Commenting on the earnings of Mastercard and Facebook and today’s trading so far, Gorilla Trades strategist Ken Berman said:
Q4 2020 hedge fund letters, conferences and more
The major indices are all trading higher at midday, recovering some of their steep losses following yesterday's wild session. Heavy trading continued in some of the most-shorted issues like GameStop (GME, -62%) and AMC (AMC, -63%) as several brokerages limited trading in their shares due to the unprecedented volatility of the past few days, but the short squeeze's impact on the broader market has been less pronounced this morning. Apple (AAPL, -2.2% ) and Tesla (TSLA, -3.4%) have been under pressure in the wake of their earnings report this morning, but Mastercard (MA, +3.1%) and Facebook (FB, +1%) joined the rally after publishing bullish quarterly numbers.
In economic news, the first reading of the fourth-quarter GDP print was a tad below expected, with a reading of 4.0%, but the recovery remained on track despite the renewed COVID pressure. New jobless claims came in well below the consensus estimate, helping the rebound stocks, but new home sales missed expectations and the CB Leading Index confirmed the slowing pace of growth. Visa (V, +2.6%) will report earnings after the closing bell, and in light of Mastercard’s promising numbers, the financial sector could get another boost.
Market Wrap
Dow: 30,842, + 538 or 1.8%
S&P 500: 3,813 + 62 or 1.7%
Nasdaq: 13,396, + 126 or 1.7%
Russell 2000: 2,096, - 13 or 0.6%
Market breadth has been relatively weak this morning, with advancing issues outnumbering decliners by only a 2-to-1 ratio on the NYSE at midday. No stocks hit new 52-week lows on the NYSE and the Nasdaq, while 68 stocks hit new 52-week highs. The major indices have been trading above their daily VWAPs (Volume-Weighted Average Price) for most of the morning session, pointing to intraday buying pressure. While all of the main sectors are in the green at midday, with utilities, financials, and industrials leading the charge, we saw notable weakness in energy- and consumer-related issues, so we could be in for another very active afternoon session. Stay tuned!
