Wall Street showed continued strength following news that the Trump administration approved the start of a formal transition to President-elect Joe Biden — and more in Tuesday’s stock market update.
Additionally, the pick of former Federal Reserve Chair Janet Yellen, a well-known quantity for Treasury Secretary, has calmed fears of a more radical pick, helping fuel bullish sentiment.
It is expected that the Biden administration and Yellen will push for additional fiscal stimulus. The gains propelled the major indexes towards the top of the recent trading ranges with fresh all-time highs for the blue chips and the small caps.
The Russell 2000 rallied 1.9% with the midday and fresh all-time high hitting 1,862.
The S&P 500 rose 1.6% following an intraday trip to 3,642.
The Dow was higher by 1.5% after tagging an afternoon and record peak of 30,116.
The Nasdaq gained 1.3% with the intraday high hitting 12,049.
Energy led sector strength for the second straight session after zooming 5.1% while Financials and Materials jumped 3.5% and 2.5%. There were no sector laggards.
Ambarella Inc. (Nasdaq: AMBA) shares gained 15% after delivering solid third-quarter results. The company reported a profit of 9 cents a share on revenue of $56.1 million versus forecasts for a profit of five cents a share on revenue of $55 million. Six brokerage firms raised their price targets — with Craig-Hallum the most bullish to $90 from $75 — while keeping a buy rating on the stock.
With Tuesday’s results, the major indexes are showing signs of breaking out of 12-session trading ranges with the higher closes pushing the action towards the top, past key resistance levels. Below are the key resistance levels needing to clear and hold to ignite another swoosh higher. The latter numbers are today’s and the recent all-time intraday highs.
Tech and the small caps have been more volatile but have strong, upward-sloping 50-day moving averages along with the blue-chips and the S&P 500, although they aren’t as pronounced.
To identify potential weakness moving forward, below are the bottom of the trading ranges with key support levels. The latter numbers are the monthly intraday lows inside of these trading ranges.
European markets closed higher across the board following news of the formal transition process to President-elect Biden.
The Belgium20 skyrocketed 3.1% and the UK’s FTSE 100 rallied 1.6%. Germany’s DAX 30 jumped 1.3% and France’s CAC 40 soared 1.2%. The Stoxx 600 gained 0.9%.
Asian markets finished mostly higher.
Japan’s Nikkei surged 2.5% and Australia’s S&P/ASX 200 jumped 1.3%. South Korea’s Kospi advanced 0.6% and Hong Kong’s Hang Seng climbed 0.3%. China’s Shanghai was down 0.3%.
The S&P Corelogic Case-Shiller house price index climbed 1.2% to 232.5 in September, another fresh record high on the index. On a 12-month basis, the index is up 6.6% year-over-year, the fastest pace since April 2018, versus 5.3% previously. The September 10-City index increased 1.3% to 245 after the 1.2% August gain to 242. The 12-month index rose to 6.2% year-over-year versus 4.9%. All of the 20 cities surveyed posted year-over-year gains, led by Phoenix (11.4%) and Seattle (10.1%), with Chicago (4.7%) and San Francisco (4.3%) bringing up the rear.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) fell for the second straight session with the intraday low reaching $159.01. Prior and upper support at $159.50-$159 was breached and failed to hold. A close below the latter would signal a further backtest towards $158-157.50.
Lowered resistance is at $160-$160.50 and the 50-day moving average.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the second straight session with the intraday and fresh monthly low tapping 20.80. Prior and upper support at 21-20.50 was breached but held. A close below the 20 level and the August low of 20.28 would be an ongoing bullish signal for the stock market.
Lowered resistance is at 22.50-23 followed by 24.50-25.
The Wilshire 5000 Composite Index (NYSE: WLSH) extended its winning streak to two sessions with the intraday and new record high tapping 37,957. Unchartered territory and lower resistance at 37,750-38,000 was cleared and held. Continued closes above the latter would indicate continued momentum towards 38,250-38,500.
New support is at 37,500-37,250 with a close below 37,000 signaling a possible near-term top.
RSI (relative strength index) is in an uptrend after clearing and holding lower resistance at 65-70. A close above the latter would indicate additional momentum towards 75-80 and levels from late August/early September. Key support is at 60.
The Dow Jones Transportation Average (NYSE: TRAN) was up for the second straight session after testing a new record peak of 12,772. New and lower resistance at 12,750-12,900 was cleared but held. A close above the latter would be an ongoing bullish signal for additional momentum towards 13,000-13,125.
Near-term support is at 12,600-12,475 followed by 12,400-12,275.
RSI is in an uptrend with key resistance at 70 holding. A close above this level would signal additional strength towards 75-80 and levels from August. Support is at 65-60.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.