Commenting on the price of oil hit a new recovery high and today’s trading, Gorilla Trades strategist Ken Berman said:
The Price Of Oil Hit A New Recovery High
The major indices are all trading modestly higher at midday, following a choppy and very active morning session on Wall Street. Small-caps have been leading the way higher once again, with the Russell 2000 hitting a new all-time high, outperforming all of its large-cap peers. The price of oil hit a new recovery high as well amid the rising tensions between the U.S. and Iran, even as several Chinese cities announced lockdowns due to the reappearance of the COVID virus. The European and U.S. numbers also remained worrisome in the past 24 hours, but the domestic vaccine rollout is reportedly gaining speed which helped a bounce in the hardest-hit industries.
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In economic news, the NFIB Small Business Index was below expectations dipping below the 100 level for the first time in five months in December, but the new stimulus package could soon have a positive impact on the sector. The JOLTS job openings estimate was better-than-expected, but the indicator is based on data from November, and the labor market suffered a major hit last month. The IBD/TIPP sentiment number was in line with the consensus estimate, and the data remains consistent with continued growth despite the current soft patch in the economy.
Dow: 31,034, +25 or 0.1%
S&P 500: 3,804 + 4 or 0.1%
Nasdaq: 13,082, + 45 or 0.4%
Russell 2000: 2,117, + 26 or 1.2%
Market breadth has been relatively strong this morning, with advancing issues outnumbering decliners by a 3-to-1 ratio on the NYSE at midday. Only 2 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 331 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 energy sector has been the strongest by a wide margin in early trading thanks to the spike in the price of oil, while financials, industrials, and consumer discretionaries enjoyed stimulus-induced tailwinds, with the key defensive sectors pulling back amid the bounce in risk assets. Stay tuned!