Commenting on the positive stimulus-related reports and today’s trading Gorilla Trades strategist Ken Berman said:
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The major indices are all trading considerably higher at midday, with all of the key sectors being in the green. The President's improving condition and the positive stimulus-related reports have been boosting U.S. and global risk assets in early trading, with healthy gains across all asset classes. The rally accelerated thanks to the latest reports from the POTUS’s medical team and he is expected to return to the White House as early as tomorrow. In economic news, the ISM services PMI came in at 57.8 well above the consensus estimate, surpassing last month’s reading as well.
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The pace of the recovery remains encouraging for bulls, and even though the hardest-hit industries remain under pressure, most growth-sensitive stocks are now in advancing short-term trends. The most reliable breadth measures also continue to send bullish signals and after leading the way higher on Friday afternoon, small-caps are once again among the strongest issues suggesting a healthy shift in risk appetite. Treasury yields surged higher overnight thanks to the improving sentiment, and that could support a sustained rally on Wall Street.
Dow: 28,043, + 360 or 1.3%
S&P 500: 3,393 + 45 or 1.3%
Nasdaq: 11,258, + 183 or 1.7%
Russell 2000: 1,571, + 32 or 2.1%
Market breadth has been in line with the performance of the major indices this morning, with advancing issues outnumbering decliners by a 3-to-1 ratio on the NYSE at midday. Only 4 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 132 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. Healthcare stocks, materials, and the tech sector have been seeing the strongest inflows this morning, but the battered energy sector also saw a nice bounce thanks to the surging price of oil and the broad rally is a great sign following weeks of nervous trading. Stay tuned!