Commenting on the possibility of $2000 coronavirus stimulus checks being approved and today’s trading, Gorilla Trades strategist Ken Berman said:
The major indices are mixed and flat at midday, despite a positive start to the session on Wall Street following yesterday’s record-breaking rally. The possibility that Congress may approve the increased $2000 coronavirus stimulus checks that President Trump demanded helped risk assets in early trading as roughly a quarter of House Republicans backed the Democratic proposal on yesterday’s vote. The fate of the Senate vote will likely remain in focus throughout the week, as it might have a major impact on the looming election run-offs in Georgia.
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Small-caps have been weighing on the broader market throughout the morning session, despite the new all-time highs in the large-cap benchmarks, which could mean that the Russell 2000 will take a breather following its impressive technical breakout. In economic news, the Case-Shiller Housing Price Index came in well above the consensus estimate, hinting at strong activity in the sector despite the mixed indicators of the past few weeks. The economic calendar will be very busy tomorrow morning, with the Chicago PMI, pending home sales, and the trade balance all coming out, so trading activity might pick up for the last couple of sessions of the year.
Dow: 30,397, - 7 or 0.03%
S&P 500: 3,740 + 5 or 0.1%
Nasdaq: 12,887, - 13 or 0.1%
Russell 2000: 1,963, - 33 or 1.7%
Market breadth has been relatively weak this morning, with decliners outnumbering advancing issues by a 7-to-3 ratio on the NYSE at midday. 8 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 91 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. Consumer-related issues and materials have been showing strength thanks to the stimulus-related hopes this morning, while tech stocks, cyclical issues, and real estate stocks have been lagging behind, which could result in a choppy and slightly bearish afternoon. Stay tuned!