Hi Everyone,
Thanks to today’s slow but persistent upward drift in stocks, all of the main sectors closed the session in the green. However, the weakest sectors, such as materials, real estate stocks, and consumer staples were virtually unchanged. Tech stocks, communication services, and financials had another strong day, with the financial sector hitting a new record high for the third straight day. The fact that the defensive utilities and healthcare sectors performed the best is something to keep an eye on in the coming days, although Johnson & Johnson’s (JNJ, +2.3%) blowout earnings definitely helped healthcare stocks.
Traders said that intraday price action was favorable for the second day in a row, as shorts continue to be squeezed as stocks approach their all-time highs. As one trader explained, “The five-day winning streak in the S&P 500 suggests that bears are starting to feel the heat following the deepest correction in a year, and today’s session proved that there is very little technical resistance ahead to stop the large-cap benchmarks from hitting new record highs.”
Despite the bullish market-wide trends, the most virus-sensitive issues dropped for the second day in a row amid the worrisome reports from a few European countries. While the number of cases continues to drop in the U.S. and globally, Russia and the U.K., among others, have been experiencing a renewed rise in infections for weeks, which accelerated over the past week. Looking at the seasonal trends, this could mean that the positive domestic trends could change in the coming weeks, putting a dent in the ongoing rally.
The first ETF linked to bitcoin’s price started trading on the NYSE today, marking a major milestone for the crypto sector, which offers another option for investors to gain exposure to the sector. The ETF’s launch was successful, as bitcoin nearly hit a new all-time high after rising by over 3%, and the fund traded with high volume. On a cautionary note, BITO is designed to track bitcoin’s futures contracts, not bitcoin’s price itself, and given that the crypto sector is still speculative and volatile, the ETF is also likely to experience wild swings.
“You have enemies? Good. It means you’ve stood up for something, sometime in your life.”
Winston Churchill
As always, have a great evening and stay tuned!!
