After a long period of underperforming the other major Indexes, the Nasdaq finally had a day to shine. It closed at a new all-time high while the other indexes had inside days. Volume was lower and traders focused mostly on buying the pullbacks in mid-cap growth stocks.
The Nasdaq finally blew through the 12,000 resistance level today while the other indexes set new highs. The Dow Jones Industrial closed above 30,000 for the first time in its long history. The buying was broad with two advancing stocks for every declining stocks and included some recovery of the mega-caps after so much recent focus on small-caps .
The Nasdaq continued its march sideways on Monday as the other indexes had gains and the Russell 2000 closed at another all-time high. Investors remain focused on small caps, energy, and industrials as a more positive outlook on the economy is supported by additional vaccine news to end the pandemic.
The market showed signs of nervous investors today likely from a disagreement between the Treasury Department and the Fed. That nervousness turned into a sell-off in the afternoon that ended with the index at its daily lows. We did get the higher high and higher low that I hoped for in yesterday’s update. There were also bright spots among some growth stocks with just over half of stocks in the Nasdaq ending the day with gains. Otherwise, it was a disappointing end to a very sideways week which closed almost exactly where it opened.
After yesterday’s late afternoon change in character, the market reversed back to the behavior from the previous several days: modest gains, small-caps , energy as the leading sector and rising breadth across advancing stocks. The only thing that did not occur is a higher high and higher low, something to look for on Friday.
The market ended today with a character change, raising questions about where it may go in the near term. The competing optimism and pessimism with the pandemic and economy led to a day and a half of indecision which finally turned to a downside move at the end of Wednesday. The character change is noted and will follow closely over the next few days.
Today the Nasdaq had a lot of back and forth but within a tight trading range. After shaking off lower than expected retail sales growth, the index grew to a higher high than the previous day. But later in the day sold off perhaps due to dire economic outlooks from FOMC members and the Fed’s Jerome Powell.
The Nasdaq started the week off with a decent gain that showed a positive reaction to comments from the November FOMC meeting. FOMC committee members Daly and Clarida made public comments around 14:00pm that monetary policy , including quantitative easing and interest rates, would remain the same while watching the economy closely. Investors responded positively to the remarks as the indexes pivoted back toward highs of the day.
The Nasdaq was left out of the all-time high close party where the other indexes celebrated today. It was still a good day, but the focus was on sectors other than Technology, which is heavily represented in the Nasdaq. Producer Price Index (PPI) data came in higher then expected while Core PPI (which excludes Energy and Food) came in lower than expected. Investors seemed to attribute that to the Energy sector, which was the top performing sector of the day.
The market started the day with some energy when Initial Jobless Claims came in less than expected showing some positive news against continued economic worries surrounded by the pandemic. However, quickly sold off led by the Energy sector after Crude Oil Inventories showed a surprise increase when a decrease was expected. Core CPI came in less than expected and could be a sign of continued economic weakness.