The economy is not letting inflation get to it. Consumer spending is ramping up, even in the face of inflated prices, and helping to speed up on the road to recovery. Meanwhile, vaccine company Moderna (NASDAQ:MRNA) is making its way to one of Wall Street’s most robust indices. So what did the stock market do today?
- The S&P 500 closed down 0.76%
- The Dow Jones Industrial Average closed down 0.86%
- The Nasdaq Composite closed down 0.80%
So what else did the stock market do today? Here are some of the top stories.
What Did the Stock Market Do Today? It Welcomed Moderna to the S&P 500.
This month marks a huge milestone for Moderna. The company spent the last year turning itself from obscure biopharma play to coronavirus vaccine superstar, and its stock has grown tremendously in the meantime. MRNA was worth about $26 at the onset of the pandemic; now, it’s worth north of $284. That’s nearly a 1,000% increase in that time.
In its quest to vaccinate the world against the virus, the company is finding itself reaching the S&P 500 index this month. The stock will be added on July 21. Ironically, the stock is making it to the list because of a vaccine competitor; AstraZeneca (NASDAQ:AZN) is acquiring S&P listing Alexion Pharmaceuticals (NASDAQ:ALXN), which will free up the spot for MRNA.
The entrance onto one of the most popularly utilized Wall Street indices is not going without notice. The stock is up over 9% on the news, and trading volume is well over the daily average with 35 million shares traded against the usual 9 million.
Many investors are hesitant to buy in on Moderna. There are fears that MRNA could be a one-hit wonder, falling into obscurity after its Covid-19 vaccine does the job. However, according to Barron’s, that’s not the case at all. Rather, the company is planning on revving up its product line over the next three years. It has plans to develop a flu vaccine in the next two years, in addition to the Covid booster shot it is currently taking on.
Analysts are becoming more bullish on MRNA with news of its S&P entry. Michael Yee, analyst for Jeffries, is calling the stock “the Tesla (NASDAQ:TSLA) of biotech” today, and setting a hefty $325 price point for the newly minted superstar.
Consumer Spending Buoys Economic Recovery
Even in the midst of increasing prices, people love to indulge in retail therapy. That’s quite evident from June’s consumer spending report. The Commerce Department is posting some interesting stats today that are showing a bit of a lifeline through America’s economic recovery effort.
Retail sales are up 0.6% from May to June, according to the department. June sales aren’t just unexpectedly up, they are also far above last year’s June retail sales data. Spending in June 2021 was 18% higher than spending in June of 2020.
This is a welcome insight, considering May saw a decline in retail sales. May’s decline was predicted by analysts to be around 1.3%, but it ended up declining by much more, at about 1.7%. The spending totals come in the midst of some of the greatest inflation numbers of the century; the consumer price index (CPI) hasn’t seen increases as large as last month’s since 2008.
The spending in June reflects Americans’ return to pre-pandemic activities. With employees moving back to the office, clothing sales increased 2.6%. As many itch to get back to bars to meet new people for the first time in over a year, spending rose 2.3%. All the meanwhile, furniture sales dropped by 3.6% and hobby stores and book stores saw a slip of 1.7% on spending.
Increases in consumer demand are timed greatly with America’s ongoing economic recovery effort. Inflation is making things very hard on businesses right now, so seeing that people still want to get out and consume is helping to buoy that recovery where it would otherwise be hampered.
What Else We’re Watching
- A devastating slew of floods are causing huge amounts of destruction in Germany and Belgium. Rescuers are working with urgency to save as many people as possible from the disaster. So far, the countries have seen over 125 deaths as a result of the event.
- Just after contributing to Revolut’s $800 million funding round, SoftBank is investing $75 million into Peter Thiel’s incoming Bullish exchange. The exchange is set to go public via special purpose acquisition company (SPAC) at some point before the end of 2021.
- Things are about to get heated between the U.S. and China. President Joe Biden is now warning U.S. firms against doing business in China and Hong Kong, and the government is preparing sanctions against the country. Secretary of State Anthony Blinken says the actions are to stand up against China’s stifling of Hong Kong democratic independence.
- Tomorrow is game five of the NBA Finals, where the Phoenix Suns and Milwaukee Bucks are tied at two games apiece. I will be rooting on Chris Paul and my hometown guy, Cameron Johnson.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
