September 23, 2020
The U.S. equity markets rebounded yesterday, led by a 5.7% increase in Amazon after the stock was upgraded by Bernstein to “outperform.” On the day, The Dow and S&P gained 140.48 and 34.51 points, or +0.52% and +1.05%, respectively. The NASDAQ jumped 184.84 points, or +1.71%.
Despite a likely delay in a new round in fiscal stimulus by Congress and an increase in the number of new coronavirus cases, technology once again led the rally. Other tech names, such as Microsoft, Apple, Alphabet and Facebook, all rose more than 1.6%. Seven of the 11 major sectors of the S&P 500 closed higher, led also by consumer discretionary stocks.
“The market is looking for some stability. Once again investors and traders are going to look to names that had gotten unduly beaten up,” said Kenny Polcari, chief market strategist at SlateStone Wealth, LLC.
Investors may need to brace for an extended period of volatility on concerns over growing political uncertainty in Washington that have intensified since the death last week of Supreme Court Justice Ruth Bader Ginsburg. “We have some fears about a number of different things that hurt the near-term growth outlook,” said Jim Paulson, chief investment strategist at The Leuthold Group in Minneapolis. However, “these are short-term fears that will go away because I think there’s quite a bit of undertow to the upside,” he continued.
In the pre-market today, Dow and S&P 500 futures are indicating a strong opening of trading, while the NASDAQ is showing slightly to the downside. After a volatile couple of weeks, the stock markets in France, the UK and Germany are posting strong gains today. Gold, considered by many to be a “fear asset,” continues its slide to below 1,900 in the minutes before trading begins on Wall Street.