U.S. Industrial Production Misses The Consensus Estimate

Commenting on the Chinese and U.S. industrial production and today’s trading Gorilla Trades strategist Ken Berman said:

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Q2 2020 hedge fund letters, conferences and more

The major indices are all trading higher for the second day in a row, following another bullish overnight session. The large-cap benchmarks are edging ever closer to their strong short-term resistance levels thanks, and on a positive note small-caps continue to show encouraging technical strength, with the Russell 2000 already hitting a new over one-week high this morning. The uptick in global COVID deaths continues to weigh on risk assets, but the U.S. numbers remain in encouraging declining trends, which could add to the relative strength of domestic assets.

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U.S. Industrial Production Missed Estimates

Today’s key economic releases leaned bullish again, both domestically and from a global perspective, boosting investor sentiment in early trading. Chinese industrial production and retail sales, the British employment report, the German ZEW sentiment number, and the Empire State Manufacturing Index all beat expectations as the global recovery seems to be speeding up. U.S. industrial production slightly missed the consensus estimate, which put some pressure on the industrials, but Treasury yields have been edging higher, suggesting that the outlook for domestic growth remains stable.

Market Wrap

Dow: 28,125, + 132 or 0.5%

S&P 500: 3,397, + 33 or 0.9%

Nasdaq: 11,219, + 162 or 1.5%

Russell 2000: 1,549, + 12 or 0.8%

Market breadth has been in line with the performance of the major indices this morning, with advancing issues outnumbering decliners by a 3-to-2 ratio on the NYSE at midday. Only 8 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 93 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. While tech stocks and the real-estate sector continue to show strength, most cyclical issues remain weak, with especially financials lagging behind the broader market despite the uptick in Treasury yields. Stay tuned!