Hi Everyone,
The stock market drifted higher all day following a negative start to the session, as reopening-related optimism outweighed the impact of the protests triggered by the death of George Floyd. The Dow was up 92, or 0.4%, to 25,475, the Nasdaq gained 62, or 0.7%, to 9,552, while the S&P 500 rose by 11, or 0.4%, to 3,056. Advancing issues outnumbered decliners by an almost 4-to-1 ratio on the NYSE, where volume was lighter than it has been of late.
Traders said that today’s session was remarkably calm on Wall Street, as bulls had plenty of things to cheer. As one trader explained, “Small-caps and cyclical issues led today’s intraday rally, while volatility remained muted, and in light of the chaotic weekend in the U.S., the resilience of the stock market is staggering.”
Energy-, travel-, and tourism-related issues all surged higher today, despite the mixed COVID-headlines, and the relative strength of small-caps also confirmed bullish investor sentiment. While the market-leading tech giants were mixed, the Nasdaq reached another important technical milestone, erasing its late-February “bearish gap open,” which marked the start of the COVID-crash. Now, the road to its all-time high is clear for the tech benchmark, and should the reopening push continue to show success, the other large-cap benchmarks could soon follow suit.
China’s step to halt some of its agricultural imports from the U.S. led to a brief overnight selloff in U.S. equity futures, as it reignited the speculation regarding the fate of the “phase one” trade deal. The U.S. side hasn’t reacted to the reports, which helped the intraday rally in stocks, and it seems that Friday’s press conference by the President might have marked the end of the escalation between the two countries, at least for now. That said, the issue of Hong Kong remains in the spotlight, and the conflict still has the potential to move the market in the coming weeks.
European stocks, which have been very weak compared to their U.S. peers started June in a bullish fashion, as the reopening efforts continue to be successful in the hardest-hit European countries. The European financial sector also had another positive session, which helped U.S. banks as well. The dollar continued last week’s weakening trend in earnest today thanks to the easing pressure on the global financial sector, and that could serve as another bullish catalyst for U.S. stocks and global risk assets.
As always, have a great evening and stay tuned!!!
Joe
