Hi Everyone,
The stock market ended mixed following a hectic and eventful session on Wall Street, with domestic and global political headlines causing wild swings throughout the day. The Dow was down 361 or 1.4%, to 25,706, the Nasdaq gained 55, or 0.5%, to 10,548, while the S&P 500 fell 18, or 0.6%, to 3,116. Advancing issues outnumbered decliners by a 5-to-4 ratio on the NYSE, where volume remained light.
Traders said that while the Nasdaq had another record-breaking session, even the tech sector showed weakness “under-the-hood.” As one trader explained, “While the Nasdaq closed above 10,500 for the first time, a majority of stocks finished in the red, which is a rare phenomenon and usually signals a short-term pullback.”
The Supreme Court’s decision to grant access to President Trump’s tax returns to the New York Grand Jury sparked a selloff in U.S. stocks this morning as it could lead to a heated period in domestic politics ahead of the final months of the Presidential campaign. The uncertainty regarding the elections is very high due to the pandemic’s economic impact, the debate on the country’s response to the crisis, and the George Floyd protests. That said, according to the largest prediction markets, Democratic candidate Joe Biden is the current favorite, and today’s decision could further increase his chances.
The U.S.-China tensions might also be about to escalate again as the Trump administration is reportedly finalizing a Federal contract ban against the partners of tech giant Huawei and several other Chinese firms. While the two country’s high-level officials all stated that the ”phase one” trade deal is well and alive, industry reports and the harsh diplomatic steps suggest that we might hear a lot more about the conflict in the coming months. Australia also continues to put pressure on China, and the country suspended its extradition treaty with Hong Kong due to the controversial Chinese security law, which triggered global backlash.
Treasury yields plunged lower across the curve today, with long-dated rates falling the most during the morning selloff. Both 10- and 30-year yields hit their lowest levels since late-May, as investors turned to the safe-haven of Treasuries. The price of oil also fell by the most in over two weeks, closing below the crucial $40 per barrel level and weighing on the energy sector. European and Asian stocks finished the day with gains, but since the COVID-related news flow remains negative, tomorrow’s session could see wild swings in both directions again.
As always, have a great evening and stay tuned!!!
Joe
