Stocks continued trade in mixed fashion amidst rising interest rates and continued talks of tariffs. The Dow stayed pretty flat for most of the day, but ultimately closed down 25 points to finish at 25,175, with an average amount of trading volume. The NASDAQ, on the other hand, continued to make gains and set new record highs, closing up 65 points for the day, which was almost a 1% gain.
As a whole, the economy continues to show signs of strength as retails sales jumped again, with 0.8% growth for the month of May. Economists are suggesting that the tax cuts could be boosting recent consumption, and now it seems that President Trump’s prediction of 4% growth, back in December, may be close to coming true. Considering projected growth rates of 3.6% to 3.8% annually, the Fed decided to raise interest rates another quarter percent yesterday. This caused the yield curve to flatten a little bit, which provided some short term negative sentiment for financial companies.
Tech continues to lead the market, and almost be a safe haven, as they are generally less affected by rising interest rates and trade tariffs. This is bad news for the shorts as the 4 most “bet against” stocks are tech companies, Tesla, Apple, Amazon, and Netflix. Apple is up roughly 10%, Amazon is up almost 50%, and Netflix has nearly doubled, year to date. Elon Musk has been taking the bets of Tesla short sellers, as an SEC filing disclosed that he bought another $25 million of Tesla stock over the last couple days. Tesla is up 18% for the month of June, and short sellers have lost nearly $2 billion this month. Telsa has also announced the layoff of 3,000 employees (none related to Model 3 production) in order to improve efficiency and profitability – interestingly enough, many of the employees had good things to say on their way out.