Once again, tech stocks ramped the markets to record highs. Yesterday, AAPL rose 1.2%, Facebook increased 1.6% and Amazon advanced 0.7%. Airline carriers also got in the mix as they rolled out more elaborate cleanings operations and COVID-19 treatments took further steps toward public release.
The market seemed to be also making hay while the sun shined. COVID-19 cases continued to decline across the country, and its possible we may see a day soon with less than 10,000 new cases. If the U.S. is a safe place to do business, then stocks have even more room to run.
But, which stocks have room to run? Ok, check, Big Tech has proven its breadth, but other stock groups and sectors were down during some of these record highs. Healthcare has struggled and travel, besides a solid day today, has been a whipping post at times.
In other news, the man holding the money bazooka, Jerome Powell, is preparing for a seminal speech on inflation, according to reports that hit most networks yesterday afternoon. Powell will speak virtually about pushing inflation rates higher. The Fed has considered healthy inflation to be 2%, but it is presumed Powell will let inflation run above that during this time.
The reason? The Fed studied a recent drop in core PCE inflation and found that the virus causing a decline in the demand for goods. So, when people expect prices to rise — which they will after the Fed announces inflation will run up— they buy more to avoid price increases. This creates demand and a healthy economy.
In other news, the Dow gets a shakeup. Say hello to Salesforce, Honeywell, and Amgen. See ya later to Exxon, Raytheon, and Pfizer. This is especially brutal for Exxon, which used to be the Dow’s largest company.
One other thing we are watching is the IPO of Unity Software. In a sense, Unity is the guy-behind-the-guy in the video game world as they sell the software that allows video game developers to develop games. Well, how many you ask? More than half of the last 1,000 popular games that were popular across any platform — think Call of Duty: Mobile or Pokemon Go — were built on Unity’s platform. The technology is nice, but not as nice as the timing. Unity’s platform rivals Epic Games’ Unreal Engine platform, and if Apple shuts down Unreal Engine, it would leave Unity’s platform as one of the only games in town. Pun intended.
Across the Atlantic, France’s CAC 40 added 0.8% in early trading to 5,048.42, while Germany’s DAX gained 0.6% to 13,146.02. Britain’s FTSE 100 edged 0.1% higher, to 6,111.31.
U.S. shares were set for gains, with Dow futures rising 0.5% to 28,380. S&P 500 futures were up 0.4% to 3,439.38.
Below you can find some of the most notable stocks to watch today.
An energy picks-and-shovels stock that we believe is undervalued. The company builds oil platforms and handles other offshore oil operations. Its balance sheet is not perfect, but its backlog is robust and we love that for long-term growth.
Traders might be underestimating the transformation of VIAV. The company has gone from the 5G lab to field deployments, a change in its model, and we see the company as an important part of the technology loop. In July, VIAV beat EPS estimates by 55%.