The DJIA rallied 7.7% to start the trading week. Sentiment was boosted by encouraging signs that the COVID-19 outbreak may be improving.
The DJIA (+7.7%) and Russell 2000 (+8.2%) set the pace, followed by the NAS Comp (+7.3%) and S&P 500 (+7.0%).
The positive bias was formed overnight in the futures trade when data out of Europe showed countries reporting fewer coronavirus-related deaths, pointing to the US following a similar path.
A slowdown in the growth rate of new US coronavirus cases is helping put a floor under stocks and dampen volatility, according to a note today from JPMorgan Chase & Co.
The Cboe Volatility Index (VIX) has been tracking data associated with the global spread of cases and has shown a relationship with growth at the US state level.
The VXX is at 41.86 after hours, a buy signal in my quiver.
The number of states with growth rates above 20% dropped to under 10 from over 40 in the past 2 weeks, a trend which could keep pressure on the VIX and moderate any equity declines as it continues.
The JPMorgan analysts expect the 2,100’s level to hold on the S&P 500, serving as a floor for the market this Quarter. They see 2,750 to 2,850 capping the rally over the frame.
Those encouraging signs provided the market some relief that contributed to a broad-based, and steady, rally with the major indexes finishing just off of their highs.
Monday, the major US stock market indexes finished at: DJIA +1627.46 at 22679.99, NAS Comp +540.15 at 7913.23, S&P 500 +175.03 at 2663.68
Volume: Trade on the NYSE came in at 1.4-B/shares exchanged
- NAS Comp -11.8% YTD
- S&P 500 -17.6% YTD
- DJIA -20.5% YTD
- Russell 2000 -31.8% YTD
HeffX-LTN’s overall technical outlook for the major US stock market indexes is Neutral with a Bullish bias,
Looking Ahead: Investors will receive the JOLTS – Job Openings report for February and the Consumer Credit report for February Tuesday.
Have a healthy day, stay home, Keep the Faith!
