Washington Still Debating On Extra Unemployment Benefits

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Commenting on the debate around the extra unemployment benefits and today’s trading Gorilla Trades strategist Ken Berman said:

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Q2 2020 hedge fund letters, conferences and more

The major indices are all sporting considerable gains at midday following a bullish start to the new month across financial markets. The Nasdaq hit a new record high in early trading, still benefiting from the tech giants' blowout earnings reports from last week, with Apple (AAPL, + 3.2%) surging to a new all-time high again. The S&P 500 also hit an over five-month high amid the global risk-on shift, with the help of Global Payments (GPN, +1.1%), which reported bullish earnings and revenues before the bell, with the encouraging U.S. COVID numbers also been boosting domestic equities and global risk assets.

The Structure Of The Extra Unemployment Benefits Is Still Up For Debate

The stimulus talks in Washington haven’t yielded a deal yet, as although both parties agree on the second round of $1,200 stimulus checks, the structure of the extra unemployment benefits is still up for debate. In economic news, the ISM manufacturing PMI beat the consensus estimate, hitting its highest level in 15 months and confirming the quick recovery in the sector. Even though construction spending missed by a wide margin in July, the Spanish, Italian, and a Chinese regional manufacturing PMIs provided bullish catalysts overnight.

Market Wrap

Dow: 26,684, + 255 or 1.0%

S&P 500: 3,295, + 24 or 0.7%

Nasdaq: 10,890, + 145 or 1.4%

Russell 2000: 1,493, + 13 or 0.9%

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 12 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 178 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. Tech stocks and mega-cap tech issues, in particular, have been mostly behind this morning’s rally, but industrials and financials have also been among the stronger sectors. Real estate stocks and utilities have been struggling while Treasury yields have been pushing higher, and the divergence between the key sectors continues to be apparent. Stay tuned!