President-elect, Joe Biden has made it clear that he will not shut down the country because of the surge in coronavirus. The news is a further confirmation of his previous stance, and this has made traders favour riskier assets today. However, there are some concerns among investors as differences have started to grow between the U.S. Treasury Secretary, Steven Mnuchin and the Fed Chairman, Jerome Powell.
The Asian stock market closed mixed on the final trading of the week. The ASX 200 index closed lower, with a loss of 0.12%. The HSI index advanced 0.21%, while the Nikkei index fell by 0.42%. The Shanghai index rose 0.44%.
Dow Jones and S&P 500: Market Breadth
The Dow Jones’ market breadth recovered some losses yesterday. 83% of the Dow Jones stocks traded above their 200-day moving average. This is a difference of +3% from a day earlier.
The S&P 500 stock breadth remained unchanged. 86% of the shares traded above their 200-day moving average. This is a change of 0% from a day earlier.
Dow Jones Futures Today
The Dow Jones futures are trading lower by 128 points today. In terms of economic data, we do not have much on the economic docket; however, investors will pay attention to FOMC member Kaplan’s speech. Investors would like to know if the Fed members are on the same page in providing further aid for the economy as economic recovery slows down.
The Dow Jones futures have traded mostly towards the high of the last week, and this confirms that traders have tried to push the markets beyond the last week’s high. However, the Dow price has spent most of the week within the last week’s high and low. For the past three days, the Dow futures have failed to close in positive territory. Moreover, on the weekly time frame, the 50-week moving average has come really close to the 100-week SMA, and if it falls below this moving average, we could see weakness for the Dow Jones.
The S&P 500 futures, which represent the wider stock market, are still trading within the last week’s trading range. It seems that the S&P 500 has failed to find its bullish momentum, and traders aren’t certain if they should buy or sell their positions. Of course, all of this comes at a time when coronavirus cases are surging in the U.S., but at the same time, we now also have a coronavirus vaccine. Nonetheless, looking at the weekly chart, it is clear that the bulls are still in control of the price as the price is trading above the 50, 100, and 200-day SMA.
Stock Market Rally
The S&P 500 stock index soared yesterday; the index moved higher by 0.39%. The energy sector led the index higher. Nine out of 11 sectors closed higher.
The Dow index also posted gains yesterday; the Dow stocks moved the index higher by 0.15%. 18 shares rose, 12 shares declined.
The NASDAQ composite, a tech-savvy index, closed with a gain of 0.87%.
S&P 500 Leaders and Laggards: L Brands and Robert Half
L Brands stock contributed the largest gain, advancing 17.7%. Robert Half was the largest drag; it dropped by 4.67%. The S&P 500 stock index is up 11% so far this year.
Dow Jones Leaders and Laggards: Salesforce and UnitedHealth
Salesforce contributed most of the gains for the index; it advanced 2.61%, while UnitedHealth was the largest drag, it declined 2.18%.