In an intraday note to investors, Gorilla Trades strategist Ken Berman, while discussing core retail sales said:
The major indices and the key sectors are all deep in the red at midday as stocks pulled back following yesterday’s strong rally on Wall Street. The global COVID-curve continues to flatten, even as the number of new U.S. new cases increased today, but the uncertainty regarding the post-pandemic world remains very high/ Bank of America (BAC, ) Citigroup (C, ) and Goldman Sachs (GS, ) reported mixed earnings this morning, but the woes regarding the European financial system made their numbers virtually irrelevant, as the whole sector has been under strong selling pressure in early trading.
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A Small Positive Surprise From Core Retail Sales
The price of oil made headlines again this morning, as the WTI contract dipping below $20 per barrel and hit a new 18-year low due to the mounting demand worries. A lot of energy-related issues are sporting double-digit losses, due to oil’s plunge but stocks who are positively affected by the lockdown, such as Amazon (AMZN, +0.4%) and Netflix (NFLX, +3.2%) continue to shine. In economic news, retail sales, industrial production, the NAHB Housing Market Index and the Empire State Manufacturing Index all missed even the pessimistic expectations, with only core retail sales providing a small positive surprise.
- Dow: 23,283, - 667 or 2.8%
- S&P 500: 2,768, - 78 or 2.75%
- Nasdaq: 8,352, - 166 or 2.0%
- Russell 2000: 1,181, - 56 or 4.5%
Market breadth has been very weak this morning due to the broad and deep selloff, with decliners outnumbering advancing issues by a 20-to-1 ratio on the NYSE. 10 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 8 stocks hit new 52-week highs. The major indices have been stuck below their VWAPs (Volume-Weighted Average Price) throughout the morning session, warning of persistent selling pressure. Cyclical issues remain very weak, and the energy sector has been clearly leading the way lower, while healthcare stocks, tech stocks, and consumer-related issues have been showing relative strength yet again. Stay tuned!