D&D Note (10.16.2020) ~ Retail Sales Spark Market Rally To End The Week ~
Markets got a shot in the arm today with surprise Retail sales gaining 1.9% in September topping estimates of 0.7%. Excluding autos, the increase was 1.5% topping 0.4% estimates.
The biggest gainers were clothing and accessories while electronics was the lone negative retail sector.
The surprise economic data helped markets to overlook the rising Covid-19 cases and rally throughout cash trading today until a late day pairing of gains.
Will continued unemployment claims dent future retail sales? That is the big question on the flip side of the boon in retail sales.
The rotation trade continued into cyclicals like materials and industrials and out of tech. The reflation trade continues as well.
Transports were down on the day down over 1%.
The Dollar gained 0.57% on the day.
The latest on Fiscal Stimulus is that it’s not likely before the election. President Trump has said he would go above the current level of $1.8 trillion, but the Democrats are still at $2.2 trillion while the GOP are not willing to go above $1.3 trillion.
The Trump administration refused to provide disaster aid for California wildfires despite the 1.9 million acres burned, more than 3,300 homes and other structures destroyed, and killing three people. The State of California will appeal the decision to deny federal funds.
Wall Street donors are heavily backing Joe Biden helping him to raise $383 million in September. Individuals in the finance industry donating $50 million to Biden while only donating $10 million to Trump.
The new iPhone 12 and 12 Pro will not come with the power plug just the cable. The new power plug is sold separately and will provide a 50% charge in 30 minutes. The old power plugs are no longer compatible with the new iPhone cable.
The Boeing 737 is cleared to fly by European aviation regulator helping boost the stock today and was the biggest point gainer on the DOW.
Trading app Robinhood announced that at least 2,000 accounts got hacked.
Tech is breaking out on a long term chart in ratio to the S&P 500 with the NASDAQ 100 overtaking the ratio highs from 1993.
Crowdstrike price target raised to $175 at Piper Sandler on cloud security growth with an Overweight position.
Caterpillar upgraded to an Overweight position at Wells Fargo on economic optimism with a price target of $220.
Costco upgraded to a Buy rating at Jefferies on revenue growth potential with a price target of $435.
The major indices came off their highs of the day in the final hour of trading as options contracts expired dragging the NASDAQ into the red, the S&P 500 flat on the day, and the VIX flipping from in the red to spiking higher upon the close.
DOW up 0.39%
S&P 500 up 0.01% (3483.81)
NASDAQ down -0.36%
VIX up 1.63% to 27.41
Oil down -0.46% to $40.77 a barrel.
Gold down -0.51% to $1898.90 an ounce.
Remdesivir has ‘little or no effect’ in reducing Covid-19 deaths according to the World Health Organization.
Europe’s ICU beds are nearing capacity in some areas.
There are 39 U.S. states seeing a rise in new coronavirus cases with North Dakota, South Dakota, Montana, Wisconsin, Utah, Nebraska, and Iowa seeing the largest jumps in the 7-day average.
Global Virus cases: 39.09 million+
Global Virus deaths: 1.1 million+
U.S. Virus cases: 8.01 million+
U.S. Virus deaths: 218,137+
~ Dave James / Principal Trader and Market Strategist