Market Update: Mon, Oct 5, 2020 | LPL Financial Research

Daily Insights

Stocks open solidly higher on President Trump’s improving health. Today the S&P 500 Index will try to start another winning streak coming off its first positive week in the last five. Reports that President Donald Trump may leave the hospital today and related optimism that policymakers soon may find middle ground on a stimulus package are fueling the strong open. Asian markets were broadly higher, led by Hong Kong and Japan; China’s markets were closed for a holiday. European stocks are broadly higher in midday trading.

Week ahead. This week’s economic calendar includes the September Purchasing Managers’ Index (PMI) for Services from Markit and the Institute for Supply Management (ISM) on Monday. Auto sales, the US Bureau of Labor Statistics’ August Job Opening and Labor Turnover Survey, and August’s balance of trade data will come out Tuesday. Federal Reserve minutes from its September 15–16 policy meeting and consumer credit will be announced Wednesday, followed by jobless claims on Thursday, and wholesale inventories on Friday. The vice presidential debate will be Wednesday.

How markets may respond to election uncertainty. In this week’s Weekly Market Commentary: Market Responses to Election Uncertainty, we review how markets may respond to three potential scenarios if the presidential election is delayed or disputed, and in light of President Trump’s COVID-19 diagnosis. Weekly Market Commentary will be available on the Resource Center, Automated Campaign Tool, and Broadridge beginning at 1 p.m. ET today.

Stocks and the election don’t mix. View this latest Street View video later today on the LPL Research blog or the LPL Research YouTube Channel.

Technical update. The S&P 500 broke a four-week losing streak last week, moving higher by 1.5% and closing at 3348. The index remains trapped between key technical levels, with resistance to the upside marked by the 3393–3425 range, and strong support to the downside at 3200. The market’s strong trend since the March low, healthy participation, and positive signals from our intermarket analysis continue to suggest a bullish bias as we head into the fourth quarter, historically the best quarter of the year.

COVID-19 news. New cases in the United States rose on Saturday and Sunday on a week-over-week basis, lifting the seven-day average slightly to 43,291 (source: COVID Tracking Project). Hospitalizations have stabilized, falling both days week over week, but the seven-day average unfortunately is still 7% higher than the prior week. Public schools and nonessential businesses in New York City’s Brooklyn and Queens boroughs will likely close this week pending approval from the state. The United Kingdom reported a significant jump in new cases, blaming it on an Excel spreadsheet error.



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