Commenting on the the standalone stimulus bills and today’s trading Gorilla Trades strategist Ken Berman said:
Q2 2020 hedge fund letters, conferences and more
The major indices are all trading in the green at midday, as yesterday’s broad-based rally continued in early trading on Wall Street. The mostly positive stimulus-related developments continued to support U.S. stocks this morning, despite the uptick in the number of domestic and global COVID cases. Small-caps have been leading the way higher yet again, with the Russell 2000 hitting another recovery high, and getting very close to its pre-pandemic levels. The large-cap benchmarks also hit new multi-week highs, and price action continues to be encouraging for bulls.
Uncertainty Regarding The Standalone Stimulus Bills
That said, with the fate of the standalone stimulus bills still being highly uncertain, we could still be in for volatile swings in the coming weeks, so it’s no surprise that the Volatility Index (VIX) remains well above its usual bull market range. In economic news, the weekly number of new jobless claims was slightly above the consensus estimate, holding up stubbornly above 800,000. On the bright side, continuing claims came in at 11 million, dropping by over one million in a week, which is in line with the recent positive surprises, even as a lot of industries remain under pressure.
Market Wrap
Dow: 28,309, + 6 or 0.01%
S&P 500: 3,433 + 14 or 0.4%
Nasdaq: 11,396, + 31 or 0.3%
Russell 2000: 1,627, + 16 or 1.0%
Market breadth has been very strong this morning, with advancing issues outnumbering decliners by a 4-to-1 ratio on the NYSE at midday. Only 3 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 187 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 key sectors are all sporting days at midday, with real estate stocks, financials, and the energy sector showing relative strength, and even though consumer-related issues are slightly weaker in the wake of the mixed jobless claims report, the rally in cyclicals seems to be on track. Stay tuned!
