·    Markets responded favorably coming out of the holiday weekend.

·    Coronavirus death rates are declining, but health experts warn against complacency.

·    The movement to reopen schools this fall sparks concerns from teachers.

CURRENT MARKET DRIVERS

·    Investors are conflicted by hopeful economic data and coronavirus infection spikes.

·    Low mortgage rates are helping consumers offset increasing home prices.

THINGS TO LOOK FOR

·    It should come as no surprise that tech stocks have been leading the way this week, which began with a strong Monday uptick. Netflix and Amazon both hit highs and the Nasdaq approached the 10,500 level. The markets took a breather on Tuesday as jitters from increasing coronavirus infections shook confidence. Wednesday lacked direction. The usual tech companies took the lead, but coronavirus worries and discussions as to what a new stimulus package would potentially look like raised concerns.

·    As we head deeper into summer, the markets will continue down a reactionary path, alternating between positive data (like last Thursday’s jobs numbers) and concerns over the reopening and what potential new damage the virus could pose to America’s economy and education system. If fatalities increase, that could rattle the markets. If death rates continue to decline, it could calm investors’ fears because the virus will potentially be weakened without the elusive vaccine people hope can be produced.

ECONOMIC VITAL SIGNS

·    An upward bias could be detected in volatility the past three days, though the index remains below 30. The 10-year yield has struggled to exceed the 0.70% level, bobbing in the 0.65-0.68 range.

Volatility Index: 28.07

10-year Treasury: 0.67

 

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