[Platinum Insights] (7.3.23)

Good morning. 

All major U.S. financial markets will be closed on Tuesday July 4, in observance of the Independence Day holiday. Additionally, major U.S. stock markets will close early at 1 pm ET today. 

Markets are little changed this morning as shares of electric vehicle maker Tesla surged after reporting a record number of vehicles deliveries in the second quarter. 

On Friday, the Nasdaq Composite closed out its best first-half performance since 1983, surging 31.7%. The S&P 500 also rallied 15.9% for its best first half since 2019 while the Dow climbed 3.8%. Those gains came on the back of a strong rally in technology stocks amid enthusiasm around artificial intelligence and related companies. 

Investors now look ahead to the latest ISM Manufacturing PMI and S&P Global Manufacturing PMI for June this morning. 

Apple’s share price has soared 49% so far this year, ballooning its weight in stock indexes to record levels and pushing its market capitalization over $3 trillion. The company’s weighting in the S&P 500 has swelled to 7.6%, the biggest of any one stock in the history of the benchmark index, according to S&P Dow Jones Indices. That hefty weighting means moves in Apple’s shares have an outsized influence on index performance. 

The ISM Manufacturing PMI in the United States fell to 46 in June 2023, the lowest since May 2020, from 46.9 in May and below forecasts of 47. The reading pointed to a faster rate of contraction in manufacturing, with companies managing outputs down as softness continues and optimism about the second half of 2023 weakens. 

“Demand remains weak, production is slowing due to lack of work, and suppliers have capacity. There are signs of more employment reduction actions in the near term”, Timothy Fiore, Chair of the ISM said. In June, declines were seen in new orders (45.6 vs 42.6), production (46.7 vs 51.1), employment (48.1 vs 51.4), inventories (44 vs 45.8) and backlog of orders (38.7 vs 37.5). Also, price pressures eased (41.8 vs 44.2) and the supplier deliveries index increased to 45.7 from 43.5, a sign manufacturing lead times improved again. 

On the other hand, the customers’ inventories index dropped into ‘too low’ territory (46.2 vs 51.4), a positive for future production. source: Institute for Supply Management

We should see a low volume trading day as the session will be cut short for an early start to the Independance Day holiday on Tuesday. 

Be patient and let the markets work for you. Follow your trading plan to reduce emotional decisions and know your risk tolerance. 

Have a great day