Commenting the rumors of a Brexit agreement and on today’s trading, Gorilla Trades strategist Ken Berman said:
Q3 2020 hedge fund letters, conferences and more
The Rumors Of A Brexit Agreement
The major indices are all trading slightly higher following the first hour of trading, with tech stocks leading the way higher on Wall Street. Choppy holiday reading continued for the third day in a row in U.S. stocks but global markets have been unusually active due to politics. The European Union (EU) and the U.K. struck a historic trade deal this morning with the rumors of a Brexit agreement already triggering a strong Santa Claus rally in European assets and the Great British pound, in particular.
The British currency got close to its multi-year highs against the dollar, as the fears of a no-deal Brexit subsided, while the main European benchmarks got close to their recent recovery highs. On the domestic front, Republicans stopped the Democrats’ push to raise the amount of the second coronavirus stimulus checks to $2,000, despite the President’s demand, but investors largely ignored the process. As a reminder, the market will close at 1 pm EST today, and trading activity will likely remain very light throughout the session as traders prepare for Christmas Eve.
Market Wrap
Dow: 30,175, + 45 or 0.2%
S&P 500: 3,699 + 9 or 0.3%
Nasdaq: 12,820, + 48 or 0.4%
Russell 2000: 2,009, + 2 or 0.1%
Market breadth has been in line with the performance of the major indices this morning, with advancing issues outnumbering decliners by a 6-to-5 ratio on the NYSE at midday. Only 2 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 96 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. Even in today’s choppy environment, the key sectors have been diverging significantly, with cyclical issues and consumer-related stocks lagging behind the market-leading tech and healthcare sectors, hinting at a slight risk-off shift. Stay tuned!
