Stocks Close Week on a High Note

Daily Market Comment

September 25, 2020

Stocks Close Week on a High Note

Equities closed out a volatile week on a high note today as a broad based rally pushed every sector except Energy (XLE) into the plus column. Technology (XLK) led the gains surging +2.40% followed by strength in Healthcare (XLV), Consumer Discretionary (XLY) and Industrials (XLI). Cruise lines also outperformed after an upgrade from Barclay’s saying the ‘worst was over’. Carnival Cruise Lines (CCL), Royal Caribbean Lines (RCL) and Norwegian Cruise Lines all surged on the day. Economic data was lighter than expected with August Durable Goods Orders coming in +0.6% vs. +1.2% estimated. The major averages stepped higher in the afternoon and closed near the highs of the day, but finished just below their respective 50-day moving average. The DJIA bounced 358.52 points (+1.34%) to 27173.96, while the S&P 500 added 51.87 points (+1.60%) and settled at 3298.46. The NASDAQ jumped 241.30 points (+2.26%) finishing at 10913.56.

Breadth was positive with advancing issues beating declining issues 2.5:1 on the NYSE and almost 3:1 on the NASDAQ. Advancing volume was 61% on the NYSE and 81% of the NASDAQ. The VIX dropped 2.13 (-7.47%) finishing at 26.38. Crude oil prices eased 0.27 (-0.67%) and the November contract closed at $40.04 a barrel. Gold lost 12.60 (-0.67%) and closed at $1864.30 an ounce.

Stocks came off early lows and closed near the highs of the day as we headed into the weekend. There was a lack of hard news to trigger the rally and it may have been on hopes that we’ll see progress on a stimulus package soon. In addition, the market went into the day oversold by several measures with the S&P Short Range Oscillator (SRO) at -4.13%. That has historically marked a short term bottom and buyers moved in and picked up some beaten down equities. With the VIX moving steadily lower today, look for the major averages to make a run at resistance next week at their respective 50-day moving average.

Earnings releases to watch for on Monday include: Cal Maine Foods (CALM), Palatin Technologies (PTN), Sina Corp. (SINA), Thor Industries (THO), United Natural Foods (UNFI) and Weibo Corp. (WB).

Monday’s Market Moving Economic Calendar: Dallas Fed Mfg Survey.

By David L. Blake, CMT

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Market Recap - 09/25/2020

Index Close Day Change Day % Change YTD % Change
NASDAQ COMPOSITE 10913.56 241.29 2.26% 21.63%
DJ UTILITIES 808.13 12.2 1.53% -8.08%
DJ TRANSPORT 11270 152.52 1.37% 3.38%
DJ INDUSTRIALS 27173.96 358.52 1.34% -4.78%
NYSE COMPOSITE 12485.38 119.83 0.97% -10.26%
S & P 100 INDEX 1529 24.5 1.63% 6.02%
RUSSELL 2000 1474.91 23.09 1.59% -10.9%
S&P 500 3298.46 51.87 1.6% 2.09%
CBOE MKT VOLATILITY 26.38 -2.13 -7.47% 91.43%
AMEX COMPOSITE 1931.01 0.3 0.02% -24.35%
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