October 21, 2020

Risk On Trade Is Back, Netflix Misses On New Subscribers

Risk On Trade Is Back, Netflix Misses On  New Subscribers

Stock Market Today

Investors believe that a stimulus deal will be done between Democrats and Republicans before the U.S. election takes place. Some of these hopes have merit because the headline number gap between Democrats and Republicans has narrowed. This means both Nancy Pelosi and Steven Mnuchin can hammer out a second stimulus deal.

The Asian stock market closed higher as airline stocks regained some strength. The HSI index increased by 1.09%. The Korean Kospi index also moved higher by 0.52%, while the Nikkei index advanced 0.31%. The Shanghai index fell by 0.09%.

Dow Jones and S&P 500: Market Breadth

The Dow Jones’ market breadth continued to lose momentum. 63% of the Dow Jones stocks traded above their 200-day moving average. This is a change of -4% from a day earlier.  

The S&P 500 stock breadth gained some strength yesterday. 69% of the shares traded above their 200-day moving average. This is a change of +2% from a day earlier.  

Dow Jones Futures Today

The Dow Jones futures are trading higher by 81 points today. Traders will be looking at the Crude Oil Inventory data, which is due later today. The forecast is for 0.5M against the previous reading of -3.8M. 

The Dow Jones futures are trading above the 50-day SMA on the daily time frame. The hope is that the price remains above the 50-day SMA because if it moves below this average, it is likely that bulls may lose some control of the price. But overall, the upward trend is still very much intact as the price is above the 100 and 200-day SMA.

The S&P 500 index, which represents the wider stock market, has been making lower highs since October 12th. However, the price is trading above the 50, 100 and 200-day SMA on the daily time frame. The immediate support is at 3416, while the resistance is at 3550.

Stock Market Rally

The S&P 500 stock index closed in positive territory yesterday, the index advanced by 0.47%. The energy sector led the index higher, 10 and out of 11 sectors closed higher. 

The Dow index also moved higher yesterday; the Dow stocks moved the index higher by 0.40%. 6 shares of the Dow fell, and 24 closed higher. 

The NASDAQ composite, a tech-savvy index, moved higher by 0.33% yesterday. 

S&P 500 Leaders and Laggards: General Motors and IBM

General Motors stock contributed the biggest gain, soaring 6.75%. IBM stock was the largest drag; it fell by 6.49%. The S&P 500 stock index is up 6.1% so far this year.

Dow Jones Leaders and Laggards: Travelers and IBM

Travelers stock advanced higher by 5.61% and was the biggest mover for the Dow, while IBM stock declined 6.49%, the biggest drag for Dow Jones Industrial Average index.