Stock Market Today: Technology Sizzles, But Gold Steals the Show
The Nasdaq had a big Monday on the back of mega-cap tech and chip stocks, but gold's new highs were the talk of Wall Street.
Tech stocks took the lead Monday ahead of what will be a busy week for the sector, but most of the day's attention went to gold prices, which settled at new all-time highs.
"This is the busiest week for the 2Q earnings season," Credit Suisse analysts write, "with over 180 companies representing 43% of the S&P 500’s market cap reporting results, including 4 of the top 5 biggest names."
That refers to Apple (AAPL, +2.4%), Amazon.com (AMZN, +1.5%) and Facebook (FB, +1.2%), which all advanced solidly on Monday, and which we preview in this week's earnings calendar. Google parent Alphabet (GOOGL, +1.4%) also will reveal its quarterly results this week.
Investors remain hopeful for new federal stimulus measures, which are expected to be hashed out this week. Senate Republicans plan to release their proposal today, and while it's expected to include $1,200 checks once more, it's also expected to reduce the weekly unemployment "bonus" from $600 to $200.
A strong day for the mega-cap tech stocks above, as well as chipmakers not named Intel (INTC, -2.0%) – including Qualcomm (QCOM, +4.3%), Lam Research (LRCX, +3.6%) and Applied Materials (AMAT, +3.9%) – led the Nasdaq Composite 1.7% higher to 10,536. INTC stock continued to slump in the wake of last week's announcement that its 7-nanometer chips would be delayed by half a year.
The Dow Jones Industrial Average improved a more modest 0.4% to close at 26,584, and the S&P 500 improved by 0.7% to 3,239. The small-cap Russell 2000 gained 1.1% to 1,483.
Gold Is the Star of the Show
Gold futures jumped 1.8% to $1,931 an ounce, its highest settlement in history, to continue a rip-roaring 26% year-to-date rally in the yellow metal.
And gold could continue running, thanks to the possibility for further declines in the U.S. dollar, higher inflation and lower Treasury yields – factors that lead Deutsche Bank analyst Michael Hsueh to write that "the gold rally is far from over" in a recent note.
"Within this bull market cycle, it is only a modest stretch to envision fundamentals falling into place for USD 2,000/oz to be within reach," Hsueh writes. "In fact, we think fundamentals will support a range between USD 2,000-2,100/oz, well before the market begins to anticipate Fed tightening."
If you're new to gold investing, check out our primer of facts you should know about the metal. If you're ready to invest in gold, funds that invest in actual physical bullion or mining companies are your easiest options. You can use ETFs to buy silver, too, which is having itself a ball at roughly 36% YTD gains that have brought it to multiyear highs.
But if you only have eyes for gold, consider these seven funds that easily (and typically cheaply) let investors leverage the world's favorite precious metal.