Stocks are forward-looking assets, so this market should hold up in the coming months no matter economic numbers are not great and The Virus is still hanging around, we have at V-Shaped stock market recovery and a V-Shaped economy is building.
The amount of the liquidity that’s been added by the Fed and Congress to this economy is in place and there is lot’s of it. It will not be withdrawn by the Fed because unemployment is going to remain high. That being the case I believe for the economy and stocks to drive further North in 2021 in a turn towards value. Along that road managing drawdown risk will be Key.
The S&P 500 index hit an all-time intraday high Tuesday and closed at a record high, having returned to all-time highs last week as it fully erased the nearly 34% plunge that began in late February and took the market to its Virus Chaos lows on 23 March. The DJIA dipped to close with a loss of 60.02 pts, or 0.2%, while the NAS Comp marked another record close.
The shutdown in businesses in the US and around the world to thwart The Virus Chaos earlier this year resulted in corporate earnings plunging, but the recovery in US earnings revisions, a measure of analyst upgrades Vs downgrades has been the fastest on record. And while not moving at the same pace of earnings, sentiment has also shifted at the speed of financial light along with risk appetite.
The catalysts for a correction or major pullback are not seen in my work but the technical stretch of some of my Key indicators are a warning. A close watch should be kept on the US 30-year yield and any sign that that US money supply is rolling over. However, I do not see that occurring, but pay attention. The signs of exhaustion in here I am attributing to the Dog Days of Summer, they end after Labor Day.
Plus, while financial markets are not yet completely pricing in the outcome of the November elections, current opinion polls mean that investors appear to be taking President Trump’s remarks to heart. The Bulls believe the President will win a 2nd term.
Promises Made, Promises Kept!
Tuesday, the major US stock market indexes finished at: Dow -60.02 to 28248.44, NAS Comp +86.75 at 11466.47, S&P 500 +12.34 at 3443.62
Volume: Trade on the NYSE came in light at 713-M/shares exchanged
HeffX-LTN’s overall technical outlook for the US major stock market indexes is Very Bullish in here.
- NAS Comp +27.8% YTD
- S&P 500 +6.6% YTD
- DJIA -1.0% YTD
- Russell 2000 -5.8% YTD
Looking Ahead: Investors will receive Durable Goods Orders for July and the weekly MBA Mortgage Applications Index Wednesday.
Have a healthy day, Keep the Faith!