Commenting on Facebook and Netflix shares trading higher and today’s trading Gorilla Trades strategist Ken Berman said:
Facebook And Netflix Set The Pace
The major indices mixed at midday following another choppy but bullish morning session. The S&P 500 and the Nasdaq hit new all-time highs again, outperforming the Dow, with Facebook (FB, +6.5%) and Netflix (NFLX, +6.9%) setting the pace for the broader market. The rising trend in long-dated Treasury yields continued in early trading, indicating bullish pressures across asset classes. So while investors might take a step back ahead of tomorrow’s key Fed event, the rally could soon continue in earnest, boosted by the improving U.S. COVID numbers.
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In economic news, the durable goods report was much better-than-expected across the board with headline sales surging higher by double-digits and the less volatile core orders also jumping by 3.4%. Crude oil inventories fell by more-than-expected as well, indicating a pick-up in demand, despite the lack of a stimulus deal. While the bullish reports could support the rally in the second half of the week, trading activity is expected to remain low this afternoon, and the weakness among cyclical issues and small-caps will likely continue to weigh on the broader market.
Dow: 28,204, – 45 or 0.2%
S&P 500: 3,456, + 13 or 0.4%
Nasdaq: 11,569, + 102 or 0.9%
Russell 2000: 1,561 – 7 or 0.4%
Market breadth has been relatively weak this morning as small-caps have been lagging the broader market for the second day in a row, with decliners outnumbering advancing issues by a 3-to-2 ratio on the NYSE. Only 6 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 72 stocks hit new 52-week highs. The major indices have been hovering around their daily VWAPs (Volume-Weighted Average Price) throughout the morning session, pointing to a mixed and choppy afternoon. Tech stocks have been much stronger than the rest of the market in early trading, and most of the key sectors are in the red at midday, with utilities, real estate stocks, and energy-related issues suffering the most amid the uptick in yields. Stay tuned!