETF (QQQ), SPY, DIABy: Yoel Minkoff, SA News Editor8 Comments

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  • Tech is in the lead again... The Nasdaq was the only major average to rise to a fresh all-time high on Tuesday after the S&P 500 snapped a seven-day winning streak. Cyclical shares also pulled back, while Big Tech stocks like Amazon shined bright. The trend continued overnight, with Nasdaq futures rising 0.5% and contracts linked to the S&P 500 and Dow up 0.2% and 0.1%, respectively.
  • "It is really the tech space that's been driving the market," said Esty Dwek of Natixis Investment Solutions. "Over the next few weeks and months, hopefully we'll see that U.S. growth is holding up well, that will continue to support markets."
  • Fed minutes: The next catalyst for stocks and bonds will be released at 2 p.m. ET. The behind-the-door discussions are expected to be dovish as the central bank remains unconcerned about inflation trends and continues to look for progress in the labor market. Any signals of bond tapering will also be watched, which could signal a retreat from current easy policies.
  • Go deeper: The minutes will also be of particular interest to the bull forces which have taken control of the Treasury market. On Tuesday, the 10-year yield fell to its lowest level since February, while the 30-year yield tested its closely-watched 200-day moving average. At 1.34%, the 10-year yield is now even closer to 1% - than the 2% many analysts had forecast for the end of the year. Are investors pricing in a major risk from the OPEC+ crisis, which could see a price war-induced oil slump weigh on inflation estimates and support bonds?

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