Commenting on a no-deal Brexit and today’s trading, Gorilla Trades strategist Ken Berman said:
Q3 2020 hedge fund letters, conferences and more
The major indices are all trading slightly lower at midday following yesterday's broad-based rally to new all-time highs on Wall Street. Reopening stocks showed strength compared to stay-at-home issues in early trading, helping the S&P 500, Dow, and the Russell 2000 to new records, but the benchmarks all faded as the session progressed. Treasury Secretary Mnuchin put forward yet another stimulus package, worth $916 billion after the two parties failed to strike a deal yesterday, and while investors remain upbeat regarding the talks, the time is running to reach an agreement this year.
The Final Push To Avoid A No-Deal Brexit
In economic news, the JOLTS job openings estimate smashed expectations, with a reading of 6.65 million, further easing the fears of another plunge in the job market. Crude oil inventories surged higher by 15.2 million, halting the rally in cyclical issues The overnight indicators leaned bearish with the deflationary Chinese Consumer Price Index (CPI) weighing on risk assets the most. Currency markets are having an active session ahead of tomorrow's European Central Bank (ECB) meeting and the dollar scored a one-week high against the euro amid the final push to avoid a no-deal Brexit.
Market Wrap
Dow: 30,103, - 71 or 0.2%
S&P 500: 3,696, - 6 or 0.2%
Nasdaq: 12,553, - 30 or 0.2%
Russell 2000: 1,926, + 8 or 0.4%
Market breadth has been relatively strong this morning, thanks to the new highs among small-caps, with advancing issues outnumbering decliners by a 3-to-2 ratio on the NYSE at midday. Only 4 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 306 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. While the main sectors continue to diverge on Wall Street and cyclicals performed slightly better than defensive issues this morning, volatility remained low across the board due to the lack of major catalysts. Stay tuned!
