Hi Everyone,
The stock market finished higher on Friday as investors shrugged off the worst government jobs report in history, and pushed the Nasdaq to a fresh ten-week high. The Dow was up 455, or 1.9%, to 24,331, the Nasdaq gained 142 or 1.6%, to 9,121 while the S&P 500 rose by 49, or 1.7%, to 2,930. Advancing issues outnumbered decliners by a 6-to-1 ratio on the NYSE, where volume remained relatively light.
Traders said that that Friday’s session was a real confidence boost for bulls, and the rally in cyclical issues signals optimism regarding the post-pandemic recovery. As one trader explained, “The uncertainty surrounding the global economy is still very high, but on Friday, equities rallied on horrible news, at least on the surface, again, meaning that bulls still have the upper hand on Wall Street.”
While we saw a scary risk-off shift toward the end of last week, bulls staged an impressive comeback, with the Nasdaq and mega-cap tech stocks, in particular, showing strength yet again. The global reopening efforts gained speed during the week. Since the hardest-hit countries in Asia and Europe managed to avoid major secondary outbreaks, investors remain upbeat regarding the speed of the upcoming recovery. The bond market still made history this week, as it started to predict negative interest rates in the U.S. for the first time ever. The action defies the words of Fed Chair Jerome Powell and several other central bankers, who have been vocal against pushing the Fed’s benchmark rate below zero.
Market internals continue to paint a more bearish picture of the stock market than the large-cap indices due to the persistent relative weakness of small-caps. The Advance/Decline line remains below its recovery high from two weeks ago, even though advancing issues outnumbered decliners by a 3-to-1 ratio on the NYSE, and by a 4-to-1 ratio on the Nasdaq this week. The average number of new 52-week highs rose on both exchanges, edging higher to 20 on the NYSE and 41 on the Nasdaq. The number of new lows also increased, ticking higher to 10 on the NYSE and 14 on the Nasdaq. The percentage of stocks above their 200-day moving average finally crossed 20%. Providing bulls something to cheer about, and the measure finished the week near 22%, its highest level since the crash.
As always, have a great evening and stay tuned!!!
Joe
