The major indices recovered a little less than half of yesterday’s sharp selloff on Thursday, thanks to a final-hour rally led by the financials.
Banking regulators loosened restrictions in a move to free up billions of dollars in capital for the big banks. The news came shortly before the Fed’s stress test results.
It sparked gains for heavy hitters like Wells Fargo (NYSE:WFC, +4.79%), Bank of America (NYSE:BAC, +3.82%), Citigroup (NYSE:C, +3.68%) and JPMorgan (NYSE:JPM, +3.49%), among others.
The market in general also followed the industry’s lead after spending most of the session chopping around.
The Dow finished higher by 1.18% (or nearly 300 points) to 25,745.60, while the S&P was up 1.1% to 3083.76. The NASDAQ, which saw its eight-session winning streak end yesterday, came back with an advance of 1.09% (or about 108 points) to 10,017.
These performances recovered a good chunk of Wednesday’s losses, which saw each of the major indices slide by more than 2%.
Stocks needed some kind of boost today since it continues to fret over a rise in coronavirus cases in certain parts of the country, such as Florida, Arizona, Texas and California.
Speaking of Texas, the state said it will pause its reopening plans to deal with the increase. That’s exactly the kind of announcement that the market doesn’t want to hear as we attempt to reopen the economy.
Meanwhile, approximately 1.48 million jobless claims were filed last week, which was higher than expectations but continued the downward trajectory. It was the same type of slow improvement as last week’s reading.
The market goes into Friday having gained in four of the past five weeks… and it looked like we were well on our way to more success after rising on Monday and Tuesday.
However, the Wednesday selloff leaves only the NASDAQ higher over the past four days. But the other indices are less than half a percentage point away from getting back on the plus side, so let’s hope for a strong finish.
Today's Portfolio Highlights:
Surprise Trader: Despite restaurants and bars not needing as much (or any) alcoholic beverages during this shutdown, analysts are still feeling pretty good about Constellation Brands (NYSE:STZ). It probably helps that households are buying more beer and spirits as they wait out this pandemic. The company, whose brands include Modelo, Robert Mondavi and SVEDKA Vodka, among others, is scheduled to report before the bell on Wednesday, July 1. STZ has a positive Earnings ESP of 5.96% and beat by more than 27% last time. The stock was added on Wednesday with a 12.5% allocation. Dave also sold the idled Commercial Metals (CMC) for a 5.1% return in a little over two weeks. Read the full write-up for more.
Counterstrike: "There is an interesting disparity between the southern and northern states that is giving investors mixed signals. While NYC and most states in the north open up, the southern states struggle with rising caseloads. While death rates continue to stay low, there is fear that the next couple weeks will bring us death numbers in Houston that we saw in NYC.
"Because of the two different atmospheres, we have two kinds of headlines that come throughout the day. This leads to a violent back and forth algo chop. This action is very similar to the China trade deal headlines from a couple years back.
"The 200-day in the S&P held and we have had a positive reaction higher. Technically this is very bullish and because of all the negative headlines we might be in a situation where aggressive shorts are in trouble. Don’t be surprised to see some upwards momentum if there is any little piece of good news out of the southern states or California." -- Jeremy Mullin
Large-Cap Trader: "The new infections in the USA are in more rural areas of the Southeast and Southwest areas of the USA. This is obviously not good news overall for the U.S. economy. But it remains to be seen if this is really a long-term negative.
"Big rushes of infection in most parts of the world seem to peak after a fresh population gets exposed. That may be the case in the Southeast and Southwest too.
"Having written that, though, it should be no surprise to see sideways trading stock markets like this week Nobody is panicking on the buy side of Wall Street. But nobody, en masse, is buying more in the institutional space either (other than perhaps tech stocks).
"The retail traders will keep on supporting stock market volumes in this environment, regardless. The lack of a share transaction fee does appear to be a game changer, along with a lot of restless boredom, and a lack of sports programming to bet on." -- John Blank
All the Best,
Jim Giaquinto
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