Commenting on the shares of Disney skyrocketing and today’s trading Gorilla Trades strategist Ken Berman said:
[activistivnesting]Q2 2020 hedge fund letters, conferences and more
The major indices are all trading higher at midday despite a mixed bag of economic releases and an uptick in the number of COVID cases. The shares of Disney (DIS, +9.5%) skyrocketed in the wake of the firm’s mixed earnings report, CVS Health (CVS, -0.6%) beat expectations on both its top and bottom lines, but the company’s cautious guidance have been on the whole sector. The ISM non-manufacturing PMI blow away expectations, similarly to Monday’s manufacturing indicator, with its highest reading since March 2019, signaling surprisingly strong growth in the key services sector.
The ADP payrolls number was in focus in pre-market trading, and even though analysts lowered their expectations due to the weak high-frequency job market indicators, the measure still missed by a wide margin. On the bright side, last month’s reading was revised much higher but this month’s 167,000 figure is still worrisome. Meanwhile in Europe, the Spanish and Italian services PMIs remained in positive territory, and even though Eurozone retail sales missed the consensus estimate, European equities and the euro gained ground today.
Market Wrap
Dow: 27,184, + 355 or 1.3%
S&P 500: 3,329, + 22 or 0.7%
Nasdaq: 10,972, + 38 or 0.3%
Russell 2000: 1,536, + 18 or 1.2%
Market breadth has been relatively strong this morning, with advancing issues outnumbering decliners by a 7-to-3 ratio on the NYSE at midday. Only 4 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 225 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. Almost all key sectors are in the green at midday, with materials and energy-related issues leading the charge. The price of crude oil hit its highest level in almost five months this morning, helping cyclical issues, while the most virus-sensitive stocks have also been showing strength and only the real estate and utilities sectors have been struggling considerably due to the uptick in Treasury yields. Stay tuned!
