Stock Market Update: Wednesday, Nov. 4, 2020
Wall Street showed momentum throughout the session as investors, voters and all Americans wait to hear who has been elected as president — and more in Wednesday’s stock market update. Both Democrats and Republicans are expressing confidence in their odds as ballots continue to be counted in five swing states.
The Republican hold of the Senate makes a harsh antitrust judgement against big tech unlikely, hence the rally in that sector. Of course, a GOP Senate also diminishes the chance for massive stimulus should former Vice President Joe Biden win. The House remains firmly in Democratic control.
Stock Market Update
The Nasdaq zoomed 3.9% after trading to a high of 11,663.
The S&P 500 soared 2.2% following the first-half run to 3,486.
The Dow jumped 1.3% after testing an intraday peak of 28,301.
The Russell 2000 edged up 0.1% with the midday high reaching 1,631.
Healthcare and Communication Services led sector strength after surging 4.5% and 4.3%, respectively. Materials and Utilities paced sector laggards after falling 1.7% and 1.5%.
Stock Market Movers
Shares of Uber Technologies Inc. (NYSE: UBER) and Lyft Inc. (Nasdaq: LYFT) rose 14% and 11%, respectively, after California voters approved Proposition 22. This was a ballot measure that exempts ride-sharing and delivery companies from a new California law that forces such companies to reclassify their workers as employees rather than contractors, and offer benefits such as unemployment protection.
The news was a big win for both companies as Prop 22 approval removes a significant overhang and dark cloud and ends the confusing AB5 legislation chapter that was a major threat to the future of the gig economy.
Stock Market Outlook
Qualcomm Inc. (Nasdaq: QCOM) will report fourth-quarter numbers after the market closes. In its last earnings update, the company guided for Q4 earnings per share of $1.05-$1.25 on revenue of $5.5-$6.3 billion. At the time, analysts expected the company to report Q4 earnings of $1.10 on revenue of $5.78 billion.
The consensus estimates have since risen to $1.17 a share and $5.94 billion, respectively. Over the past four quarters, Qualcomm has beaten estimates by 15, 10, 14 and seven cents.
Global Economy
European markets closed higher across the board despite slightly disappointing economic news.
France’s CAC 40 soared 2.4% and the Stoxx 600 added 2.1%. Germany’s DAX 30 rocketed 2% and UK’s FTSE 100 jumped 1.7%. The Belgium20 was up 1.6%.
Eurozone purchasing manager’s index for October checked in at 50, down from 50.4 in September.
Asian markets were mixed.
Japan’s Nikkei was higher by 1.7% and South Korea’s Kospi gained 0.6%. China’s Shanghai nudged up 0.2%. Hong Kong’s Hang Seng slipped 0.2% and Australia’s S&P/ASX 200 dipped 0.1%.
Stock Market Sentiment
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) rebounded after surging to an intraday high of $162.17. Lower resistance at $161.75-$162.25 and the 200-day moving average was cleared but levels that held.
Fresh support is at $160.50-$160 and the 200-day moving average.
Volatility Index
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) fell for the third straight session after plunging to an intraday low of 28.03. Prior and upper support at 28.50-28 and the 50-day moving average was breached but held. A close below the latter would be an ongoing bullish signal for the stock market with additional backtest potential towards 26.50-26.
Lowered resistance is at 30-30.50 followed by 31.50-32 and the 200-day moving average.
Stock Market Analysis
The Wilshire 5000 Composite Index (NYSE: WLSH) extended its winning streak to three straight sessions with the midday high tapping 35,957. Prior and lower resistance from early October at 35,750-36,000 was breached but held. A close above the latter would indicate additional strength towards 36,250-36,500.
Rising support is at 35,250-35,000 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 indicate additional momentum towards 65-70 and levels from mid-October.
Sector
The SPDR S&P Homebuilders ETF (NYSEArca: XHB) showed strength for the third straight session following the intraday push to $56.82. Prior and lower resistance at $56.50-$57 was cleared but held. A close above the latter would be an ongoing bullish signal for upside towards $58-$58.50 with its October peak at $58.34.
Rising support is at $55.50-$55 with backup help at $54-$53.50.
RSI remains in an uptrend with key resistance at 60 holding. A close above this level would signal additional upside towards 65-70 with the latter representing the October top. Support is at 55-50.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.