Stock Market Update: Thursday, Dec. 17, 2020
Wall Street kept its ongoing momentum, pushing into unchartered territory as continued hopes for a $900 billion stimulus package drove bullish sentiment — and more in Thursday’s stock market update.
Anticipation that a vaccine rollout will allow a return to normalcy later next year is overshadowing increasingly abnormal conditions as infections march higher.
Stock Market Update
The Russell 2000 rallied 1.3% after closing on its record high of 1,978.
The Nasdaq jumped 0.8% with the late-day, all-time peak reaching 12,765.
The S&P 500 rose 0.6% after testing a record high of 3,725.
The Dow gained 0.5% with the afternoon high tagging 30,323, 2 points shy of Monday’s all-time intraday peak of 30,325.
Real Estate and Materials paced sector strength after rising 1.2%. Energy and Communication Services were the only sector laggards with losses of 0.5% and 0.3%, respectively.
Stock Market Movers
DoorDash Inc. (NYSE: DASH) shares were lower after a research firm said in a newly published report that the food delivery company’s recent offering of stock was the most ridiculous IPO of 2020.
According to the report, there is no business that is more commoditized and competitive than having food delivered from the restaurant to your home. This business model has no brand loyalty, as the consumer just seeks the cheapest delivery price. The report argues the stock should trade to $40 quickly as insiders eagerly await to dump their shares.
Stock Market Outlook
Nike Inc. (NYSE: NKE) will announce quarterly results after Friday’s closing bell. The company is expected to earn a profit of 62 cents a share on revenue of $10.55 billion. The high estimate is at 81 cents a share with the low forecast at 44 cents, equating to a 19-cent beat or an 18-cent miss.
The company has beaten or missed forecasts the past four quarters by 48 cents, -58 cents, -6 cents and 12 cents. There are 35 analysts that cover the stock with seven “Strong Buy” ratings, 14 “Buys,” 13 “Holds” and one “Underperform” rating.
Global Economy
European markets showed strength following expectations that a Brexit deal can be reached by Friday.
Germany’s DAX 30 soared 0.8% and the Belgium20 rose 0.4%. The Stoxx 600 advanced 0.3% and France’s CAC 40 edged up 2 points, or 0.03%. The UK’s FTSE 100 fell 0.3%.
Asian markets settled mostly higher.
Australia’s S&P/ASX 200 rallied 1.2% and China’s Shanghai jumped 1.1%. Hong Kong’s Hang Seng rose 0.8% and Japan’s Nikkei added 0.2%. South Korea’s Kospi slipped a point, or 0.1%.
U.S. Economy
Initial Jobless Claims rose 23,000 to 885,000 versus 146,000 to 862,000 in the prior week. Claims unseasonably fell -21,300 to 935,100 after bouncing 238,000 to 965,500 previously. Continuing claims plunged -273,000 to 5,508,000 following the 254,000 rise to 5,781,000 previously. The insured unemployment rate dipped to 3.8% from 3.9%.
Housing Starts rose another 1.2% to 1,547,000 in November, versus October’s 6.3% jump to 1,528,000. Single family starts were up 0.4% to 1,186,000 from 1,181,000 in October. Multifamily starts climbed 4% to 361,000 from 347,000 previously.
Stock Market Sentiment
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) extended its losing streak to four sessions despite trading to an intraday high of $158.46. Current and lower resistance at $158-$158.50 was cleared but held. A close above the latter and the 50-day moving average would suggest additional strength towards $159.50-$160.
Upper support at $156.50-$156 was breached by the fade to $156.43 but held.
Volatility Index
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the third straight session with the intraday low hitting 21.52. Current and upper support at 22-21.50 was recovered. A close below the latter would indicate a retest towards 20.50-20.
Lowered resistance is at 23-23.50 followed by 24-24.50.
Stock Market Analysis
The S&P 400 Mid Cap Index (NYSE: MID) traded in a tight range with the afternoon and all-time peak reaching 2,297. Key resistance at 2,300 was challenged but held. A close above this level would likely indicate a fresh breakout towards 2,325-2,350.
Support is at 2,275-2,250 with a close below the signaling a further backtest towards 2,225-2,200.
RSI (relative strength index) is trying to curl higher with key resistance at 70 getting cleared and holding. Continued closes above this level keeps strength towards 75 and the early June peak in play. Support is at 65.
Sector
The SPDR Gold Shares (NYSE: GLD) was up for the third straight session with the intraday high reaching $177.87. Prior and lower resistance from early November at $177.50-$178 was breached but held. A close above the latter would be an ongoing bullish signal for additional upside towards $179-$179.50.
Fresh support is at $176-$175.50 and the 50-day moving average.
RSI is in an uptrend after clearing and holding lower resistance at 55-60. A close above the latter would suggest additional strength towards 65-70 and levels from early July. Support is at 50-45.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.