Commenting on the ongoing runoff elections in Georgia and today’s trading, Gorilla Trades strategist Ken Berman said:
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The Runoff Elections In Georgia Are At The Center Of Attention
The major indices are mixed and flat at midday following a choppy but active morning session on Wall Street. The ongoing runoff elections in Georgia are at the center of attention, and while expectations shifted slightly towards a Republican Senate majority, which is considered by most analysts to be more favorable for stocks, the race remains very tight. Global risk assets also remain under pressure due to the negative COVID data, with hospitalizations still creeping higher in the U.S. and in several European countries.
In economic news, the ISM manufacturing PMI blew away expectations with a reading of 60.7, its highest since 2018 September. The bullish surprise helped the rebound in cyclicals and on another positive note, small-caps have been showing stability this morning, with the Russell 2000 bouncing off its two-week high from yesterday. The price of crude oil hit an eleven-month high above the key $50 per barrel level in early trading, despite yesterday’s dip, boosting the energy sector, as Russia agreed to boost its output by less-than-expected amid the recovering global demand.
Dow: 30,174, - 50 or 0.2%
S&P 500: 3,703 + 2 or 0.1%
Nasdaq: 12,764, + 66 or 0.5%
Russell 2000: 1,967, - 7 or 0.4%
Market breadth has been relatively strong this morning, with advancing issues outnumbering decliners by a more than 3-to-1 ratio on the NYSE at midday. Only 4 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 93 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. Besides the energy sector, which is up by an eye-popping 4% at midday, consumer discretionaries, real estate stocks, and materials have been the strongest issue in the nervous environment, while the key defensive sectors edged lower. Stay tuned!