In an intraday note to investors, Gorilla Trades strategist Ken Berman, while commenting on the low mortgage rates and the post-COVID recovery, said:
The major indices are mixed at midday, with the key sectors diverging substantially for the fourth day in a row. While the global COVID-situation continues to improve, economic numbers remain very weak, and the uncertainty is still very high with regards to the most-affected industries. Amazon and Netflix hit new all-time highs again today, as e-commerce related issued shined in early trading, but cyclical have been relatively weak, weighing on the Dow, with especially the financial sector lagging the broader market.
Housing Market In The Post-COVID Recovery
In economic news, the weekly number of new jobless claims was above 5 million for the fourth time in a row, putting the four-week total of claims above22 million. The Philly Fed Index also missed the consensus estimate, with a reading of -56.6, marking the indicator’s all-time low. On a positive note, building permits beat the consensus estimate, and while housing starts missed expectations, the housing market could be strong in the post-COVID recovery thanks to the record low mortgage rates. Stay tuned!
- Dow: 23,406, – 75 or 0.3%
- S&P 500: 2,795 + 12 or 0.4%
- Nasdaq: 8,520, + 128 or 1.5%
- Russell 2000: 1,170, – 13 or 1.1%
Market breadth has been weak this morning as small-caps continue to lag, with decliners outnumbering advancing issues by a 3-to-1 ratio on the NYSE. 44 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 43 stocks hit new 52-week highs. The major indices have been trading near their VWAPs (Volume-Weighted Average Price) throughout the morning session, pointing to a choppy and mixed afternoon. Cyclical issues remain weak, due to another round of weak economic releases, but so far, the tech sector’s strength was enough to prop up the market, but the afternoon session could turn out to be a hectic one. Stay tuned!
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