Stocks started a historically strong month on a positive note as investors looked ahead to several key events scheduled for the holiday-shortened week. As a reminder, the stock and bond markets will close early Wednesday and stay shuttered Thursday for the Fourth of July holiday.
Even with markets closed this week for a day and a half, there’s a full economic calendar for folks to sift through. Today’s data included the Institute for Supply Management’s Manufacturing Purchasing Managers Index (PMI), which fell to 48.5% in June from May’s 48.7% reading. Readings below 50% indicate contraction and this is the 19th month out of 20 that the index has arrived below 50.
“Manufacturing is a weak spot for the economy in 2024,” says Bill Adams, chief economist for Comerica Bank. “The Fed wants the economy to keep running in low gear near term. They will see ongoing softness in manufacturing as contributing to their goal of less inflation.”
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Tomorrow, market participants will get the latest job openings data and comb through an early morning speech from Federal Reserve Chair Jerome Powell. Most noteworthy, though, is the next jobs report, slated for release ahead of Friday’s open.
M&A Monday was in full swing
Meanwhile, in single-stock news, Boeing (BA, +2.6%) made headlines after the aerospace company announced it’s buying fuselage maker Spirit AeroSystems (SPR, +3.4%) for approximately $4.7 billion in stock, or $37.25 per SPR share.
The combination of the two aerospace firms “is a necessary step for a range of stakeholders to gain confidence in MAX quality and safety improvement,” UBS Global Research analyst Gavin Parsons (Buy) said in a recent note to clients.
Peter McNally, global head of analysts at Third Bridge, doesn’t think it will provide Boeing with a quick fix. “A meaningful part of the challenges at Spirit has been the lack of a skilled workforce – a challenge that Boeing itself has faced for years,” McNally says. While the logic of integrating the supply chain is sound, he adds, “the reality could prove more challenging as Boeing has faced challenges in its own manufacturing and assembly operations.”
BlackRock (BLK, -0.6%) was also in the M&A spotlight after the world’s largest asset manager said it will acquire private markets data provider Preqin for approximately $3.2 billion in cash.
“The combination of Preqin with Aladdin and eFront will allow BLK to integrate private markets investment workflows with proprietary data that touches all aspects of private markets including fundraising, deal sourcing, portfolio monitoring, accounting, and performance,” said Jefferies analyst Daniel Fannon (Buy).
Tesla pops after Nio’s strong deliveries update
However, it was the upside in several mega-cap stocks that really fueled gains in the main indexes. Tesla (TSLA), for one, rose 6.1% – gaining nearly $38 billion in market value along the way – ahead of the electric vehicle maker’s monthly and quarterly deliveries report, due out tomorrow morning.
Earlier today, fellow EV maker Nio (NIO, +6.7%) said June deliveries nearly doubled on a year-over-year basis to 21,209 vehicles. The company also revealed it delivered 57,373 vehicles in the second quarter, up 144% from the year-ago period.
Several of Tesla’s fellow Magnificent 7 stocks also closed higher on the day, including Apple (AAPL, +2.9%), Amazon (AMZN, +2.0%) and Nvidia (NVDA, +0.6%).
As a result, the Nasdaq Composite rose 0.8% to 17,879 and the S&P 500 gained 0.3% to 5,475. The Dow Jones Industrial Average ended up 0.1% at 39,169.
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