Commenting on Joe Biden’s election victory and today’s trading, Gorilla Trades strategist Ken Berman said:
Congress Confirms Joe Biden's Election Victory
The major indices are all trading significantly higher at midday following a bullish and very active morning session on Wall Street. Congress confirmed Joe Biden’s election victory despite the violent and deadly riots in Washington, and global markets stabilized following yesterday’s chaotic session overnight. The Dow, the Nasdaq, and the S&P 500 already hit new all-time highs this morning, with the tech benchmark quickly erasing its recent pullback, as the fears of a regulatory crackdown by the new administration eased.
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In economic news, new jobless claims were slightly lower than the consensus estimate, but Challenger job cuts surged higher in December amid the resurgence of the virus. The ISM service PMI blew away analyst expectations, similarly to Monday’s manufacturing measure, making a double-dip recession highly unlikely even without additional stimulus measures. Both Eurozone retail sales and the Consumer Price Index (CPI) missed expectations overnight, adding to the downward pressure on the euro, and fueling the bounce in the dollar’s market.
Dow: 31,132, + 302 or 1.0%
S&P 500: 3,806 + 57 or 1.5%
Nasdaq: 12,940, + 299 or 2.3%
Russell 2000: 2,091, + 33 or 1.6%
Market breadth has been in line with the performance of the major indices this morning, with advancing issues outnumbering decliners by a 7-to-3 ratio on the NYSE at midday. Only 2 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 474 stocks hit new 52-week highs. The major indices have been trading above their daily VWAPs (Volume-Weighted Average Price) for most of the morning session, pointing to intraday buying pressure. The key cyclical sectors took a breather following yesterday’s surge, with only financials showing relative strength thanks to the rising Treasury yields, but tech stocks staged an impressive comeback with the weakness among defensive issues confirming the risk rally. Stay tuned!