Commenting on today’s trading in which tech stocks lead the S&P 500 (.INX) Gorilla Trades strategist Ken Berman said:
Even though stocks sold-off in the last hour of trading, giving back a large chunk of their intraday gains, bulls still had a very encouraging session. Most of the risk-on sectors gained ground thanks to today’s relief rally, and tech stocks were especially strong, which is great news for bulls in the face of the political uncertainty.
Q4 2019 hedge fund letters, conferences and more
Amid the turmoil in the public markets and the staggering macroeconomic environment, it should come as no surprise that the private markets are also struggling. In fact, there are some important links between private equity and the current economic environment. A closer look at PE reveals that the industry often serves as a leading indicator Read More
The major indices all finished higher following an eventful session that saw new all-time highs in the Nasdaq and the S&P 500, despite the overnight missile attacks against U.S. The Dow was up 161, or 0.6%, to 28,745, the Nasdaq gained 61, or 0.7%, to 9,129 while the S&P 500 rose by 16, or 0.5%, to 3,253. Advancing issues outnumbered decliners by an almost 3-to-2 ratio on the NYSE, where volume was slightly below average.
While overnight, we saw a sharp drop in equity futures and a spike higher in Treasuries, gold, and other safe-haven assets, the trends quickly reversed. The limited scope of the Iranian retaliatory strikes together with President Trump’s relatively low-key press conference reassured investors that an open military conflict is unlikely between the two countries. The POTUS announced that the U.S. will impose more “punishing sanctions’” on Iran, but he hasn’t hinted on further military action, and the fact that the Persian state hasn’t targeted the oil infrastructure in Iraq also helped investor sentiment.
Tech stocks lead S&P 500
The much better-than-expected ADP payrolls number and the bullish revision of last month’s dismal reading both contributed to the broad rally in equities. Treasury yields and the dollar also pushed higher in the wake of the report, even as yields hit one-month lows in overnight trading amid the mini-panic. Apart from materials, all of the key sectors showed stability today, with consumer goods and tech stocks leading the way higher. Financials also shined thanks to the rally in Treasury yields, and while the defensive healthcare stocks also ticked higher, utilities edged lower.
The commodity complex had yet another crazy day due to the dramatic shift in global sentiment. The price oil fell more than 10% compared to its overnight high, as the surprise U.S. inventory build and the political de-escalation weighed heavily on the Black Gold. The real precious metal also retreated from its seven-year high, and while gold topped $1600 per ounce in Asian trading, it closed the day in the red, just as the materials sector.
While the U.S. economic calendar won’t be as busy as in the past couple of days, we could still be in for heavy trading ahead of Friday’s government jobs report. FOMC members Clarida and Kashkari will both give speeches and given the confirmed ‘phase one’ trade deal and the recent economic improvements in Europe the U.S. services sector, investors will be closely listening. The weekly number of new jobless claims could also have a bigger-than-usual effect following last week’s encouraging drop in the measure, and the German industrial production will highlight the overnight session. Stay tuned!