D&D Note (8.27.2020) ~ Markets Unsure What To Do With New FED Policy With A Rally Then Selloff Then Rally Again Today ~
The FED policy announcement this morning by Chairman Powell left investors a bit confused on wether to buy or sell. The new policy is the FED will shift to an “average inflation targeting” rather than the standard 2%. Meaning since we’ve been well under target they will allow the economy to run hot over 2% inflation.
Markets initially rallied on the news, then reversed and sold off, then reversed again to rally.
Hurricane Laura slammed into the coastal border of Texas and Louisiana last night. Initial predictions of the damage are of $25 billion.
Professional sports players from NBA to tennis to soccer protest the shooting of Jacob Blake by sitting out of games (playoff games at that). Jarod Kushner‘s response was they are lucky to be ‘able to take a night off from work.’
TikTok is nearing a deal in coming days around $20-$30 billion, with Walmart now in mix teaming up with Microsoft.
5 states now paying the extra $300 in unemployment benefits with Arizona, Louisiana, Missouri, Tennessee, and Texas.
15 states plus Washington D.C. haven’t yet received federal approval for increased benefits, while South Dakota has said it won’t even apply.
RNC lineup os speakers on last night include President Trump, Ben Carson, Mitch McConnell, Ivanka Trump, and Rudy Giuliani.
Peloton price target raised to $96 at Goldman Sachs on growth expectations with a Buy rating.
Dick’s Sporting Goods downgraded to Market Perform rating at Oppenheimer on valuation with a price target of $56.
The consensus price target on the street for the S&P 500 for 12 months from now is 3647. We are only around 100 points shy of that today showing how far this current market has become over extended prompting many to call for a 7% to 20% correction in coming weeks to months.
Markets came off the highs of the day in the final minutes of trading. The DOW had turned positive on the year briefly before pairing gains at the close.
DOW up 0.57%
S&P 500 up 0.17% (3484.55)
NASDAQ down -0.34%
VIX up 5.16% to 24.47
Oil down -0.88% to $43.01 a barrel.
Gold down -1.23% to $1930.38 an ounce.
Abbott Labs $5 test in 15 minutes gets cleared by FDA and will be able to produce 50 million test kits a month starting in October.
Global Virus cases: 24.29 million+
Global Virus deaths: 828,134+
U.S. Virus cases: 5.85 million+
U.S. Virus deaths: 180,523+
~ Dave James / Principal Trader and Market Strategist