By Gorilla Trades. Originally published at ValueWalk.
Commenting on today’s trading Gorilla Trades strategist Ken Berman said:
Q2 2020 hedge fund letters, conferences and more
Moderna’s Very Encouraging Coronavirus Vaccine Trial Results
The major indices are all sporting gains at midday thanks to a strong overnight rally in risk assets. Moderna Inc (NASDAQ:MRNA)’s very encouraging vaccine trial results triggered the large move in the most lockdown-sensitive industries, as the vast majority of participants produced “robust immune response” according to the firm. The Dow and the S&P 500 both hit new five-week highs this morning, outperforming the Nasdaq yet again thanks to the returning virus-related optimism, despite the new one-day record in the number of U.S. infections.
The much better-than-expected Empire State Manufacturing Index also boosted investor sentiment in early trading as the indicator registered its highest reading in over year at 17. Industrial production bounced back hard in June as well, increasing by the most in over 75 years, while crude oil inventories also plunged despite the resurgence of the virus. Goldman Sachs (GS), U.S. Bancorp (USB), and United Health (UNH) all reported bullish earnings before the bell, and the share of the two banking companies pushed higher at the open, boosting the whole sector following yesterday’s weak session.
Market Wrap
Dow: 26,896, + 254 or 1.0%
S&P 500: 3,225, + 27 or 0.9%
Nasdaq: 10,527, + 38 or 0.4%
Russell 2000: 1,473, + 45 or 3.1%
Market breadth has been relatively strong thanks to the monster rally among small-caps, with advancing issues only outnumbering decliners by an almost 9-to-1 ratio on the NYSE at midday. Only 2 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 89 stocks hit new 52-week highs. The major indices have been hovering around their daily VWAPs (Volume-Weighted Average Price) throughout the morning session, pointing to a mixed and choppy afternoon. The key sectors mostly continued yesterday’s trends this morning, with cyclical issues performing well together with the defensive healthcare and utilities sectors. Financial also joined the rally thanks to Goldman’s blowout numbers, while the tech stars of the past months continue to lag behind the broader market. Stay tuned!
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