The temperamental exuberance of the markets flat like a pancake | Nasdaq


Markets closed regular trading flat on Monday, after a morning high that saw investors react to a stronger-than-expected Empire State inquiry, and eagerly awaiting the $ 1.2 trillion chant Bill on infrastructure enacted by President Biden, which is happening as of this writing. The Dow Jones and the Nasdaq were both at -0.04% on the day, while the S&P 500 closed at + 0.001%. Only the small cap Russell 2000 had any depth to its performance today, ending down -0.45% on the day.

The Dow Jones was +136 points at the session high and the Nasdaq has just ended a two-day winning streak in the markets. For the S&P 500, it remains within 1% of its all-time high. So, what we may be seeing today is a “sell the news” event, especially with regard to the long-awaited infrastructure bill which is finally enacted.

For proof, just look at the stocks of building and basic materials for the past month: Vulcan Materials VMC and Martin Marietta MLM are both + 12%, and the Monday trading average is stable over the day. Analysts continue to scrutinize the inflation creeping into the economy, as well as the tools used to fight inflation, either potentially ineffective or actually contributing to further pressures pushing up prices.

As Treasury Secretary and former Fed Chairman Janet Yellen recently said inflation could be brought under control if the workforce increases in a timely manner. Increasing productivity has traditionally been a good remedy for limiting inflation, as is increasing interest rates. However, with the Fed only having started its reduction process today, the rate hike is still a long way off, and if much higher wage growth (which is already clearly on the rise) is needed to bring it about. -Working at the desired capacity, this could in fact exacerbate inflation conditions.

The Infrastructure package also includes 7.5 billion dollars for the construction of charging stations for electric vehicles. As a result, the EVB market had experienced a spike in stock prices. No higher, in fact, than Rivien RIVN, which just completed the most successful IPO in recent memory last week. Rivian shares are up another 15% today, now + 90% since the IPO. On the other side of the coin, Tesla TSLA has so far waived -11% month to date. While no one sees Rivian as a direct competitor to Tesla in 2021 or 22, what this exchange suggests is that a limited amount of money is being invested in the electric vehicle market right now, even with the strengthening of the market. infrastructure.

Tomorrow morning brings Walmart WMT third-quarter tax results, with expectations edging up year-over-year: to $ 1.39 per share on $ 135.74 billion in revenue for the quarter. Walmart is looking for its third consecutive positive earnings surprise. Shares are + 3.7% last month, but stable since the start of the year.

Walmart is also leading the wave of big box retailer reports this week, which also includes Zacks Rank # 1. Macy’s M, Zacks Rank # 2 Home Depot HD and Zacks Rank # 3 Target TGT. Walmart also holds a rank 3 of Zacks in tomorrow’s release, with a Value-Growth-Momentum score of A.

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