Commenting on building permits, housing starts and today’s trading, Gorilla Trades strategis Ken Berman said:
The major indices are mixed and flat at midday following a choppy and slightly bearish morning session on Wall Street. Overnight, global risk assets seemed to be on track to rise for the fourth day in a row, boosted by yesterday’s positive COVID-related headlines, but the reports regarding a record number of new cases over the past 24 hours triggered a selloff in early trading. The tensions between North and South Korea continue to cause headaches for investors as well, and after destroying a joint office building in the demilitarized zone between the two countries, the communist state has been threatening to send troops in the zone.
Building Permits Miss Expectations
In economic news, building permits and housing starts both missed expectations following a string of positive housing-related surprises. Crude oil inventories increased unexpectedly as well, adding to the demand-related worries and weighing on the price of oil and the battered energy sector. We also got several bearish European reports in pre-market trading, and since the new COVID cluster in Beijing continues to grow, the global economy could face strong headwinds in the coming months.
Dow: 26,199, – 91 or 0.4%
S&P 500: 3,123, – 2 or 0.1%
Nasdaq: 9,937, + 41 or 0.4%
Russell 2000: 1,436, – 16 or 1.1%
Market breadth has been weak this morning following two encouraging sessions, with decliners outnumbering advancing issues by a 7-to-3 ratio on the NYSE. Only 2 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 80 stocks hit new 52-week highs. The major indices have been hovering around their daily VWAPs (Volume-Weighted Average Price) throughout the morning session, pointing to a mixed and choppy afternoon. The real estate and energy sectors have been showing weakness due to the weak economic releases, while tech stocks remained very strong in early trading, but compared to volatility of the past week or so, stocks have been very quiet today. Stay tuned!