US Close: Stocks continue to grind higher into record territory, Markets locked on tomorrow’s CPI report and bank earnings

After a successful Virgin Galactic winged plane trip to outer space, shares plunged after the company filed to sell up to $500 million in common stock. Virgin Galactic is striking while the iron is hot and securing much needed capital to ramp up passenger flights.

Disney shares are rallying after a dazzling performance by “Black Widow”, which saw $80 million made in theaters and $60 million with Disney Plus. Disney just shook up the script in the streaming wars battle. Disney delivered the biggest blockbuster results since the pandemic, and it is largely due to their strategy for content. Disney’s superhero content is an easy strategy, and it is working. They are moving most of the Marvel content to Disney + and that franchise appears poised to dominate indefinitely.

J&J shares were under pressure after the Washington Post reported that the FDA is preparing to announce a new warning for the J&J COVID-19 vaccine. A CDC statement noted that about 100 preliminary reports of Guillain-Barré have been detected after 12.8 million doses of Johnson & Johnson vaccine were administered. This is another blow for the J&J vaccine that is clearly behind the mRNA COVID-19 vaccines.

NY Fed Inflation Expectations

The NY Fed showed the highest one month increase in the inflation expectations survey. The median one-year-ahead inflation expectations jumped almost a full percentage point in June to 4.8%. Long-term expectations remained unchanged. The 3-year inflation expectation remained steady at 3.6%. It was another upbeat survey as expectations for the labor market, household income, and spending growth continue to trend in the right direction. The NY Fed survey along expectations for tomorrow to deliver slightly benign data could support the inflation is transitory argument.

FX/Treasury

The currency market will continue to react with whatever happens in the bond market and right now many traders continue to believe in the reflation trade. JPMorgan’s Asset Management team believes the rally in the bond market has gone too far, growth could be stronger, and that the market has not priced in enough rate hikes.

The dollar is slightly firmer as global growth concerns continue to trigger some safe-haven flows into the dollar. The US is seeing cases rise as delta variant spreads across many states with low vaccination rates. The 47% surge in the week ended Sunday was the largest increase since April 2020 and it served as a reminder to the rest of the world on how hard it is to defeat this virus.

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