Stock Market Update: Monday, Dec. 7, 2020

Wall Street was mixed throughout, with Tech and the small caps outperforming as economic news and earnings were light — and more in Monday’s stock market update.  

More good news about coronavirus vaccines and delivery dates helped offset some of the mild profit-taking following Friday’s fresh closes at all-time highs. 

The action helped push the Nasdaq and Russell 2000 to another round of record highs, although the small caps closed slightly lower. Meanwhile, volatility edged higher after failing to clear and hold key support at the 20 level last week.

Stock Market Update 

The Nasdaq gained 0.5% with the record peak hitting 12,536.

The Dow was down 0.5% following the intraday fade to 29,967 with the 30,000 level holding into the closing bell.

The S&P 500 slipped 0.2% while tagging an afternoon low of 3,678.

The Russell 2000 dipped a point, or 0.1%, despite trading to a midday and all-time high of 1,897.

Communication Services and Utilities led sector strength after both rose 0.6%. Energy was the weakest sector after tumbling 2.4%.

Stock Market Movers

Shares of Eastman Kodak (NYSE: KODK) skyrocketed 60% following news that the U.S. International Development Finance Corporation found no wrongdoing in the process that created a now-halted U.S. loan to the company to produce drug ingredients for the COVID-19 vaccine. 

DFC Inspector General Anthony Zakel said in his response to Sen. Elizabeth Warren, D-Mass., that he found no evidence employees of the agency had any conflicts of interest in the plans, nor did he find any evidence of misconduct on the part of DFC officials.

Stock Market Outlook 

Two of the most anticipated initial public offerings will debut this week at higher valuations. 

Airbnb Inc. (Nasdaq: ABNB) plans to boost the proposed price range of its IPO to between $56-$60 a share, equating to a valuation of $39-$42 billion. The U.S. home rental firm had previously set a price range for its IPO to sell shares in the $44-$50 range. Airbnb will make its stock market debut Thursday.

Meanwhile, DoorDash Inc. (NYSE: DASH) is expected to debut Wednesday and plans to price its shares at the high end of its new range of $90-$95 a share. This would give the company a valuation of as much as $36 billion or more. While keeping the share count the same, the new range was raised from its previous range of $75-$85. The updated pricing gives DoorDash a market valuation of about $30 billion.

Global Economy

European markets settled lower as the lack of progress in the ongoing Brexit talks weighed on sentiment.

The Belgium20 dropped 0.8% and France’s CAC 40 lost 0.6%. The Stoxx 600 was down 0.3% and Germany’s DAX 30 slipped 0.2%. UK’s FTSE 100 edged up 0.1%. 

Asian markets were mixed following news the U.S. is preparing to impose sanctions on a number of Chinese officials over their alleged roles in Beijing’s disqualification of elected opposition legislators in Hong Kong.

Hong Kong’s Hang Seng sank 1.2% while China’s Shanghai and Japan’s Nikkei fell 0.8%. Australia’s S&P/ASX 200 rose 0.6% and South Korea’s Kospi added 0.5%. 

U.S. Economy

Consumer Credit rose $7.2 billion in October, well below forecasts for a print of $17 billion, after bouncing $15 billion in September. Non-revolving credit continued to outperform, rising $12.7 billion after climbing $12.4 billion in September. Revolving credit weakened, falling -$5.5 billion after rising $2.6 billion previously.

Stock Market Sentiment

The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) rebounded after trading to an afternoon high of $156.88. Prior and lower resistance at $156.50-$157 was cleared and held. A close above the latter would indicate a possible retest towards $158-$158.50.

Support is at $156-$155.50 followed by $155-$154.50.

Volatility Index

The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the fourth time in five sessions after trading to an intraday peak of 22.62. Prior and lower resistance at 22.50-23 was tripped but held. A close above the latter would signal a retest towards 23.50-24.

Current support is at 21-20.50 followed by 20-19.50.

Stock Market Analysis

The Invesco QQQ Trust (Nasdaq: QQQ) extended its winning streak to 10 sessions after trading to an intraday all-time high of $307.63. Unchartered territory and lower resistance at $307.50-$308 was cleared but held. A close above the latter would indicate additional momentum towards $309.50-$310.

Rising support is at $305.50-$305 followed by $303.50-$303.

RSI (relative strength indicator)remains in an uptrend with key resistance at 70 holding. A close above this level would signal additional strength towards 75-80 and levels from early September. Support is at 65-60.

Sector

The Utilities Select Spdr Fund (NYSE: XLU) was up for the first time in three sessions after testing a morning high of $63.06. Near-term and lower resistance at $63-$63.50 was breached but held. A close above the latter and the 50-day moving average would signal further strength towards $64-$64.50.  

Support is at $62-$61.50 followed by $60.50-$60.

RSI is back in an uptrend with lower resistance at 45-50 holding. Support is at 40.

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Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.