To Bank of America global investment strategist Michael Hartnett, there have been three distinct phases to describe market action over the last eight months.

The first is what he labels the reopening rally, started on Nov. 3 by both the U.S. election and the reports of vaccine effectiveness. That boosted stocks and credit, steepened the yield curve, weakened the U.S. dollar, and led to cyclicals outperforming defensives.

The next phase was the inflation boom, started on Feb. 16 by blowout U.S. retail sales. That led to commodities rising, yields surging, cracks in the technology sector, and value stocks outperforming growth.

The third phase was what he calls “peak growth/policy,” starting on Jun. 16 by the Federal Reserve as well as easing signs from China. That led to a yield curve collapse, bonds outperforming stocks and commodities, the dollar rising, and defensives outperforming cyclicals.

So what to do now? He says own defensive quality in the second half, as it is both a hedge against peak policy, and peak profits. He advises going long defensives in what he calls the vaccinated markets of the U.S. and Europe, and long cyclicals and reopening plays in markets with vaccine upside, in Japan and emerging markets.

Intel tops estimates

Microchip giant Intel

reported better-than-forecast profit and sales, but issued an analyst-matching third-quarter forecast, as Chief Executive Pat Gelsinger said the global semiconductor shortage may stretch into 2023.


reported much stronger than expected earnings and revenue, after adding 7 million new users in three months. Rival social media platform Snap

crushed revenue estimates after adding 13 million users.

Boston Beer

missed on earnings after reporting hard seltzer and beer sales were “softer than we anticipated.”

The virus-delayed, nearly fan-free Tokyo Olympics are opening.

The Wall Street Journal asks, how much will your Oreos cost, in a roundup of corporate views on their ability to test price increases.

There’s a busy slate of U.S. economic reports, including the employment cost index for the second quarter, personal income for June and flash purchasing managers index for the U.S. The flash PMI from the eurozone reached a 21-year high in July, though the U.K. reading fell to a four-month low amid what’s called the “Pingdemic,” referring to a contact tracing app that is forcing workers to stay home.

The market

U.S. stock futures


were pointing to a solid opening, which if sustained would mark the fourth consecutive advance for the major stock market indexes.

The yield on the 10-year Treasury

was 1.30%. Gold

was trading just under $1,800 an ounce.

Random reads

Here is what’s billed as the most-accurate map of Earth.

The world’s first 3D-printed steel bridge has opened.

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