Stock Market Recap: Thursday, Jan. 14, 2021
Wall Street was choppy before settling modestly lower ahead of President-elect Joe Biden’s announcement of his economic stimulus plan that is expected to be around $2 trillion — and more in Thursday’s stock market recap.
The major indexes tagged fresh record highs, excluding the S&P 500, before selling pressure in the final hour.
Federal Reserve Chair Jerome Powell gave the stock market a midday lift after saying it is not close to time to raise interest rates. He stressed that analysts are a long way from maximum employment, and the goal is to get back to a strong job market quickly enough to avoid long-term scarring.
Stock Market Recap
The Russell 2000 bucked the trend after surging 2.1% while tapping a late-day record peak of 2,164.
The Nasdaq slipped 0.1% after tagging a morning all-time high of 13,220.
The Dow dipped 0.2% with the intraday lifetime high reaching 31,223.
The S&P 500 fell 0.4% following the morning run to 3,823.
Energy was the strongest sector after soaring 3%. Technology and Consumer Discretionary paced sector weakness after giving back 0.9% and 0.6%, respectively
Stock Market Movers
Shares of Poshmark Inc. (Nasdaq: POSH) skyrocketed 141% in its initial public offering after the company priced 6.6 million shares at $42. The deal priced above the $35-$39 range with Morgan Stanley, Goldman Sachs and Barclays acting as joint book-running managers for the offering.
Stock Market Outlook
The financial sector will be in focus on Friday’s open as Citigroup Inc. (Nasdaq: C), JPMorgan Chase & Co. (Nasdaq: JPM), PNC Financial Services Group Inc. (NYSE: PNC), and Wells Fargo & Co. (NYSE: WFC) will announce quarterly results.
Excluding Citigroup, the aforementioned stocks traded to fresh 52-week highs and will likely set the tone for Friday’s action, along with Biden’s update.
Global Economy
The global stock market recap shows European markets settling higher across the board.
The UK’s FTSE 100 jumped 0.8% and the Stoxx 600 gained 0.7%. The Belgium20 and Germany’s DAX 30 were up 0.4% while France’s CAC 40 advanced 0.3%.
Asian markets settled mostly higher following better-than-expected economic news.
Hong Kong’s Hang Seng and Japan’s Nikkei jumped 0.9%. Australia’s S&P/ASX 200 climbed 0.4% and South Korea’s Kospi edged up 0.1%. China’s Shanghai fell 0.9%.
Japan’s core machinery orders were up for the second straight month after rising 1.5%.
China’s trade surplus hit its highest ever monthly level in December, as exports grew 18.1% last month, while imports rose by 6.5%, to push the trade surplus to a record $78 billion.
U.S. Economy
Initial Jobless Claims surged 181,000 to 965,000, above forecasts for a print of 790,000, after rising 2,000 to 784,000 previously. This left the four-week moving average at 834,250 versus 816,000 previously. Continuing claims zoomed 199,000 to 5,271,000 after dropping -126,000 to 5,072,000 in the prior week.
Import prices rose 0.9% and export prices climbed 1.1% in December, following November gains of 0.2% and 0.7%, respectively. For import prices, petroleum prices surged 9.1% after bouncing 2.9% in November. Excluding petroleum, prices rose 0.4% from unchanged previously, and are at a 1.8% year-over-year rate. For exports, agricultural prices were up 0.6% following November’s 3.5% gain, and increased 1.3% ex-ag versus the prior 0.3% gain.
Stock Market Sentiment
Boston Fed President Eric Rosengren repeated his recent optimism for this year and a robust recovery in the second half thanks to fiscal and monetary stimulus as vaccine distribution becomes more widespread. However, he doesn’t expect inflation to hit the 2% target on a sustained basis over this time frame and added rates should remain accommodative. Rosengren also added quantitative easing purchases should also continue for some time.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) was down for the eighth time in nine sessions following the intraday pullback to $150.79. Current and upper support at $151-$150.50 was breached but held. A close below the latter would suggest weakness towards $149-$148.50 and levels from mid-March.
Resistance is at $152-$152.50 with a close above $154 signaling a possible near-term bottom.
Volatility Index
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) settled higher despite tapping a first-half low of 21.66. Near-term and upper support at 22-21.50 was breached but held.
Lower resistance at 23-23.50 failed to hold on the bounce to 23.47 afterwards. A close above the latter and the 50-day moving average would signal a retest towards 24-24.50.
Stock Market Analysis
The iShares Russell Growth 1000 ETF (NYSE: IWF) was down for the third time in four sessions following the intraday pullback to $239.41. Current and upper support at $239.50-$239 was breached but held. A close below the latter would signal a retest towards $238-$237.50.
Resistance is at $241.50-$242 followed by $243.50-$244 with the recent all-time peak at $244.35.
RSI is rolling over after failing to hold upper support at 55-50 holding. A move below the latter, and a level that has been holding since early November, would suggest additional weakness towards 45-40 and levels from late October. Resistance is at 60.
Sector
The Consumer Staples Select SPDR Fund (NYSE: XLP) was down for the third time in four sessions following the pullback to $65.78. Near-term and upper support at $66-$65.50 failed to hold. A close below the latter would indicate additional weakness towards $64.50-$64.
Key resistance is at $66.50 and the 50-day moving average.
RSI remains in a downtrend with key support at 40 holding. A move below this level would suggest additional weakness towards 35-30 and levels from late October. Resistance is at 45-50.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.