Commenting on the tech sector remaining stronger and today’s trading Gorilla Trades strategist Ken Berman said:
Q2 2020 hedge fund letters, conferences and more
Tech Sector Remains Stronger
The major indices are mixed and flat at midday following another choppy and nervous morning session on Wall Street. The new daily records in the number of COVID cases, both globally and in the U.S., have been weighing on risk assets in early trading, as Brazil crossed 2 million infections and Spain also reported its highest number in two months. Despite Netflix’s (NFLX) sharp post-earnings drop, the tech sector has been stronger than in recent days this morning, and on another positive note, small-caps have also been relatively strong, in the face of the negative virus-related news flow.
In economic news, housing starts beat the consensus estimate by a hair, but building permits missed by a wide margin, adding to the confusion regarding the state of the housing market. The Michigan consumer sentiment index was also well-below expected, dropping to 73.2 from last month’s reading of 78.1. The mixed numbers weren’t enough to discourage bulls, and just as yesterday, stocks bounced back off their early lows, proving the resilience of the U.S, market yet again.
Market Wrap
Dow: 26,517, - 50 or 0.2%
S&P 500: 3,220, + 4 or 0.1%
Nasdaq: 10,485, + 11 or 0.1%
Russell 2000: 1,476, + 9 or 0.6%
Market breadth has been relatively strong thanks to small-caps, with the number of advancing issues roughly matching the number of decliners on the NYSE at midday. Only 2 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 76 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 another choppy and mixed afternoon. Utilities have been performing very well for the second day in a row this morning, together with the defensive healthcare sector, but most of the key sectors were little changed, with only materials showing notable strength and energy-related issues lagging the broader market. Stay tuned!
