Pandemic-related deterioration may cause a drop in PMI

global value chains Cardinal Health CAH Pandemic-related deterioration StarMine M&A Arbitrage Spread funding startups during economic distress Leverage In The Financial System angel investors core satellite allocation framework Friday 13th illiquid alternative investments early stage startups subsequent funding rounds New Relic Glenn Greenberg proxy voting advisers INDEXCBOE:VIX weakness among small-caps Form CRS late trading late tradingMegan_Rexazin / Pixabay

In an intra Day note to investors, Gorilla Trades strategist Ken Berman, while commenting on the pandemic-related deterioration, said:

The major indices are all trading lower at midday following another choppy and bearish morning session on Wall Street. The continued exponential growth in the number of U.S. COVID-19 cases and the weak economic data have been weighing on investor sentiment, but stocks are holding up relatively well following yesterday’s bounce. The government jobs report was at the center of attention this morning following yesterday’s record number of new jobless claims, and non-farm payrolls declined by a whopping 701,000 while the unemployment rate jumped to 4.4%, with both measures missing the consensus estimates.

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ISM Non-Manufacturing PMI May Suffer From Pandemic-Related Deterioration

The ISM non-manufacturing PMI was much-better-than-expected, but analysts pointed out that the quick pandemic-related deterioration will likely cause a huge drop in the measure next month. The dollar hit a one-week high as the global dollar-shortage continues to cause problems despite the efforts of the Fed, with the weakness in the European financial system still being the biggest concern. The global economic picture isn’t pretty either, and the Eurozone services PMIs plunged to historic lows, with the Italian number, in particular, reflecting the full lockdown of the country.

Market Wrap

Dow: 21,101, - 313 or 1.5%

S&P 500: 2,492, - 35 or 1.4%

Nasdaq: 7,394, - 93 or 1.3%

Russell 2000: 1,060, - 26, or 2.4%

An Early Market Dip

Market breadth is still far from being convincing, with decliners outnumbering advancing issues by a 3-to-1 ratio on the NYSE. 129 stocks hit new 52-week lows on the NYSE and the Nasdaq, while only 4 stocks hit new 52-week highs. The major indices have been trading below their VWAPs (Volume-Weighted Average Price) for most of the morning session, indicating intraday selling pressure. The key sectors are all in the red in the wake of early dip, and cyclical issues have been clearly lagging the broader market. The traditional safe-havens such as consumer staples, utilities, and healthcare stocks have been showing relative strength, suggesting continued risk-aversion among investors. Stay tuned!

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