Market Update: Tues, Sept 29, 2020 | LPL Financial Research

Daily Insights

S&P 500 Index opens near flat after gains in four out of the last five sessions. US stocks saw broad gains Monday with a cyclical tilt as value stocks, led by energy and financials, kept pace with growth; small caps outgained large. Asian markets were mixed overnight and European shares are showing modest losses at midday. Market participants take stock ahead of the first presidential debate.

Stimulus talks advance but cautious tone prevails. House Speaker Nancy Pelosi and US Treasury Secretary Steven Mnuchin will discuss a $2.2 trillion COVID-19 relief bill proposal today. House Democrats rolled out the stimulus plan Monday, but it may be a non-starter for Republicans.

How stocks perform after the first debate. The first of three presidential debates is tonight. We will summarize our major takeaways tomorrow, but today we take a look at how stocks have performed immediately after previous first debates, starting with the first one in 1960. Is there any clue who might win the election? Find out later today in the LPL Research blog.

Credit markets and equity volatility. Not all equity market pullbacks are the same, and we can often find clues about the true nature of a pullback by taking a look at the reaction in credit markets. We examine the reaction of credit spreads to pullbacks in the S&P 500 over the last 20 years in today’s LPL Research blog.

What technology’s correction means. Both the Nasdaq 100 and S&P 500 technology sector have suffered more than 12% corrections so far in September. In this week’s Weekly Market Commentary, What Technology’s Correction Means, we explore the fundamentals and technicals of the market’s largest sector and why we expect technology leadership to continue. Weekly Market Commentary is available on the Resource Center, Automated Campaign Tool, and Broadridge.

Technical update. Monday the S&P 500 gained 1.6% for the second trading day, putting the index 4.5% above its low point from last week. Monday’s advance was broad, with breadth on the NYSE the strongest since June 5 and gains present in all 11 sectors. We continue to view the 3200 range as strong support and will be watching to see if the index can overcome its next resistance level at 3425.

COVID-19 news. New case growth in the United States has leveled off this week, but the seven-day average is up 5.2% week over week, reflecting increases late last week (source: COVID Tracking Project). Hospitalizations have remained stable—the seven-day average rose just 2% week over week. Globally, cases tragically surpassed the once incomprehensible one million mark.



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