Market Update: Mon, Sept 28, 2020 | LPL Financial Research

Daily Insights

Stocks moving higher. US stocks opened in the green this morning following last Friday’s rally. The S&P 500 Index was down four consecutive weeks for the first time in more than a year. It hasn’t been down five in a row since six in a row in 2011. There is increasing hope of a bipartisan stimulus relief package per House Speaker Nancy Pelosi’s comments Sunday. Asian markets are mostly higher, with the Hang Seng and Nikkei up over 1%. Europe is solidly higher with the German market up over 3%.

Market Signals podcast reviews stock weakness, technology. In this week’s Market Signals: A Market in Motion Stays in Motion podcast and video, LPL Research strategists review the six-month S&P 500 rally, technology pullback, and potential economic impact from COVID-19 and the elections.

What to watch this week. After a tough start to the historically weak month of September, stocks appear to be trying to finish the month on a high note. If not, they’re on course for the first month of losses since March. Potentially crowded short positions built during the recent volatility could propel demand during the final days of the quarter. European equities rallied the most in three weeks, led by banks, as several companies reported business grew during the pandemic. Brexit talks also resumed today, with both sides hoping to agree on a trade deal for the future relationship between the United Kingdom (UK) and the European Union. In the United States, nonfarm payrolls and Institute for Supply Management (ISM) manufacturing releases headline the economic docket.

Technical update. Stocks rallied throughout the Friday session, but a 1.6% gain for the S&P 500 wasn’t enough to break the index’s losing streak, which stretched to four weeks. The Friday bounce occurred after a test of technical support at 3200 on Thursday, and markets are broadly higher again today.

COVID-19 news. New daily case growth in the United States is rising slowly, though geographic trends for case growth remain inconsistent (source: Johns Hopkins). Despite an increase in testing over the past couple of weeks, the positivity rate remains around 5%. The United States has fared better than Western Europe in recent weeks as cases in France, Spain, and the UK continue to accelerate.



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