Commenting on the possibility that President Trump would veto the long-awaited coronavirus stimulus bill and today’s trading, Gorilla Trades strategist Ken Berman said:
The major indices are mixed and flat at midday yet again following another choppy morning session on Wall Street, in line with the seasonal trends. Global risk assets bounced back hard overnight despite the brief scare of the possibility that President Trump would veto the long-awaited coronavirus stimulus bill. The President called the package unsuitable and argued for a larger, $2000 direct payment, but he will still likely sign the bill. The relatively strong Russell 2000 crossed the historic 2,000 level for the first time ever thanks to the continued stimulus-related flows, and that’s a positive sign for the broader market for the coming illiquid holiday period.
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European assets and the Great British pound, in particular, have been leading today’s global advance, as the latest reports suggest progress at the last-ditch Brexit talks. In economic news, durable goods orders came in well above the consensus estimate, and while core orders missed slightly both of last month’s readings were revised upwards, supporting this morning’s rally among cyclical issues. The weak personal income and personal spending, on the other hand, have been weighing on consumer-related issues, but that wasn’t enough to erase the overnight gains of the Dow and the S&P 500.
Dow: 30,205, + 190 or 0.6%
S&P 500: 3,703 + 16 or 0.4%
Nasdaq: 12,807, - 1 or 0.01%
Russell 2000: 2,009, + 19 or 1.0%
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 286 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. Compared to yesterday, the tables have turned at the level of main sectors this morning as energy-related issues have been performing the best, together with financials, industrials, utilities, materials, while tech stocks and the Nasdaq have been lagging behind amid the bullish shift in investor sentiment. Stay tuned!