Stock Market Recap: Monday, Jan. 25, 2021
Wall Street was mixed with Tech stocks showing continued strength while the small caps and blue chips closed lower — and more in Monday’s stock market recap.
The action comes ahead of a heavy fourth-quarter earnings slate with a number of key updates from Apple Inc. (Nasdaq: AAPL), Tesla Inc. (Nasdaq: TSLA), Microsoft Corp. (Nasdaq: MSFT) and Facebook Inc. (Nasdaq: FB) announcing numbers throughout the week.
Stock Market Recap
The Nasdaq rose 0.7% with the morning and fresh record high reaching 13,728.
The S&P 500 was up 0.4% with the intraday high tapping 3,859.
The Dow dipped 0.1% following the first-half fade to 30,564.
The Russell 2000 declined 0.3% despite trading to an all-time peak of 2,194.
Utilities and Consumer Staples were the strongest sectors after rising 2% and 1%, respectively. Energy and Financials paced sector weakness after giving back 1% and 0.7%.
Stock Market Movers
AMC Entertainment Holdings Inc. (NYSE: AMC) shares skyrocketed 25% and avoided possible bankruptcy after announcing it has successfully raised or signed commitment letters to receive $917 million of new equity and debt capital. The company said the increased liquidity should allow them to make it through the coronavirus-impacted winter.
Stock Market Outlook
The AAII Sentiment Survey revealed bullish sentiment closed at 42.5% last week. Optimism has remained above its historical average of 38% for the 11th straight week.
Neutral sentiment was at 23% and below its historical average of 30.5%.
Bearish sentiment was seen at 34.5%. Pessimism was above its historical average of 31.5% for the second straight week.
Global Economy
From the global stock market recap, European markets closed lower after a survey showed German-business morale fell more than expected in January.
Germany’s DAX 30 sank 1.7% and France’s CAC 40 tanked 1.6%. The Belgium20 dropped 1.5% while the UK’s FTSE 100 and the Stoxx 600 fell 0.8%.
Asian markets settled higher across the board.
Hong Kong’s Hang Seng zoomed 2.4% and South Korea’s Kospi jumped 2.2%. Japan’s Nikkei rose 0.7% and China’s Shanghai added 0.5%. Australia’s S&P/ASX 200 advanced 0.4%.
U.S. Economy
Chicago Federal Reserve National Activity Index edged up 0.21 points to 0.52 in December following the -0.70 point drop to 0.31 in November. This brought the three-month moving average up to 0.61. According to the report, 53 of the 85 indicators made positive contributions on the month, with 32 posting negative contributions.
Dallas Federal Reserve manufacturing PMI fell -3.5 points to 7 in January after sliding -2.4 ticks in December to 10.5. The employment component pulled back to 16.6 following the jump to 20.9 previously. Hours worked rose to 12.6 from 9.5.
Stock Market Sentiment
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) was up for the second straight session with the morning high tagging $153.69. Fresh and lower resistance at $153.50-$154 was recovered. A close above the $154 level would signal a possible near-term bottom with additional retest potential towards $155-$155.50.
Rising support is at $153-$152.50.
Volatility Index
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was also up for the second straight session after soaring to an intraday high of 26.63. Prior and lower resistance from the beginning of the month at 26.50-27 was breached but held.
New support is at 23-22.50 and the 50-day moving average.
Stock Market Analysis
The SPDR S&P 500 ETF (NYSE: SPY) rebounded to close higher for the fourth time in five sessions despite testing an intraday low of $378.46. Mid-month and upper support at $378.50-$378 was tripped but held. A close below the latter would signal additional weakness towards $377.50-$377.
Resistance at $384.50-$385 was recovered with the high reaching $384.77 and last Thursday’s all-time peak at $384.95.
RSI is curling higher with key resistance at 70 holding. A close above this level would suggest additional strength towards 75-80 and levels from early September. Support is at 65-60.
Sector
The SPDR S&P Retail ETF (NYSE: XRT) extended its winning streak to five sessions following the intraday and all-time surge to $82.51. Uncharted territory and lower resistance at $82.50-$83 was cleared but held. A close above the latter would suggest additional strength towards $84.50-$85.
Support is at $75-$74.50 with a close below $72.50 signaling a false breakout.
RSI is in an uptrend with lower and overbought resistance at 80-85 getting cleared and holding. A close above the latter would suggest a run at 90. Support is at 75-70.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.