Commenting on the likelyhood of a legal battle dealying the official results and today’s trading, Gorilla Trades strategist Ken Berman said:
Q3 2020 hedge fund letters, conferences and more
A Legal Battle Will Delay Official Results
The major indices are all trading slightly lower following a bearish overnight session and a volatile start to the day on Wall Street. The strongest post-election rally on record paused amid the surge in the number of new COVID cases in the U.S. and Europe, with the tensions surrounding the race for the presidency also weighing on sentiment. Even though Joe Biden is inching closer to the White House as several states continue to count votes, it could be several days or even weeks until we will have official results due to the likely legal battle.
Despite today’s weaker showing, the major indices are holding on to their lofty weekly gains, well above their key 50-day moving average, and the benchmarks are on track for their strongest week in almost six months. In economic news, non-farm payrolls came in at 638,000, slightly above the consensus estimate, but the unemployment rate provided a huge positive surprise, dropping unexpectedly below 7%. Hourly earnings increased by less-than-expected, but the report could still give a boost to consumer-related issues ahead of the holiday season.
Market Wrap
Dow: 28,342, - 48 or 0.2%
S&P 500: 3,506 - 4 or 0.1%
Nasdaq: 11,872, - 48 or 0.4%
Russell 2000: 1,656, - 4 or 0.2%
Market breadth has been relatively strong this morning, with advancing issues outnumbering decliners by a 6-to-5 ratio on the NYSE at midday. Only 13 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 127 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. The key sectors have been diverging substantially in the wake of the overnight risk-of shift with defensive stocks in the consumer staples, utilities, and healthcare sectors performing better than the broader market, but the late-morning bounce among cyclical issues could be hinting at an afternoon rally. Stay tuned!
