Midday Market Update: Stock Gains Hold Strong, Lead By Oil

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Stocks maintained their gains Monday by midday, as OPEC agreed to a continuation of oil production cuts. 

All three major U.S. indices held on to decent gains by 12:30 E.T., with the S&P 500 up 0.4%. The 10-Year Treasury yield fell to 0.88% from 0.91%, after having sat at around 0.7% for weeks. Yields fall when prices rise. Economic and inflation bullishness and a speedy recovery underway are the biggest drivers of that move, but low rates have been one of the most important underpinnings to the apparent economic and market rebound, making the move down in the yield Monday unsurprising.  

OPEC agreed to extend its oil production cut this weekend, extending the cut agreement for one month at 9.6 million barrels per day. In May, production was cut by 9.7 million barrels per day. Crude oil prices did fall 3.5% to $38 a barrel. Oil has had an enormous run for months. But oil stocks did lead the day, with the Energy Select Sector SPDS etf  (XLE) - Get Report palmist 3%. Exxon Mobil  (XOM) - Get Report and Chevron  (CVX) - Get Report rose 1.8% and 1.1%, respectively. 

Cyclical value continues to lead the market Monday, as that class of stocks has now outperformed the broader market’s run-up since the March 23 bear market low. Consumer discretionary and bank stocks both rose, even as the yield curve was incrementally flatter Monday, a slight negative for bank profitability. 

In other good economic news, New York State initiated its phase one reopening Monday. 

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