Commenting on yesterday’s disappointing Fed minute and today’s trading Gorilla Trades strategist Ken Berman said:
Risk Assets Weighed Down By The Disappointing Fed Minute
The major indices are virtually unchanged at midday despite a clearly bearishovernight session, as bulls staged a strong morning rally on Wall Street. Yesterday’s slightly disappointing Fed minute and the worsening European COVID picture weighed on risk assets before the opening bell, but U.S. stocks continue to hold up very well in the face of the headwinds. Even though the total number of COVID cases topped 5.5 million in the U.S., the number of new cases is still trending lower, and even without a stimulus deal, investors continue to gobble up equities on every short-term dip.
At the 2021 SALT New York conference, which was held earlier this week, one of the panels on the main stage discussed the best macro shifts coming out of the pandemic and investing in value amid distress. The panel featured: Todd Lemkin, the chief investment officer of Canyon Partners; Peter Wallach, the managing director and Read More
In economic news, new jobless claims came in at 1.11 million, much worse than last week’s reading and the consensus estimate of 930,000. On the bright side, continuing claims dropped below 15 million for the first time since the start of the lockdowns, but the job market is still under pressure. The Philly Fed Index missed expectations as well, but the CB Leading Index came in well above-forecast at 1.4% and last month’s reading was also revised higher, confirming the recent string of positive surprises in the U.S.
Dow: 27,678, - 14 or 0.1%
S&P 500: 3,379, + 4 or 0.1%
Nasdaq: 11,218, + 71 or 0.6%
Russell 2000: 1,565, - 7 or 0.4%
Market breadth has been relatively strong this morning, with advancing issues outnumbering decliners by a 3-to-2ratio on the NYSE at midday. Only 20 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 103 stocks hit new 52-week highs.
The major indices have been trading above their daily VWAPs (Volume-Weighted Average Price) for most of the morning session, pointing to intraday buying pressure. Real estate stocks erased yesterday’s losses thanks to the dip in Treasury yields but most of the key sectors are in the red at midday, although tech stocks have been showing relative strength too, while energy-related issues have been the weakest this morning. Stay tuned!