Before The Bell
The stock market performed well yesterday, as a continuation of the rally occurred after the Pfizer (PFE) vaccine achieved FDA approval on Monday. Additionally, several large retailers and Chinese internet companies recorded strong quarterly results, helping to improve investor sentiment. Further, some meme stocks raced higher in the early portion of the day.
Meanwhile, some positive economic indicators, including a higher-than-expected rise in new home sales, were a plus. The stock indices started to climb in the early portion of the session. The S&P 500 and NASDAQ reached all-time highs, while the Dow Jones Industrial Average was not too far from its apex. However, the indices took a small pause in the middle of the session backing off of session highs. The major indexes made one final push higher in the afternoon, further advancing and closing not too far from the highs. Overall, the S&P 500 rose seven points, the NASDAQ was up 77 points, and the Dow climbed 31 points.
Moreover, market breadth was very positive, with advancers outpacing decliners by a 2.1-to-1.0 ratio. Energy issues were among the strongest performers on the day, aided by a rise in the related commodities, while consumer staples were among the weakest. Oil prices were higher, buoyed by improved sentiment for the economy. The VIX Volatility Index was flat on the day, suggesting that there was little demand change from traders for options protection.
The futures market started unevenly yesterday after a strong day of trading. Traders did not move the market much throughout the evening, and the futures were largely flat through the night. Investors were likely waiting for the durable goods orders figures for July, which were mixed but on the positive side showed a pickup in orders when excluding the transportation component. The futures turned slightly positive on the durable goods orders report, and are now pointing to a higher open.
Looking ahead to the rest of the week, most eyes will be on U.S. Federal Reserve Chairman Powell’s virtual statement at the Jackson Hole summit. Investors will be looking to see if they can gather any information about the future of interest rates. The Jackson Hole speech is usually one of the most important talks given by the Fed Chairman each year. Moreover, traders will look toward the University of Michigan’s Consumer Sentiment index and personal income and spending for July on Friday. Earnings season has been winding down, through a few notable companies are slated to report quarterly results over the rest of the week. Dick’s Sporting Goods (DKS) stock is up notably in pre-market action after the sporting goods company reported strong July-period results this morning and declared a special dividend of $5.50 a share.
– John E. Seibert III
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
