Stock Market Update: Monday, Nov. 23, 2020
Wall Street rebounded to recover all of Friday’s pullback but remained in a two-week trading range — and more in Monday’s stock market update.
AstraZeneca PLC (Nasdaq: AZN) announced its vaccine is up to 90% effective in trials, helping boost sentiment and now representing a third piece of COVID-19 treatment news in the past three weeks.
Earnings were busy with some Tech and more retail companies highlighting the shortened holiday week. Meanwhile, volatility continues to give a neutral reading in a shorter, six-session trading range.
Stock Market Update
The Russell 2000 zoomed 1.9% with the afternoon and fresh all-high hitting 1,827.
The Dow jumped 1.1% after testing a final-hour high of 29,667.
The S&P 500 gained 0.6% following the opening push to 3,589.
The Nasdaq traded on both sides of the ledger while closing higher by 0.2% and testing a morning high of 11,949.
Energy was the lead for sector strength after skyrocketing 7.1% while Financials and Industrials rallied 1.9% and 1.6%, respectively. Healthcare and Real Estate paced sector laggards after falling 0.3%.
Stock Market Movers
Chevron Corp. (NYSE: CVX) was one of the beneficiaries of the Energy rally and an upgrade with shares advancing 6%. An analyst from RBC Capital upgraded the stock to “Sector Perform” from “Underperform” with a price target of $95. Major resistance at $90 from early August and late July was cleared and held.
Stock Market Outlook
Dollar Tree Inc. (Nasdaq: DLTR) is scheduled to announce third-quarter results ahead of Tuesday’s open with a possible 5% to 10% move coming, depending on the numbers.
The company is expected to report earnings of $1.15 a share on revenue of $6.12 billion. The high estimate is $1.35 a share with the low estimate at $1.04, meaning a potential beat of 20 cents or a miss of 31 cents a share are most likely.
Dollar Tree has topped estimates by 18, 19 and four cents over the past three quarters, but missed by 5 cents year over year. Out of the 26 analysts that follow the company, there are five “Strong Buy” ratings, nine “Buy” ratings, and 11 “Hold” recommendations.
Global Economy
European markets settled mostly lower as eurozone business activity contracted sharply in November.
UK’s FTSE 100 declined 0.3% and the Stoxx 600 was lower by 0.2%. Germany’s DAX 30 and France’s CAC 40 slipped 0.1%. The Belgium20 rose 0.8%.
Eurozone IHS Markit’s flash composite PMI fell to 45.1 in November, versus forecasts for a reading of 46.1, and from 50 in October.
Asian markets closed mostly higher despite news the Trump administration is looking at moves to restrict 89 Chinese aerospace and other companies from buying a range of U.S. goods and technology.
Australia’s S&P/ASX 200 climbed 0.3% and Hong Kong’s Hang Seng edged up 0.1%. South Korea’s Kospi nudged up 1.9% and China’s Shanghai rallied 1.1%. Japan’s Nikkei fell 0.4%.
Stock Market Sentiment
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) had its four-session winning streak snapped following the intraday pullback to $160.28. New and upper support at $160.50-$160 and the 50-day moving average were breached but failed to hold.
Resistance remains at $161.50-$162 and the 200-day moving average.
Volatility Index
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the second time in three sessions with the intraday low tapping 22.45. Current and upper support at 22.50-22 was cracked but held. A close below the latter would suggest another retest towards 21.50-21 with last week’s monthly low at 21.66.
Resistance remains at 24-24.50 followed by 25.50-26.
Stock Market Analysis
The iShares Russell Growth 1000 ETF (NYSE: IWF) rebounded despite tagging an intraday low of $223.94. Near-term and upper support at $224-$223.50 was breached but held. A close below the latter would indicate further weakness towards $222.50-$222.
Resistance is at $227.50-$228 followed by $229.50-$230.
RS has leveled out with lower resistance at 55-60 holding. A move above the latter and monthly peak would suggest additional strength towards 65-70 and prior levels from the first half of August. Key support is at 50.
Sector
The Consumer Staples Select SPDR Fund (NYSE: XLP) finished slightly higher despite the intraday pullback to $66.11. Near-term and upper support at $66.50-$66 was breached but held. A close below the latter would indicate additional weakness towards $65-$64.50 and the 50-day moving average.
Lower resistance at $67-$67.50 was challenged but held on the bounce to $66.72 afterwards.
RSI is trying to flatten out after holding upper support at 55-50. Resistance is at 60 with a move above this level signaling a retest towards 65-70.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.