Call it a hangover from Friday’s late selling and an early struggle to chew through major three-star resistance, coupled with the U.S. Dollar reversing losses.
The S&P 500 index and Nasdaq-100 incurred a swift wave of selling in the final hour Friday. Pick your poison for the reasoning, but in the end, it was simply a de-risking ahead of the weekend as the Covid-19 pandemic rages on.
Today, Pfizer and BioNTech said their Covid-19 vaccine is 95% effective and plan to file for an Emergency Use Authorization. This sets it in line with Moderna’s results and the stocks have acted accordingly.
The S&P 500 index is holding ground in positive territory for the week. This is our key takeaway as we head into the back half and a busy economic calendar.
President Trump promised an October surprise, but the developments came just one week removed from one of the tightest elections in history. We have been calling for a bull-run post-election, no matter who wins and as long as the country avoided a ‘blue wave,’ as it removes uncertainties from the risk-landscape.
Once the dust from the election settles, can Congress come together and achieve new Coronavirus Aid legislation before yearend?
U.S. benchmarks continue their melt higher. Although the election has yet to bring a concrete conclusion, former Vice President Biden is on the cusp of victory, and markets find fewer uncertainties.
The S&P tested unchanged on the year overnight into Friday, and the bulls responded. Price action was choppy intraday but could not break the session low, and this set the table for a surge into the settlement.
Risk-assets are experiencing healthy and expected volatility, given the surrounding circumstances. More than one-third of the S&P companies, representing nearly half of its total market cap, reported earnings this week.
Yesterday, the S&P finished down by another 3.5%, mounting a loss of nearly 5% on the week. Whereas the NQ lost 3.9% yesterday, it has managed to shed only 3.8% on the week.