Commenting on the existing home sales and today’s trading Gorilla Trades strategist Ken Berman said:
The major indices are all trading slightly higher at midday, following another bearish overnight session. U.S. stocks bounced higher in early trading for the second day in a row, in the face of the global selloff in risk assets, thanks to the upbeat economic numbers and the improving COVID picture. On the other hand, European stocks and currencies got hit hard due to the troubling drop in the Eurozone manufacturing and services PMIs, with the latter sector, in particular, showing weakness amid the continued strict travel restrictions.
Warren Buffett’s 2018 Activist Investment
Today’s domestic economic releases were all much better-than expected, with especially existing home sales blowing away the consensus estimate with an annualized reading of 5.86 million units. The Markit manufacturing and services PMIs both hit their highest levels since early 2019, Joe Biden officially become the presidential nominee of the Democratic party yesterday and in his acceptance speech, he hinted on the government limited fiscal limits, adding to the buying pressure on the dollar, which hit an almost two-week high against its most important peers.
Dow: 27,826, + 84 or 0.3%
S&P 500: 3,388, + 3 or 0.1%
Nasdaq: 11,302, + 37 or 0.3%
Russell 2000: 1,551, - 14 or 0.9%
Market breadth has been relatively weak this morning, due to the weakness among small-caps, with decliners outnumbering advancing issues by a 3-to-1 ratio on the NYSE at midday. Only 19 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 45 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. Similarly to yesterday’s session, most of the key sectors have been lagging behind the large-cap benchmarks this morning, with only the tech sector registering meaningful gains, pushing the Nasdaq to yet another record high, despite the narrowing rally. Stay tuned!