Stock Market Recap: Thursday, Jan. 7, 2021
Wall Street closed higher for the third straight session after Congress certified President-elect Joe Biden’s victory in the Electoral College and formally recognized him as the next U.S. president — and more in Thursday’s stock market recap.
Better-than-expected jobless claims and optimism over more stimulus helped sentiment with the major indexes setting another round of record highs.
Stock Market Recap
The Nasdaq zoomed 2.6% after trading to a fresh lifetime peak of 13,090.
The Russell 2000 jumped 1.9% with the morning all-time high reaching 2,099.
The S&P 500 soared 1.5% following the intraday record push to 3,811.
The Dow was up 0.7% after trading to an all-time first-half high of 31,193.
Technology and Consumer Discretionary paced sector leaders with gains of 2.7% and 1.9%, respectively. Utilities and Consumer Staples were the only sector laggards after giving back 1.4% and 0.3%.
Stock Market Movers
Shares of 3D Systems Inc. (Nasdaq: DDD) skyrocketed 104% after the company said it sees fourth-quarter revenue coming in at $170-$176 million, versus current forecasts just below $140 million. 3D also sees fourth-quarter non-GAAP operating income in the range of $11-$19 million.
Stock Market Outlook
The percentage of Nasdaq 100 stocks trading above the 50-day moving closed at 85.29%, up 9.80%. Near-term and lower resistance at 85%-87.50% was recovered. A move above the latter would indicate a retest towards 90%-92.5% and overbought levels from early December. Support is at 82.5%-80%.
The percentage of S&P 500 stocks trading above the 200-day moving average settled at 89.70%, down 0.79%. Current and upper support at 90%-87.5% was breached and failed to hold. A close below the latter would signal weakness towards 85%-82.5% and overbought levels from mid-November. Resistance is at 92.5% and the early December top.
Global Economy
European markets settled higher across the board.
France’s CAC 40 and the Belgium20 rose 0.7% while Germany’s DAX 30 gained 0.6%. The Stoxx 600 was higher by 0.5% and the UK’s FTSE 100 added 0.2%.
Asian markets closed mostly higher.
South Korea’s Kospi rallied 2.1% while Australia’s S&P/ASX 200 and Japan’s Nikkei soared 1.6%. China’s Shanghai was up 0.7%. Hong Kong’s Hang Seng fell 0.5%.
U.S. Economy
Challenger reported layoffs rose 77,000 in December, with the 2020 total at 2,305,000. Up 134.5% year-over-year, compared to last December. However, the fourth quarter represented the fewest cuts of the year with 222,000, down -55.3% from the third quarter. The entertainment/leisure sector saw the highest number of announced layoffs for the year at 866,000, up 5,688% versus the 15,000 announced in 2019. Announced hirings fell -108,200 to 77,300 versus 185,500 in November.
Initial Jobless Claims declined -3,000 to 787,000, below forecasts for print of 815,000, and follows the -16,000 dip to 790,000 previously. This left the four-week moving average at 818,800 versus 837,5000. Initial claims not seasonally adjusted rose 77,400 to 922,100 versus the -28,200 slide to 844,700 previously. Continuing claims declined -126,000 to 5,072,000 while the insured unemployment rate was unchanged at 3.5%.
Stock Market Sentiment
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) fell for the fourth straight session with the afternoon low tapping $151.26. Prior and upper support from late March at $151.50-$151 was breached but held. A move below the latter would signal a further slide towards $150.50-$150.
Lowered resistance is at $152-$152.50.
Volatility Index
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) extended its losing streak to three sessions after testing an intraday low of 22.25. Current and upper support at 22.50-22 was recovered. A close below the latter would suggest a further slide towards 21-20.50.
Lowered resistance is at 24.50-25 and the 50-day moving average.
Stock Market Analysis
The Invesco QQQ Trust (Nasdaq: QQQ) was up for the second time in three sessions with the second-half and new all-time peak hitting $315.84. Fresh and lower resistance at $315.50-$316 was cleared but held. A close above the latter would indicate momentum towards the $317-$317.50 area.
New support is at $313-$312.50 followed by $310.50-$310.
RSI (relative strength indicator) is back in an uptrend with key resistance at 60 getting cleared and holding. Continued closes above this level would signal additional strength towards 65-70 with the latter holding since early December. Support is at 55-50.
Sector
The Industrials Select Sector SPDR Fund (NYSE: XLI) extended its winning streak to three sessions following the opening push to $90.18 and a new all-time peak. Unchartered territory and lower resistance at $90-$90.50 was cleared but held. A close above the latter would signal additional strength towards $91.50-$92.
Rising support is at $89-$88.50 followed by $87.50-$87.
RSI is in an uptrend after clearing and holding key resistance at 60. Continued closes above this level keeps upside towards 65-70 in play. Support is at 55-50.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market recap.