Markets higher. US markets opened higher with the S&P 500 Index within striking distance of an all-time high, its first since COVID-19’s emergence. In the midst of Washington gridlock, strained US-China relations, and the pandemic’s challenges, the markets have shown solid resilience. Major Asian markets were mixed while European markets are higher during midday trading.
The pick is in. Democrat presidential candidate Joe Biden picked Senator Kamala Harris to be his vice presidential candidate in a move that was widely expected. Senator Harris is the first Black woman to be nominated for vice president by a major party, while Joe Biden could be the oldest president to win an election. Senator Harris is viewed as making the ticket more market neutral, as Senator Elizabeth Warren, another woman under consideration, was viewed as more negative, especially for financials. Yields jumped and financials did well on the news.
Fastest bear ever. The S&P 500 is inching closer to a new all-time high, which would confirm that the bear market earlier this year was only one month long, making it one of the fastest bear markets ever. Not surprisingly, it would also make it one of the fastest recoveries ever from a bear market. We take a look at these potentially record-breaking events later today on the LPL Research blog.
The win streaks are over. The S&P 500 win streak ended at seven days in a row, just missing out on new highs before a late-day reversal and missing the first eight-day win streak since April 2018. The rotation out of technology continued, as the Technology Select Sectors SPDR Fund (XLK) closed in the red of the third consecutive day for the first time since early March. This ended the longest streak ever without three consecutive down days.
The rotation continued. On Tuesday, previously high-flying sectors like technology and healthcare were quite weak again, while cyclical value areas such as energy, financials, and industrials were strong. With yields moving higher globally, we’ve seen a move to the more cyclically sensitive areas. We continue to like growth over value for the remainder of 2020 and expect this recent change in leadership to revert back to growth soon.
Rough day for precious metals. The mean reversion trade hit gold hard Tuesday, with spot gold down 5.7% for the single worst day since April 2013. Silver performed even worse, down nearly 15% on the session. Meanwhile, December gold futures contracts fell 4.6%, matching its worst drop of the year back in March. Gold has had an incredible run, up nine consecutive weeks, for the longest weekly win streak since 2006. For our thoughts on gold, watch our latest LPL Research Street View video.
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