S&P 500 Finally Erases COVID Crash

Hi Everyone,

The stock market finished mixed yet again, following another choppy session on Wall Street, with the Nasdaq and the S&P 500 both hitting new all-time closing highs. The Dow was down 67, or 0.2%, to 27,778, the Nasdaq gained 81, or 0.7%, to 11,211, while the S&P 500 rose by 8, or 0.2%, to 3,390. Decliners outnumbered advancing issues by a 2-to-1 ratio on the NYSE, where volume remained light.

Traders said that despite the S&P 500’s new all-time high, the market got weaker under-the-hood, as small-caps suffered a hit. As one trader explained, “The Russell 2000 lagged the broader market today, after showing strength for several weeks, and although the underlying trends remain bullish, investors should monitor the key breadth indicators in the coming days.”

Walmart (WMT, -0.6%) and Home Depot (HD, -1.1%) both blew away expectations on their top and bottom lines, with the almost two-fold increase in Walmart’s online sales really turning heads. That, and the fact that the company didn’t share new information regarding its up-and-coming Walmart+ service, lifted the shares of big rival Amazon (AMZN, +4.1%). Amazon was also boosted by a report that the company is planning to hire 3,500 new workers, as the outlook for e-commerce remains stellar thanks to the permanent shift away from brick-and-mortar shops.

Although Amazon scored a new record closing high, Google parent Alphabet (GOOG, +2.6%) hit a new one-month high, and Tesla (TSLA, +2.8%) also continued its record-breaking rally, the other tech giants failed to impress amid the mixed COVID-related news flow. The energy sector suffered a blow due to the global travel fears, while financials declined for the fourth time in five days, erasing most of last week’s encouraging rally. Industrials also lost ground, and while European stocks started the day with gains, renewed COVID-related worries caused a late-day selloff in overseas assets.

According to the latest rumors, the two parties are getting closer to a stimulus deal, despite the recent downbeat reports. The size of the highly-debated bill could be in the vicinity of $1.5 trillion. While there could be multiple reasons behind today’s drop in the dollar’s value, a larger-than-expected package would likely put more pressure on the currency. With the elections coming up in less than three months, a deal is vital for both sides, so hopefully, we will have a final agreement to support the consumer economy.

I am going to conclude each commentary with a quote of the day.

“We make a living by what we get, we make a life by what we give”

Ronald Reagan

As always, have a great evening and stay tuned!!!

Joe

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