With a strong risk-on attitude, the market extended its early bullish momentum Tuesday with the S&P closing up 1.54% and the Nasdaq up 1.87%. S&P’s rally today closed the second quarter with record gains. In the second quarter, the stock index has had its best quarter in over 20 years with a 20% increase since the beginning of the Coronavirus crisis.  

The market rally on Tuesday came despite health officials in the US are warning that the daily Coronavirus cases can reach 100,000 per day. Traders and investors are sharing the concerns that the current rally reveals the disconnect between the market and the economy. Although the weekly unemployment filing has decreased since March, the US economy remains shaky. Retail sales and production in the US remain depressed due to the pandemic. With new COVID cases surging in over a dozen states, the US economy is facing further headwind in the second half of the year. Yet, despite the challenges the economy still faces, the stock market is almost back to its all-time high before the pandemic started.  

Tech stocks posted strong rally today, with FANG stocks all in the green: Facebook (FB) up 2.91%, Amazon (AMZN) up 2.93%, Netflix (NFLX) up 1.74%, and Google (GOOGL) up 1.49%. Additionally, the electric car maker Tesla (TSLA) had an impressive trading session with the stock closing up 6.98%. While we are expecting the bullish momentum to continue for FANG stocks in the short-term. We are also concerned about the long-term outlook of the economy and how the pressure from the pandemic will continue to reduce corporate profits.

On commodities, gold and crude oil futures are up 0.95% and 0.3% respectively. The bullish risk-on mentality of the market led treasuries to sell off on Tuesday. 30-year treasury bond’s yield widened to 1.411% and the yield of 10-year treasury note reached 0.654%