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Investors Mull The Impact Of The Coronavirus Stimulus Package

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Commenting on the impact of the coronavirus stimulus package on the markets and today’s trading, Gorilla Trades strategist Ken Berman said:

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The Impact Of The Coronavirus Stimulus Package On The Market

The major indices are mixed and flat at midday following a choppy morning session on Wall Street as investors mulled the impact of the stimulus package that was passed by Congress yesterday evening. Global financial markets stabilized following Monday's wild session despite the continued uncertainty surrounding the new strain of the coronavirus which left European countries scrambling to limit the risk of an even more serious outbreak. The large-cap benchmarks are still trading very close to their all time highs despite this week’s brief spike in volatility and another positive note, small-caps continue to show relative strength today, hinting at continued buying pressure “under-the-hood”.

In economic news, the final reading of the third-quarter GDP print surprised on the upside, as growth got revised to a record-breaking 33.4%. The CB consumer confidence number missed expectations by a mile, confirming the recent deterioration in the consumer economy, which makes the stimulus package even more crucial. Existing home sales also fell by a tad more-than-expected, but the Richmond Manufacturing Index was well above the consensus estimate, hinting at continued robust growth in the sector.

Market Wrap

Dow: 30,127, - 90 or 0.3%

S&P 500: 3,692 - 3 or 0.1%

Nasdaq: 12,758, + 16 or 0.1%

Russell 2000: 1,992, + 22 or 1.1%

Market breadth has been relatively strong this morning, with decliners only outnumbering advancing issues by a 6-to-5 ratio on the NYSE at midday. 6 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 278 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. Tech stocks have been undoubtedly the strongest this morning, helping the Nasdaq to a marginal new all-time high, but the fact that cyclicals have been lagging behind and the usual safe-haven sectors fared better than the broader market warrants caution for bulls for the rest of the session. Stay tuned!

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