Commenting on European stocks hitting new recovery highs and today’s trading, Gorilla Trades strategist Ken Berman said:
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European Stocks Hit New Recovery Highs
The major indices are all trading modestly higher at midday following yet another bullish overnight session across financial markets. Investors shrugged off the gloomy COVID numbers, and focused on the improving long-term economic outlook and the promising stimulus-related developments, pushing the Nasdaq and the S&P 500 to new all-time highs in early trading. European stocks also hit new recovery highs across the board, and in light of the recent positive economic surprises, global tailwinds could further intensify in the coming weeks and months.
In domestic economic news, the weekly number of new jobless claims rose for the second week in a row, getting close to 900,000 and even though continuing claims dropped by 273,000, the job market’s recent deterioration is worrisome for bulls. The Philly Fed Index dropped by more-than-expected too, coming in at 11.1, which still points to growth in the manufacturing sector. The dollar hit its lowest level since early-2018 due to the weak releases and the risk-on sentiment while Treasury yields are mixed amid the continuing stimulus talks.
Market Wrap
Dow: 30,257, + 102 or 0.3%
S&P 500: 3,715 + 14 or 0.4%
Nasdaq: 12,724, + 66 or 0.5%
Russell 2000: 1,964, + 11 or 0.6%
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 9 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 246 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. While all of the key sectors are trading in the green, defensive issues and the tech sector have been performing better than cyclicals in early trading, similarly to yesterday’s session, as the short-term U.S. economic outlook remains uncertain. Stay tuned!
