Commenting on Trump urging congress to immediately pass separate coronavirus stimulus bills and today’s trading Gorilla Trades strategist Ken Berman said:
The major indices are all trading higher at midday as stock quickly recovered from yesterday’s late-day selloff. After canceling the stimulus talks until after the elections, and triggering a sharp bearish reversal yesterday afternoon, President Trump urged Congress to immediately pass separate stimulus bills covering airlines, paycheck protection, and the second $1,200 stimulus checks. Risk assets and Treasury yields bounced back hard in the wake of the POTUS’s tweets, but it’s unclear how House Democrats will react to Trump's sudden strategy shift on coronavirus Stimulus Bills.
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From a technical perspective, the overnight rally confirmed the bullish short-term trend, as the major indices bounced off their 50-day moving averages again, holding up well above their lows from September. In economic news, crude oil inventories increased unexpectedly this week, putting pressure on the price of oil, which is back below $40 per barrel despite the positive shift in sentiment. The afternoon session will be highlighted by the minutes of the latest Fed meeting, which are due at 2 pm EDT, so volatility might spike higher once again in the last couple hours of trading.
Dow: 28,204, + 432 or 1.6%
S&P 500: 3,404 + 43 or 1.3%
Nasdaq: 11,304, + 150 or 1.3%
Russell 2000: 1,606, + 29 or 1.8%
Market breadth has been relatively strong this morning, with advancing issues outnumbering decliners by an almost 6-to-1 ratio on the NYSE at midday. Only 5 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 101 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. While all of the key sectors are trading in the green, we saw significant divergences between them in early trading, with the most yield-sensitive issues and energy stocks lagging behind the likes of materials, industrials, financials, and consumer discretionary which have been leading the broad-based rally. Stay tuned!