Stocks Stumble Ahead of Holiday Week

Daily Market Comment

November 20, 2020

Stocks Stumble Ahead of Holiday Week

Stocks were under pressure to close out the week after Secretary-Treasurer Steve Mnuchin said he doesn’t intend to extend the bulk of the Covid-19 loan programs past the end of the year. That should lead Congress to allocate relief funds to struggling workers and businesses. Earnings were mostly better than expected with shares of Williams-Sonoma (WSM) and NetEase (NTES) trading higher on solid reports. Utilities (XLU) eked out a gain but every other sector was red, with Technology (XLK) the weakest group. The major averages drifted lower into the close and finished at the lows of the day. The Dow ended the session with a loss of 219.75 points (-0.75%) at 29263.48, while the S&P 500 slipped 24.33 points (-0.68%) to 3557.54. The NASDAQ lost 49.74 points (-0.42%) and settled at 11854.97.

Breadth was mixed with declining issues beating advancing issues by 243 units on the NYSE, while advancing issues held a 201 unit edge on the NASDAQ. Declining volume was 51% on the NYSE, while 59% of the volume on the NASDAQ was positive. The VIX increased 0.59 (+2.55%) and finished at 23.70. Crude oil prices increased 0.43 (+1.03%) and the December contract closed at $42.17 a barrel. Gold prices added 10.40 (+0.56%) and closed at $1871.90 an ounce.

Investors gravitated towards stay at home stocks today as gloomy headlines on the spreading pandemic stalled the rally. Despite positive vaccine news, the major averages struggled for direction as we look ahead to a short holiday week. With reports of Thanksgiving travels being derailed we may see some weakness in airlines, cruise lines and hotels next week but traders should buy the dips. The stock market remains overbought by nearly any measure and we could see some backing and filling next week.

Earnings releases to watch for on Monday include: Agilent Technologies (A), Ambarella (AMBA), Arrowhead Pharmaceuticals (ARWR), MTS Systems (MTSC) and Urban Outfitters (URBN).

Monday’s Market Moving Economic Calendar: Chicago Fed National Activity Index and PMI Composite Flash.

By David L. Blake, CMT

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Market Recap - 11/20/2020

Index Close Day Change Day % Change YTD % Change
NASDAQ COMPOSITE 11854.97 -49.74 -0.42% 32.12%
DJ UTILITIES 873.29 0.35 0.04% -0.66%
DJ TRANSPORT 12232.1 -118.6 -0.96% 12.2%
DJ INDUSTRIALS 29263.48 -219.7 -0.75% 2.54%
NYSE COMPOSITE 13827 -36.23 -0.26% -0.61%
S & P 100 INDEX 1628.35 -12.16 -0.74% 12.9%
RUSSELL 2000 1785.34 1.21 0.07% 7.85%
S&P 500 3557.54 -24.33 -0.68% 10.11%
CBOE MKT VOLATILITY 23.7 0.59 2.55% 71.98%
AMEX COMPOSITE 2200.79 -7.72 -0.35% -13.78%
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