Tech stocks prove superior, Nike, Apple and Microsoft combine to drive Dow higher, while Adobe designs its all-time high

By Jonathan Jackson. Published at Jun 23, 2020, in Market Wrap

US stocks rose on the back of the power of technology yesterday.

Apple shares rose 2.6 percent after it announced it would switch to using its own chips in its Mac computers. Bye bye Intel chips. Apple also unveiled new software at its annual developers conference.

The news overshadowed the fact Apple will temporarily close nearly a dozen retail stores in the US due to a spike in local COVID-19 cases.

The Dow gained more than 150 points on the strength of US tech stocks, while the NASDAQ 100 jumped more than 1%, with Adobe, Amazon.com and Square all ending at all-time highs.

All in all, shares of Nike, Inc. US:NKE Apple Inc. US:AAPL and Microsoft Corp. US:MSFT led the Dow higher on Monday.

The Nasdaq Composite rose for the seventh straight time, its longest rally of the year.

What are investors looking for?

It seems some investors are looking closely at companies with strong balance sheets.

The work from home factor is also having an impact with investors eyeing stocks with good prospects in this ‘new normal’ economy.

On the downside, travel stocks continue to be punished, with cruise operators and airlines hit the hardest.

JJ Kinahan, the chief market strategist at TD Ameritrade commented that investors are weighing up who the winners and losers will be during the pandemic, which is no doubt leading to the fluctuations we are currently seeing.

“There’s absolutely a big tug-of-war going on right now,”Kinahan said. “Everyone is trying to figure out who is going to be the winners and losers when things get quote-unquote back to normal. That to me shows that everybody is trying to figure out which way to go.”

24 hours

The Aussie dollar rose 1 percent against the US dollar. It is now back above US0.69 cents, while the greenback fell against several currencies.

Speaking of currencies, the British pence is now sitting at 55.36, while we are also looking at 61.33 Euro cents, 73.81 Japanese yen and NZ$1.065 to start the day.

ASX SPI futures were up +34 points this morning, while the ASX 200 was up +0.03 percent at 5,944 by Monday’s close.

In the US, the Dow Jones gained more than 150 points overnight.

The Dow’s gain was not only on the back of yesterday’s mini tech boom, but also due to investors overlooking a rise in coronavirus cases. It seems a focus on the potential for further government stimulus had more impact than the actual spread of the virus.

Bruce Bittles, chief investment strategist at Robert W. Baird & Co. believes that despite numbers picking up, “It’s not to the extent that we’re looking at a shutdown again.”

Bittles says that some investors are upbeat about better-than-expected US economic data and hopes that Congress will pass another nearly $1 trillion fiscal stimulus package this summer.

“That’s all a big positive for the economy,” he said.

The Nasdaq index, which loves a good tech stock, climbed 1.1 per cent to set a new record closing high at 10,056. The S&P 500 rose +0.6 percent to finish at 3,117.

In Europe, the FTSE 100 was down 0.8 percent at 6,244, the DAX was down 0.5 percent at 12,262 and Euro Stoxx 50 was down 1pc at 3,019.

Looking at commodities, Brent crude was up 2.1 percent at $US43.06/barrel and spot gold was up 0.7 percent at $US1,754.82/ounce.

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