Despite the market closing slightly lower this week – the market remains optimistic. For eg, a number of economic headwinds hit the tape. However, the market remains incredibly resilient – focusing on the potential upside for next year.
When 2020 comes to a close in approx 6 weeks… it will likely be another double-digit return year. The stand-out group will be tech – with the Nasdaq up ~30% for the year – outperforming the broader S&P 500 by a solid 20%. The Dow Jones and Russell 2000 are essentially flat for the year..
July 7 this year I issued a post titled “BABA is a Better Buy than AMZN”. At the time, Alibaba (BABA) was trading $236. Over the next 3 months – BABA hit a peak of $312 – good enough for 32% gains. However, most of those gains were erased the past three weeks…
News of effective vaccine’s from Moderna and Pfizer are bolstering hopes of a rapid (2021) economic recovery. As a result, growth stocks (like tech) are being sold and value (recovery names) are being bought.
The near-term (3 month) response from central decision makers on COVID lock-downs will be pivotal to whether global economies maintain recovery momentum into the new year. From mine, business (large and small) clearly wants to get on with things… but will they be allowed?
Markets lost a small bit of ground as participants evaluated the risks of further lock-downs in the US. Daily new US COVID-19 infections hit a new high this week – topping 140,000. Infections are estimated to move higher from here as the US head into winter… as families move indoors over the festive holiday season. Therefore, what does “200,000+” new daily infections mean for the re-opening?
The S&P 500 is up 10.5% year-to-date. The Nasdaq is up over 30%. If we can finish anywhere near today’s close – it will be considered a solid year – despite a 35% bump-in-the-road over March. So here’s today’s exam question: Will the market be higher or lower as we close out the final two months?
Rate are going higher and the long-term lows are in. That’s my thinking.
Why are they going higher? Three reasons come to mind: (1) massive fiscal deficits via further stimulus measures; (2) potential COVID-19 vaccine; and/or (3) an improving economy (as a result of the above) Each of these are possible enablers of higher rates…
The market received some potentially very exciting (and long awaited) news today…
An effective vaccine for COVID-19 could be on the horizon.
Pfizer (PFE) lit up the market with news of its Phase III vaccine trial… where initial studies showed “90% effective” rate.
Yesterday I suggested we’re likely to find resistance in an important zone… and today that’s what happened… price action stalled. Despite the “blue-wave reversal” trade this week – we remain largely range-bound. For eg: stocks are still trading where they were during July and August – albeit at the top of the range
