Tech continues to pull the market higher. US stocks opened little changed a day after more new highs for the Nasdaq and tech, while other pockets of the market weakened. Stocks reversed earlier losses in pre-market trading after Gilead reported some good news on its COVID-19 treatment. China finally had a red day, as the Shanghai Composite fell nearly 2%, ending an eight-day win streak. Asia was mostly lower overnight, while Europe is firmly higher on a very quiet news day.
China and tech. Mainland China’s Shanghai Composite had rallied 16.5% during an eight-day win streak before losing steam today. The recent rally has sparked concern over a potential bubble in China, yet the Chinese state media is pushing for more retail participation, while COVID-19 containment and high-frequency data also improve. Tech is on a roll as well, as the Nasdaq 100 has beaten the S&P 500 Index for seven straight days, while gaining an amazing 23.2% already this year. With earnings season around the corner, tech has set a high bar to justify this type of outperformance.
Who didn’t get a PPP loan? It turns out many companies may have taken out PPP loans that likely didn’t need them, raising the ire of Main Street. In our latest Street View video, we share the many positives of what the Paycheck Protection Program has done for small businesses. View it later today in the LPL Research blog.
Coming July 14. LPL Research’s Midyear Outlook 2020: The Trail to Recovery reviews where we’ve been in 2020, where we may be heading, and the path that will take us there. Our special elections section explains how stocks and the economy may predict the next president. Look for the interactive digital version, a streamlined printer-friendly version, and supporting marketing collateral July 14.
No Weekly Market Commentary on July 13. LPL Research will not publish a Weekly Market Commentary next Monday, July 13, so we can focus on Midyear Outlook 2020, which publishes Tuesday, July 14. Weekly Market Commentary will resume July 20. We look forward to sharing Midyear Outlook 2020 with you.
COVID-19 news. New cases in the United States totaled more than 63,000 Thursday, up 16.1% week over week on a 5.4% increase in tests (source: Johns Hopkins). Total hospitalizations increased 891 on Thursday to about 44,000 but remain well below the peak near 59,000 in April. Fatalities have crept higher this week—including record numbers in California, Florida, and Texas. Nationally, the seven-day average is down more than 70% from the April peak and is unlikely to approach those levels again because cases are skewing younger, testing has increased, and treatments are better (source: The COVID-19 Tracking Project).
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