Market Update: Fri, Oct 9, 2020 | LPL Financial Research

Daily Insights

Markets move higher. US equity markets opened in the green following Thursday’s positive session. Renewed stimulus talks, with targeted business-aid hopes, are influencing today’s action. Asian markets were mixed, with China’s stock market higher after their holiday, while Japan and Hong Kong ended the trading session lower. European markets are slightly higher in midday trading.

New highs are happening. Although the S&P 500 Index, Dow, and Nasdaq are still off their recent highs, transports made a new high and semiconductors are very close. Additionally, the NYSE Advance/Decline line, Dow Advance/Decline line, mid cap Advance/Decline line, S&P 500 Advance/Decline line, Nasdaq Advance/Decline, Nasdaq 100 Advance/Decline line, and S&P 100 Advance/Decline line all made new highs. We’ve heard that market breadth has been weak, but this would suggest the opposite; this is a rather healthy market with broad participation. 

Columbus Day holiday. Monday, October 12, is Columbus Day and a federal holiday. Stock and bond markets and LPL Financial will be open for business as usual.

Technical update. The S&P 500 pushed its weekly gain to 2.9% Thursday, with the index closing at its highest level since September 3. The rally was broad based, as all 11 sectors moved higher and advancers outnumbered decliners on the New York Stock Exchange (NYSE) by more than 4:1 for the second time this week. The move decisively cleared resistance from mid-September and sets up the index for a potential run toward all-time highs at 3588.

COVID-19 news. New cases in the United States exceeded 50,000 for the second straight day, something we haven’t seen since August 15 (source: COVID Tracking Project). Week over week, cases rose 20%, bringing the increase in the seven-day moving average up to 6.4%. The seven-day average of hospitalizations has dropped 13% compared with the prior week, but the recent bump up in cases could soon lead to more hospitalizations. Pantheon Macroeconomics points out that data irregularities in Missouri’s reporting have artificially depressed hospitalization numbers. The next few weeks are critical.



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