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Nasdaq, S&P at New Highs: Enjoy the Froth!

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Wednesday’s bull market conducted a tidy but emphatic rotation — out of the beloved tech-oriented giants and into a broader range of industries. Signs of the greater economy returning closer to normal helped the S&P 500 post another record closing high, along with the Nasdaq, which crossed the 12K benchmark for the first time in history. The S&P 500 finished +1.53%, the Nasdaq +0.98% and the Dow, within 2% of its own all-time high, was +1.59%.

For once, as mentioned, this run-up was not led by Tesla (TSLA - Free Report) — which fell 6% on a reported sell-off from a major investor, likely on the news of the $5 billion stock offering following its 5-for-1 split Monday — nor Apple (AAPL - Free Report) or salesforce (CRM - Free Report) , both down around 2%. Instead, we saw big advances for companies envisioned to succeed in the post-COVID world: AMC Entertainment (AMC - Free Report) was +16% on news it was reopening many of its movie theaters nationwide, Starbucks (SBUX - Free Report) came in +3% as people venture past their front gates once again, and Facebook was +7% because… well, because it’s Facebook.

Industry leaders for the regular session were far from the usual suspects: Utilities and Real Estate were stronger, while Tech only saw modest gains. All major sectors posted gains Wednesday besides Energy, which somehow missed any price-firming following the Gulf Coast destruction of Hurricane Laura last week.

This morning’s ADP (ADP - Free Report) private sector payroll report came in well below expectations, which continues another curious narrative in the present market scenario whereby economic data — good or bad — has little effect on trading appetites. We’ll see if this changes at all with Friday’s non-farm payroll report, which expects to have garnered 1.2 million new jobs last month. Factory Orders for July came in exactly as anticipated, at +6.2%.

Otherwise, investors will continue to enjoy the froth in this economically overvalued but impressively resilient market.

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