Market Direction: BEARISH alert
issued 9/10/2020
What is the current stock market direction?
Vote BULLISH (Up) or BEARISH (Down) in the upper right side bar, the current stock market direction weekly closing numbers. Leave a comment.
Now for the news…
The economy
The S&P
500 (+1.5%) and Dow Jones Industrial Average (+1.9%) snapped four-week
losing streaks this week, and the Nasdaq Composite performed comparably
with a 1.5% gain. The real winner, however, was the Russell 2000 with a
4.4% gain.
Ten of the 11 S&P 500 sectors finished in positive
territory. The real estate (+4.9%), financials (+3.3%), utilities
(+3.3%), and consumer discretionary (+2.5%) sectors outperformed. The
energy sector (-2.9%) was the lone holdout, as sentiment was pressured
by an 8% decline in crude prices ($37.05/bbl, -3.17) amid growth/demand
concerns.
Prior to Friday, the market had already established the
week's gains, largely on technically-oriented trading activity in
oversold stocks. Early in the week, cyclical stocks benefited from
M&A activity, better-than-expected economic data (although less
consequential reports), analyst upgrades, and stimulus optimism.
The
mega-caps also participated in the rebound, with the market shaking off
any residential weakness that followed the first presidential debate on
Tuesday. Friday, however, is when the real news flowed in and the
mega-caps sold off to end the week.
Briefly, President Trump
tested positive for COVID-19, September nonfarm payrolls increased by
661,000 (Briefing.com consensus 800,000), and there were indications
that a fiscal relief bill could soon be reached. The latter remains a
show-me story, but value/cyclical stocks did benefit from the
hopeful-sounding reports.
Highlighting other key economic
reports, weekly jobless claims remained elevated at 837,000
(Briefing.com consensus 850,000), personal income declined 2.7% m/m in
August (Briefing.com consensus -2.0%), and the ISM Manufacturing Index
for September decelerated to 55.4% (Briefing.com consensus 56.0%) from
56.0% in August.
U.S. Treasuries finished lower on the longer-end
of the curve. The 2-yr yield was flat at 0.13%, and the 10-yr yield
increased four basis points to 0.70%. The U.S. Dollar Index fell 0.9% to
93.84.
The underperformance of the small-cap and mid-cap stocks, which have a
predominately domestic orientation, stood out as a manifestation of
those concerns.
$tockMarketDirection proprietary model is currently BEARISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies
and follow us at $tockMarketDirection for ALERTS we may issue advising a
change in the current market direction. Stay tuned and follow us. If
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The market direction weekly closing numbers for the indexes this week compared
to the initial BEARISH recommendation closing
numbers:
Stock Market Closing Numbers
|
compared to Recommendation Numbers
|
|
9/10/2020
|
10/2/2020
|
Difference
|
|
|
27,534.60
|
27,682.81
|
|
|
|
10,919.60
|
11,075.02
|
|
|
|
3,339.19
|
3,348.44
|
|
