Commenting on AstraZeneca’s Covid vaccine results and today’s trading, Gorilla Trades strategist Ken Berman said:
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The major indices are mixed and flat at midday despite a positive start to the session on Wall Street. The Nasdaq’s relative weakness has been weighing on the broader market in early trading, following yet another promising vaccine-related announcement, this time from AstraZeneca (AZN, -3.2%). While the shares of AstraZeneca declined due to the relatively weak results of the firm’s Covid vaccine candidate, the hardest-hit sectors and small-caps were helped by the development while stay-at-home stocks have been struggling this morning.
In economic news, the Markit manufacturing and services PMIs were at the center of attention, and both measures handily beat expectations, despite the fears of the impact of the coronavirus. The forward-looking indicators both point to healthy domestic growth and the U.S. economy remains very strong in an international comparison. The Eurozone services PMIs, on the other hand, were well below expected, with the exception o the German measure, and while the manufacturing sector remains on a positive trajectory, the risk of a double-dip recession in Europe is increasing.
Market Wrap
Dow: 29,408, + 145 or 0.5%
S&P 500: 3,557 - 1 or 0.03%
Nasdaq: 11823, - 31 or 0.3%
Russell 2000: 1,811, + 25 or 1.4%
Market breadth has been relatively strong this morning, with advancing issues outnumbering decliners by a more than 3-to-1 ratio on the NYSE at midday. 24 stocks hit new 52-week lows on the NYSE and the Nasdaq, while179 stocks hit new 52-week highs. The major indices have been trading below their daily VWAPs (Volume-Weighted Average Price) for most of the morning session, pointing to intraday selling pressure. The performance of the key sectors has been in line with the trends of the “vaccine rally” of the past few weeks, with cyclical issues and energy-stocks, in particular, showing relative strength while tech stocks and communication have been lagging behind together with the traditionally defensive sectors. Stay tuned!
