In an intra-day note to investors, Gorilla Trades strategist Ken Berman, while commenting on the price oil and energy-related stocks, said:
Q1 2020 hedge fund letters, conferences and more
The key U.S. index futures opened lower following the long weekend, as the length of the COVID-induced lockdowns remains uncertain, despite the ‘flattening’ of the global and U.S. curves. The worrisome increase in the number of new cases in China has also been weighing on risk assets, as more and more analysts point out the risk of secondary outbreaks that could hinder the economic recovery. The OPEC and Russia agreed to cut their crude oil output by almost 10 million barrels/day, and even though that fell short of expectations, the price oil and energy-related stocks bounced back following Thursday’s plunge.
Stocks are still way above their lows form March thanks to last week’s historic rally, but the mounting growth-related worries and the disappointing European stimulus agreement could weigh on risk assets this week. The economic calendar has been empty today, but investors have been focusing on last week, the Fed revealed the details of its lending program to boost the economy, raising the amount of available credit and expanding the program's reach, but the short-term outlook for the global economy remains grim.
Market Wrap
- Dow: 23,230, + 489 or 2.1%
- S&P 500: 2,741, + 49 or 1.8%
- Nasdaq: 8,092, + 61 or 0.8%
- Russell 2000: 1,207, + 40, or 3.2%
Market breadth has been weak this morning but there were still plenty of stocks gaining ground thanks to the tech sector’s relative strength, with decliners outnumbering advancing issues by a 4-to-1 ratio on the NYSE. Only 4 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 12 stocks hit new 52-week highs. The major indices have been trading below their VWAPs (Volume-Weighted Average Price) for most of the morning session, warning of intraday selling pressure. Tech stocks are finally showing strength in the face of today’s selloff, but small-caps gave back some of their lofty gains from last week together with the most lockdown-sensitive issues, such as financials, industrials, and utilities. Stay tuned!
