The Last-Ditch Brexit Talks Drag Global Stocks Down

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Commenting on the last-ditch Brexit talks and today’s trading, Gorilla Trades strategist Ken Berman said:

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Downbeat Reports About The Last-Ditch Brexit Talks

The major indices are all trading lower at midday as stocks turned south again overnight following yesterday’s weak bounce on Wall Street. Global stocks got hit hard due to the downbeat reports about the last-ditch Brexit talks dragging the most-traded U.S. index futures contracts to multi-week lows. While the FDA still hasn't approved Pfizer's (PFE, -1.6%) vaccine candidate for emergency use and the stimulus talks in Washington haven't yielded a deal yet, stocks recovered some of their overnight losses by the end of the morning session.

In economic news, the Producer Price Index (PPI) printed at 0.1% reaching its highest level since January and easing the fears of a sudden economic slowdown. The core PPI slightly missed expectations, weighing on cyclical issues but the much better-than-expected Michigan consumer sentiment number gave an early boost to consumer-related stocks and the broader market. Despite the positive surprises, Treasury yields plunged lower across the yield curve in early trading, meaning that investors are likely starting to “price in” another failed attempt to pass a stimulus deal.

Market Wrap

Dow: 29,921, - 78 or 0.3%

S&P 500: 3,652 - 16 or 1.3%

Nasdaq: 12,314, - 91 or 0.7%

Russell 2000: 1,917, - 6 or 0.3%

Market breadth has been in line with the performance of the major indices this morning, with decliners outnumbering advancing issues by a 3-to-2 ratio on the NYSE at midday. Only 4 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 153 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. Only communication services are in the green at midday, thanks to Disney’s (DIS, + 12.9%) strong showing, with the key defensive sectors also showing relative strength amid the global selloff, and financials and energy-related issues lagging behind the broader market by the most. Stay tuned!