Commenting on the strong inflows of the tech sector giants and today’s trading so far, Gorilla Trades strategist Ken Berman said:
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The major indices are mixed and flat midday following another active but two-faced morning session on Wall Street. The giants of the tech sector have been enjoying strong inflows for the second day in a row, with a few names, such as Apple (AAPL, +3.2%) Amazon (AMZN, +2.5%), and Facebook (FB, +2%) propping up the broader market in the face of the weakness among cyclical issues and small-caps. The new administration's immediate plans and President Biden's focus on the vaccination push, in particular, have been making headlines this morning, but the bullish momentum of the vaccine rally seems to be weakening.
In economic news, the Philly Fed Index blew away the consensus estimate, with a reading of 26.5, getting close to its post-first-wave maximum despite the containment measures. New jobless claims were also slightly lower-than-expected following last week’s worrisome surge, but the 900,000 figure still points to severe short-term pressure on the job market. Housing starts and building permits both beat expectations as well and we also got another batch of bullish earnings reports, but once again, the largest reporting company Union Pacific (UNP, -3.3%) opened lower, post-earnings.
Dow: 31,161, - 27 or 0.1%
S&P 500: 3,853 + 1 or 0.04%
Nasdaq: 13,518, + 60 or 0.4%
Russell 2000: 2,571, -9 or 0.5%
Market breadth has been relatively weak this morning, with decliners outnumbering advancing issues by an almost 7-to-3 ratio on the NYSE at midday. No stocks hit new 52-week lows on the NYSE and the Nasdaq, while 186 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. Nearly all of the main sectors are in the red at midday, with only tech stocks, communication services, and consumer discretionaries sporting gains, so traders are unlikely to get bored this afternoon. Stay tuned!