Commenting on 3M and Raytheon’s earnings report and today’s trading so far, Gorilla Trades strategist Ken Berman said:
Q4 2020 hedge fund letters, conferences and more
3M And Raytheon's Earnings Boost The Struggling Industrial Sector
The major indices are mixed and flat at midday despite a bullish start to the session on Wall Street. Stocks turned choppy ahead of tomorrow’s Fed announcements and a slew of crucial tech earnings, with investors digesting the rumors suggesting that a smaller, more targeted stimulus package could be in the works. Johnson & Johnson's (JNJ, +2.9%) upbeat earnings report and promising coronavirus vaccine-related comments gave an early boost to equities, and 3M (MMM, +2.6%) and Raytheon (RTX, +3.2%) also reported bullish number, propping up the struggling industrial sector, but the large-cap benchmarks have been drifting lower in the first hours of trading.
In economic news, the CB consumer confidence number was slightly better-than-expected, with a reading of 89.3, despite the fact that last month’s reading was revised downwards. The Case-Shiller Housing Price Index also provided a bullish surprise, and even though the Richmond Manufacturing Index missed expectations, it remained firmly in positive territory. Microsoft (MSFT, +1.3%) is scheduled to report earnings just after the closing bell, so we could be in for another active after-hours session, with the stock already hitting a new all-time high in early trading.
Market Wrap
Dow: 30,976, + 16 or 0.1%
S&P 500: 3,854 - 1 or 0.03%
Nasdaq: 13,651, + 15 or 0.1%
Russell 2000: 2,156, - 7 or 0.3%
Market breadth has been relatively weak this morning, with decliners outnumbering advancing issues by a 5-to-4 ratio on the NYSE at midday. Only 1 stock hit a new 52-week low on the NYSE and the Nasdaq, while 168 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. Even though Big Tech firms have once again been performing better than the broader market, the main sectors have been performing similarly in the quiet environment, especially compared to the significant divergences of the past week, with only utilities losing considerable ground in early trading. Stay tuned!
