September 28, 2020
The U.S. equity markets closed last week with solid gains across the board, led by technology once again. The Dow and S&P 500 jumped 358.56 points and 51.87 points, or +1.34% and +1.60%, respectively. The NASDAQ, led by Apple and Tesla, surged 241.26 points, or +2.26%. For the week, the Dow and S&P 500 lost 1.8% and 0.6%, respectively, while the NASDAQ eked out a 1% gain.
As good as Friday was, stocks are coming off a four-week losing streak throughout most of September, their first such losing streak since August 2019. “September has been a rough month, particularly the NASDAQ,” wrote Mike Wilson, chief U.S. equity strategist for Morgan Stanley. “We expect it to bleed into October as visible risk events linger. Looking at the micro picture suggests this is just a correction in a new bull market and the best opportunities remain in reopening beneficiaries.”
COVID continues to keep investors on edge, but it is unclear whether the recent increase in infections in certain areas necessarily equates to a resurgence of the virus. New daily infections exceeded 1,000 in New York state last Saturday, the first time New York has experienced 1,000 or more daily cases since early June.
The arrows are all green this morning, with futures of all three major U.S. equity markets moving solidly to the upside. Within 45 of the opening bell on Wall Street, Dow futures are up 380 points, S&P 500 futures up more than 45 points and NASDAQ looking for another strong opening with futures up more than 200 points. It’s important to note that futures are only indications of how the markets may open and with recently volatility, the last hour of the day seems to experience the most “action.”