October 9, 2020

Stock Futures Rise, Stimulus Talks Back On Track

Stock Market Today

The coronavirus stock market rally is hungry for another stimulus package, and almost every day, we are getting mixed news on this. Yesterday, the House Speaker, Nancy Pelosi ruled out the standalone aid package. However, Donald Trump made a U-turn on his earlier stance on stimulus and said that stimulus negotiations are back on track. This has increased volatility in the markets, and it is likely to remain like this for the next few weeks. 

Over in Asia, the stock market surged on better than expected Chinese economic data. The Shanghai index advanced 1.69%. The Koran Kopsi stock index also moved higher by 0.21%, while Hong Kong’s HSI declined 0.14%. The Australian ASX 200 closed flat.

Dow Jones and S&P500: Market Breadth

The Dow Jones’ market breadth flexed its muscles further. 77% of the Dow Jones stocks traded above their 200-day moving average.  

The S&P 500 stock breadth gained more strength. 70% of the shares traded above their 200-day moving average. This is a change of +6% from a day earlier.  

Dow Jones Futures Today

The Dow Jones futures are trading higher by 61 points. The focus is mainly on two factors: the stimulus package and U.S. elections. Trump has said that he has no interest in participating in the second presidential debate in a virtual set up. Trump’s campaign has suggested postponing the second and third presidential debates. However, Joe Biden’s campaign rejected such a proposal. Any delay in the presidential debate will only create unnecessary uncertainty in the markets. 

The Dow Jones futures are on track to record two consecutive weeks of gains. The Dow’s price is trading above the 50, 100, and 200-day SMA on the weekly time frame, and this confirms that the bull trend is strong. It was only three weeks ago when the price touched the 50-week moving average. Ever since, the bulls have been in strong control of the price. The next resistance is at 29000, and the near term support is at 27000.

The S&P 500 is also on track to record two back-to-back weeks of gains. This is the first time that we have seen these sorts of gains in nearly four weeks. The S&P 500 price is trading above the 50, 100, and 200-week SMA on the weekly time frame. The RSI hasn’t reached the overbought zone yet and this means that the uptrend may continue for a while. The next resistance is at 34,500, and the support is at 3,300. 

Stock Market Rally

The S&P 500 stock index is near its five weeks high, and yesterday, the index advanced 0.72%. The energy sector led the index higher, and all 11 sectors closed higher. 

The Dow index retreated from its highs yesterday; however, the Dow stocks moved the index higher by 0.43%. 6 shares of the Dow fell, and 24 shares closed higher. 

The NASDAQ composite, a tech-savvy index, dropped 0.42% yesterday. 

S&P 500 Leaders and Laggards: DXC and Amgen

DXC stock contributed the biggest gain, soaring 8.68%. Amgen stock was the largest drag; it fell by 7.04%. The S&P 500 stock index is up 2.68% this week.

Dow Jones Leaders and Laggards: IBM and Amgen

IBM stock advance higher by 5.89%, and was the biggest mover for the Dow, while Amgen stock dropped 7.09%, the biggest drag for Dow Jones Industrial Average index.