The day after. US market equities opened mixed this morning in the wake of the S&P 500 Index reaching an all- time high since COVID-19’s onset. Improving COVID-19 and housing numbers along with a potential compromise in stimulus talks appear to be influencing investors. Asian markets showed mixed results, while European markets are mostly higher during midday trading.
New highs. The S&P 500 finally made a new high for the first time since February 19. This officially makes the bear market earlier this year the quickest bear market ever (just over a month) and the subsequent recovery of five months one of the fastest ever. The good news is stock returns after new highs can be quite strong, as we will discuss later today on the LPL Research blog.
Housing didn’t get the memo. The economy might still be in a recession, but no one told the housing market. July housing starts came in well above expectations at 1.496 million, while July building permits beat expectations nicely as well (source: US Census Bureau). These results came on the heels of the August National Association of Home Builders (NAHB) Housing Market Index (HMI) hitting its highest level since 1998 on Monday. This is the first recession we can recall that saw little to no impact in the housing market and is yet another clue the recession is likely over.
Technical update. The S&P 500 set a new all-time high Tuesday after eclipsing the 3386 mark to close at 3389, propelled by a surge in consumer discretionary and communication services sectors. We now look for resistance from former highs to turn into support, with 3677 marking the next potential price target based on Fibonacci retracements.
COVID-19 news. New US cases fell 27.2% on Tuesday compared to the prior week, while the seven-day average fell 7.9% over the past week and continues its nearly four–week downtrend (source: COVID Tracking Project). Hospitalizations fell 9.8% week over week based on seven-day averages, breaking the six-day streak with a drop of more than 10%. College campuses are getting a lot of attention as classes begin, including the University of North Carolina and Notre Dame, where cases have increased.
LPL Research in the Media
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
All index and market data are from FactSet and MarketWatch.
This Research material was prepared by LPL Financial, LLC.
Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL affiliate, please note LPL makes no representation with respect to such entity.
- Not Insured by FDIC/NCUA or Any Other Government Agency
- Not Bank/Credit Union Guaranteed
- Not Bank/Credit Union Deposits or Obligations
- May Lose Value
For Public Use – Tracking 1-05046025