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- Markets rallied again today, with the Dow and Nasdaq both up 1.33%, almost fully reversing the losses resulting from Brexit, with an only 0.34% drop in the Dow since Thursday’s close. This volatility is partially caused by the combination of a sanguine domestic outlook with international turmoil — according to the Wall Street Journal, GDP models forecast 2.7% growth in the second quarter, versus 1.1% the previous quarter this year.
- U.S. utility stocks have acted as a safe-haven for investors, with the sector rallying the day of Brexit; the SPDR Utilities (XLU) are up 4.27% since Thursday’s close. This flight to safety has caused the Dow, composed of blue-chip companies, to rise more than the Nasdaq Composite, showing that this a contributing factor to why the Dow is down 0.34% since Thursday’s close but the Nasdaq is down almost a full percent.
- T-Note yields are recovering, corresponding to a decrease in bond prices. This also demonstrates that investors are more confident and demanding stocks by showing that they are willing to forgo higher yields in the bond market in favor of stocks — there is usually a negative correlation with bond prices and the stock market and a positive correlation with bond yields and the stock market. This may be a sign that the market is set for a full recovery.