Commenting on President Trump signing the coronavirus stimulus and funding bills and today’s trading, Gorilla Trades strategist Ken Berman said:
The major indices are all trading notably higher at midday as stocks opened the holiday-shortened week on a bullish note following the Christmas break. After delaying his decision by days the President signed the coronavirus stimulus and funding bills to avoid a government shutdown and further delays to the much-needed fiscal measures. The POTUS also called for a vote on the higher $2,000 stimulus checks, but the Republican Senate majority is still against the larger direct payment, even as it will likely be passed by House this week.
From a technical perspective, today’s rally led to major improvements for the large-cap benchmarks, with the Dow, the Nasdaq, and the S&P 500 all hitting new all-time highs in early trading. While small-caps have been leading the rally this month and the Russell 2000 also hit a new record high, it’s slightly weaker than its large-cap peers, so the stimulus boost behind the Russell’s move could be fading. Global stocks are also trading near their recovery highs, providing tailwinds for U.S. equities as well in the wake of the last-minute Brexit deal and the better COVID numbers, and the accelerating vaccination efforts.
Dow: 30,434, + 235 or 0.8%
S&P 500: 3,734 + 31 or 0.8%
Nasdaq: 12,900, + 96 or 0.8%
Russell 2000: 2,011, + 7 or 0.3%
Market breadth has been in line with the performance of the major indices this morning, with advancing issues outnumbering decliners by a 3-to-1 ratio on the NYSE at midday. Only 5 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 245 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. Apart from energy stocks, the key sectors are all trading in the green at midday, and the divide between cyclicals and tech stocks has been less pronounced this morning which could point to a broader push to new all-time highs. Stay tuned!