Market Update: Fri, Sept 25, 2020 | LPL Financial Research

Daily Insights

Markets pull back. US equities are giving back some ground this morning, and that may mean the first four-week losing streak for the S&P 500 Index since August 2019. Headlines are quiet today. Democrats in the US House of Representatives are working on a stimulus package in the range of $2.2 trillion, but no deal with Republicans is near. European markets are lower during midday trading, while Asian markets finished mixed.

6 months from the March lows and the potential for continued strength. This week marked six months from the March lows for equites. The recent rally ranks as the second-best six-month rally ever, with only the rally off the 2009 lows stronger. We will discuss the other top six-month rallies and subsequent strong performance later today on the LPL Research blog.

Technical update. The S&P 500 was down 2.2% through Thursday’s close this week and is tracking toward more losses in early trading today. The benchmark index remains near support in the 3200 range and sits approximately 3% above its 200-day moving average at 3106. Selling this week has been concentrated in year-to-date laggards such as cyclical value sectors and small cap stocks, a stark contrast from the first half of the month when technology and growth stocks accounted for much of the market’s decline.

COVID-19 news. New daily case growth in the United States rose a modest 1.7% week over week on Thursday to 44,315, while the seven-day average rose 9.6% over the prior week (source: COVID Tracking Project). Hospitalizations rose modestly as well at 2.5% week over week. Novavax has begun phase-three trials in the United Kingdom for its vaccine candidate.



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