Hi Everyone,
The stock market finished higher following a relatively quiet and bullish session on Wall Street, as U.S. stocks finally enjoyed international tailwinds thanks to the rally in Europe and Asia. The Dow was up 236, or 0.9%, to 26,664, the Nasdaq gained 158, or 1.5%, to 10,903, while the S&P 500 rose by 23, or 0.7%, to 3,295. Advancing issues outnumbered decliners by an almost 7-to-3 ratio on the NYSE, where volume remained light.
Traders said that stocks closed yet another session near their intraday high, hinting at immense buying pressure, especially in the tech sector. As one trader explained, “The historic rally in the top tier of the tech sector continued unabated today, with Microsoft (MSFT, +5.5%) and Apple (AAPL, +2.5%) pulling their weight, and while a lot of sectors remain weak, the bullish stampede on the Nasdaq is still ‘on.'”
The Volatility Index (VIX) had a wild session, as even though the “fear gauge” hit its lowest level since late-February in the morning, but finished the day virtually unchanged. With the Nasdaq hitting a new all-time high and the S&P 500 closing in on its all-time high, the VIX should have declined today, at least according to the usual correlation between the index and stocks. That said, the negative divergence is not necessarily a bearish sign here, as it could mean that the “wall-of-worry” is still in place, and sentiment hasn’t reached dangerously euphoric levels.
The stimulus negotiations in Washington took center stage today, and since the two parties did not make much progress over the weekend concerning the extra unemployment benefits, the talks could shape trading all week. The government jobs report is scheduled for Friday, which makes a deal that much more important from a political standpoint. The COVID crisis, the job market, and the Trump Administration’s response will surely be among the main talking points of the campaign, and while a second $1,200 stimulus check seems like a done deal, unemployment benefits could provide ammunition to both sides in the coming months.
As always, have a great evening and stay tuned!!!
Joe
