Hi Everyone,
The stock market finished higher for the second day in a row, with the Nasdaq once again pulling its weight thanks to the tech giants. The Dow was up 131 or 0.5%, to 26,156, the Nasdaq gained 75, or 0.7%, to 10,132, while the S&P 500 rose by 13, or 0.4%, to 3,131. Advancing issues outnumbered decliners by a 3-to-2 ratio on the NYSE, where volume remained light.
Traders said that the broad rally was just what the doctor ordered following the choppy consolidation of the past several sessions. As one trader explained, “The major indices pushed higher for the better part of the day, and even though they finished below their intraday highs, bulls still have a firm grip on the market.”
Mega-cap tech stocks continued to spearhead the rally today, with Apple (AAPL), Microsoft (MSFT), Facebook (FB) , Amazon (AMZN), and Netflix (NFLX) all breaking out to new all-time highs. Google parent, Alphabet, remains slightly weaker than its closest peers, as the company’s advertisement revenue stream is still at risk due to the pandemic. Even though the rumors of a looming legislative crackdown continue to surface from time to time, the tech giants are stronger than ever, and it seems that the COVID-19 crisis just made their competitive position even more stable.
White House trade advisor Peter Navarro’s words caused a brief but steep selloff overnight as his comments hinted at the end of the “phase one” trade deal between the U.S. and China. Mr. Navarro and President Trump were quick to deny the speculation, and risk assets promptly recovered their losses, confirming the bullish trend. That said, the deep selloff also suggests that economic uncertainty remains high, and a sudden shock could cause turmoil across asset classes.
Currency markets saw wild swings today, and the dollar was especially active following the release of the weaker-than-expected U.S. PMIs. Since the European measures were much stronger, it’s no surprise that the euro gained ground against the dollar, but the yen and gold also flexed their muscles as the demand for safe-havens remained strong. Treasury yields were mixed, and even though economic uncertainty is still high due to the continued pressure on some of the key emerging markets, there is no sign of an imminent risk-off shift.
As always, have a great evening and stay tuned!!!
Joe
