| Wednesday's Headlines 1. US markets end mixed as DJIA falters 2. Nasdaq closes at new record high 3. Pfizer surges on positive vaccine data 4. What is investor sentiment sensing? 5. Tesla takes the throne Markets Closed
 Image courtesy Yellow Dog Productions/Getty Markets Today U.S. markets resumed their recent pattern of tech stocks pushing higher while cyclical stocks were unable to get traction as we kicked off the second half of the year. The DJIA gave up early gains on the back of positive news from Pfizer on a vaccine it is working on with BioNTech. Big tech stocks continued to rise as the Nasdaq made a fresh closing high to start the quarter.
July will bring several tests to our investing resilience. Those begin tomorrow with the June U.S. nonfarm payrolls report, which will provide a clearer picture on hiring trends over the past month. A private payrolls report released earlier today was better than expected, but it is going to take a lot of hiring to work down the 13.3% unemployment rate and boost up the labor participation rate, which is at multi-year lows.
Wrestling down the virus curve is the biggest challenge, obviously, and economies like China and some countries in Europe seem to have done that effectively. Manufacturing and spending surveys are higher on both continents as confidence returns to both consumers and businesses.
That's not the case on these shores, and the month of July will be the proving ground to see if we can get there too. chart courtesy IHS Markit 
Headlines:
 chart courtesy LPL Research Third Quarter Expectations The third quarter is traditionally the weakest quarter of the year given the summer slowdown and the lack of holiday spending events. Like a lot of time-tested axioms in investing right now, this may or may not play out this year. Markets have had an incredible bounce since late March, but they bounced off of a profound bottom. Valuations are stretched as many believe the stock market is way ahead of any economic recovery. It is.
Still, many big investors took money out of stocks in late 2019, and they continued to sell through the March 2020 lows. Money piled up in high-yield savings accounts, corporate and government bonds, and money markets. Assets held in money markets surged to a record high of over $3 trillion in the first quarter, and the average yield on those accounts is between 1–1.5%. It's hard to swallow that when stocks keep rising despite the economic turbulence. Those sidelined investors may decide to remain patient and wait for another dip to get back in, or they may start putting money to work in equities, driving the market higher.  Sentiment Still Bearish Investor sentiment is still very cautious, however. Both individual and institutional investors remain skeptical about future returns. Ironically, that's a bullish signal, according to BofA's Sell Side Indicator. When that indicator tilts lower (towards the green line), stocks tend to bounce shortly after. It's the "be greedy when others are fearful" axiom that Warren Buffett likes to champion.  Tesla Takes the Throne It's been almost exactly ten years since Tesla's IPO on the Nasdaq, and today it became the largest automaker in the world, by market cap. It passed legacy giants like Ford and GM awhile ago, but it is now bigger than Toyota and Volkswagen. Its sales, of course, are nowhere near these industry giants, but investors are betting on the future, and Tesla appears to have the clearest path towards it, according to its believers.
Here's how it stacks up against its competitors on the fundamentals:
 chart courtesy BofAResearch The Olive Garden Indicator I can't resist a good food chart, so this one from BofA Research is right in my ice box. It tracks the wait times at Olive Garden locations around the country. For those of you outside the U.S. who are not familiar with the fine fare at the Olive Garden, think of it as heavily Americanized Italian food, with heaping portions of pasta, cheese, and sweet ragu sauce.
Those who love it really love it, and they are apparently willing to wait quite awhile for a table. Apparently, people in Oregon, Idaho, Colorado, and Utah really love it.
As local economies around the U.S. opened for dine-in service over the past three weeks, wait times for tables soared. That is, up until last weekend, when a surge of new cases re-stirred consumers' anxieties, and wait times fell dramatically. As of this week, several cities, including New York, postponed permitting dining in at local restaurants for the time being, so no need to queue for that corner booth.
We'll just have to wait awhile to get our hands on these beauties: 
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(chart courtesy YCHARTS)  Shares of FedEx are up by over 11.5% after the delivery company reported Q4 earnings that beat analyst expectations. Amgen's stock price rose by over 8% following a U.S. appeals court ruling in favor of the biopharmaceutical company during a patent dispute regarding Enbrel, its immunology drug.  Lincoln National fell the furthest today, with the insurance holding company down by nearly 6%. Oil stocks, such as Diamondback Energy, HollyFrontier, and Occidental Petroleum, are down after Saudi Arabia's threatened to ignite another oil-price war. Word of the Day "Alpha" (the Greek letter α) is a term used in investing to describe a strategy's ability to beat the market, or its "edge." Alpha is thus also often referred to as "excess return" or "abnormal rate of return," which refers to the idea that markets are efficient, and so there is no way to systematically earn returns that exceed the broad market as a whole. Alpha is often used in conjunction with beta (the Greek letter β), which measures the broad market's overall volatility or risk, known as systematic market risk.  image courtesy IRS.gov Today in History July 1, 1862: The Internal Revenue Service was created by an act of Congress to collect income taxes to finance the Civil War. Declared unconstitutional by the U.S. Supreme Court in 1895, federal income tax comes back from the dead after the passage of the 16th amendment in 1913 .
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