Wall Street maintained its Election Day optimism, with the major indexes closing higher for the second straight session — and more in Tuesday’s stock market update. Expectations that Democrats will capture the White House and the Senate while holding the House of Representatives fueled speculation for a hefty stimulus package.
On the flip side, if voters again defy the poll results and elect President Donald Trump to a second term, he has said the White House would approve a big stimulus deal after the election. The one outcome that could ruin the stock market’s optimistic mood would be if the election results are delayed.
The Russell 2000 showed the most strength after skyrocketing 2.9% with the high reaching 1,620.
The Dow gained 2.1% after testing an intraday peak of 27,640.
The Nasdaq was up 1.9% after tapping a second-half high of 11,213.
The S&P 500 was higher by 1.8% following the morning push to 3,389.
Industrials and Financials led sector strength after rallying 3% and 2.2%, respectively. Energy was the only sector laggard after giving back 0.6%.
Shares of GW Pharmaceuticals (Nasdaq: GWPH) surged 21% after announcing earnings results that were better than expected. The company reported a loss of 3 cents a share on revenue of $137 million versus forecasts for a loss of 83 cents on revenue of $127 million.
Additionally, GW Pharmaceuticals announced it has initiated its Phase 3 study of nabiximols for multiple sclerosis-associated spasticity. Nabiximols is a complex botanical medicine formulated from extracts of the cannabis plant and administered as an oral spray. Also known as Sativex outside of the U.S., it is approved for use to treat multiple sclerosis spasticity in over 25 countries.
The night of the 2016 presidential election was extremely volatile and will likely be just as breathtaking heading into Wednesday’s opening bell. When the news that more states were reporting a Trump victory four years ago, stock market futures sank rapidly throughout the night.
The futures market is often looked at by astute investors to try to get a feel on how the next day’s action on Wall Street might unfold. They can fluctuate throughout the night and even into the opening bell as economic, political, and company specific news from around the world and here at home can impact investor sentiment.
The S&P 500 fell more than 5% in premarket trading in the previous Presidential election, triggering a circuit breaker to halt trading. However, by the time the market closed the day after the election, the index was up over 1%.
While history can, and often does, repeat itself, there is no guarantee this same scenario will play out this year. Wall Street feels the market will go higher no matter which candidate wins as they expect another round of stimulus once the dust settles.
The major indexes could, at some point, reach fresh all-time highs but the current technical outlook shows major hurdles must be cleared and held in the coming weeks. If not, and recent support levels start to crack, the bullish outlook could be delayed into 2021.
European markets closed with strong gains despite new restrictive measures that could threaten an economic recovery.
Germany’s DAX 30 soared 2.6% and the Belgium20 was up 2.5%. France’s CAC 40 jumped 2.4% while the Stoxx 600 and UK’s FTSE 100 zoomed 2.3%.
Asian markets settled higher with Japan’s Nikkei closed for a holiday.
Hong Kong’s Hang Seng jumped 2% while South Korea’s Kospi and Australia’s S&P/ASX 200 rallied 1.9%. China’s Shanghai rose 1.4%.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) fell for the third time in four sessions following the intraday fade to $157.04. Prior and upper support at $157.50-$157 was breached but held. A close below the latter and the October low at $156.75 would signal further weakness towards $156-$155.50 and levels from early June.
Lowered resistance at $158-$158.50 followed by $160-$160.50 and the 200-day moving average.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) settled lower for the third time in four sessions after testing a late day low of 34.19. Near-term and upper support at 34.50-34 was breached but held. A close below the 34 level would be an ongoing bullish signal for the stock market.
Lowered resistance is at 36-36.50.
The iShares Russell Growth 1000 ETF (NYSEArca: IWF) was up for the second straight session with the morning high tapping $215.90. Current and lower resistance at $215.50-$216 was cleared but held. A move above the latter would indicate further strength towards $218-$218.50 and the 50-day moving average.
Support is at $212-$211.50 followed by $210-$209.50.
RS remains in a slight uptrend with lower resistance at 45-50 getting cleared and holding. A move above the latter would indicate additional strength towards 55-60. Key support is at 40 and a level that has been holding since late September.
The Health Care Select Sector SPDR Fund (NYSEArca: XLV) was up for the second straight session with the first high hitting $106.14. Prior and lower resistance at $106-$106.50 was cleared but held. A close above the latter and the 50-day moving average would signal a possible retest towards $107-$107.50.
Support is at $104.50-$104 with backup help at $103-$102.50.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.