The Bear Den by Shortside Jonny
Monday, October 5, 2020 – DIA 281.51, QQQ 280.16 +2.13%, SPY 339.76 +1.77%
Key economic indicators were mixed. The Institute for Supply Management (ISM) New Orders Index (leading indicator) had a big jump to 61.5 vs. the expected 44.7 (below 50 is contraction) but the coincident indicator ISM services Employment Index showed a weak print at 51.8 & well below the 58.1 expectation. ISM prices paid was lower than expected coming in at 59 versus 61.1. The market gapped up on the opening and continued to trade higher by the end of the session as news that POTUS would be leaving the hospital for the White House sparked a late-day rally. Regeneron (REGN) 605.08 +7.13% was a standout as one of its key drugs was featured in POTUS treatment in the hospital. United Rentals (URI) 197.70 +6.85% broke out to new highs, announcing the early retirement of debt as the construction market improves. Albemarle (ABI) 94.76 +6.13% the lithium company continued its rally. Cruise ships Norwegian (NCLH) 16.99 -1.62% and Carnival (CCL) 15.00 -1.32% had to cancel and defer return to business.
Tuesday, October 6, 2020 – DIA 277.72 -1.35%, QQQ 275.16 -1.78%, SPY 334.93 -1.42%
Only one key economic indicator on the day. The trade balance deficit came in higher at 67.1B versus 66.1B expected. Stocks traded in a range until mid-morning when the market started to move higher on the anticipation of a COVID-19 relief bill, but President Trump dashed those hopes tweeting that he was canceling all discussions with the Congress until after the election. Soon after stocks swooned to close at the lows of the day. On the downside Boeing (BA) 181.01 -6.81%, Diamondback (FANG) 29.21 -5.38% and CarMax (KMX) 93.15 -4.86%. Bucking the selling wave, Steris (STE) 181.01 +3.60% on a positive view on an acquisition of Key Surgical, Snap-On Inc. (SNA) 156.05 +2.91%, and CMS Energy (CMS) 62.89% +2.13%.
Wednesday, October 7, 2020 – DIA 282.93 +1.87%, QQQ 279.92 +1.73%, SPY 340.76 +1.76%
No significant data released on the day. The market gapped higher on a softening in the President’s stance on COVID-19 negotiations with Congress. As the day wore on, the market continued to move higher closing near the highs of the day. Workday (WDAY) 227.21 +4.7% bolted on an upgrade by two Wall Street firms. Salesforce (CRM) 259.98 +3.93% broke to a 5-day high, Boeing (BA) 164.61 +3.81% regained a portion of the previous day’s drubbing. Walgreen Boots Alliance (WBA) 36.49 +1.50% is showing some recent strength. On the downside CBOE Global Markets (CBOE) 84.89 -2.25%.
Thursday, October 8, 2020 – DIA 284.29 +.48%, QQQ 281.41 +.53%, 343.78 +.89%
Continuing claims came in better than expected 10.976M vs. 11.4M expected. Initial jobless claims came 20k over expectations at 840K. The market gapped up on the open, as the congressional leadership and the White House re-opened negotiations on a Covid-19 relief bill. American Express (AXP) 106.06 +3.02% reacted positively to that news. IBM 131.49 +5.98% announced a restructuring/spinoff of its services business to focus on cloud computing. The stock traded as high as 135.50 before coming under selling leaving a long bearish tail. Saudi Arabia announced that OPEC would reconsider their previously planned increase in oil production. Reacting to this, Occidental (OXY) 11.18 +8.75% and Halliburton (HAL) 12.81 +7.38%. A standout to the downside was Amgen (AMGN) 240.09 -6.82%, which sold off on drug trial news that was taken as positive.
Friday, October 9. 2020 – DIA 285.83 +.54%, QQQ 285.71 +1.53%, 346.73 +.86%
There was no meaningful data released. The market gapped higher in a continuation of the previous day’s directional move. President Trump indicated he would agree to a higher amount ($ 1.8 trillion) Covid-19 virus economic relief bill. Technology shares led the day on news that Advanced Micro Devices (AMD) 83.10 -3.94% and Xilinx (XLNX) 120.94 +14.11% were in merger discussions. eBay (EBAY) 55.45 +6.47% benefited from an analyst raising a price target. On the downside, IBM 127.79 -2.81% which had spiked on restructuring/spinoff news Thursday, came under selling pressure.
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