The last time investor sentiment was so bullish was right before a 10% correction in the S&P.
ToplineStocks continued to rally on Tuesday, with all of the major indexes hovering at or near record highs after blowout retail earnings and added clarity in Washington, but the bull market's raging optimism could spell trouble for stocks in the short term.
President-elect Joe Biden in Wilmington, Deleware on November 10.The Washington Post via Getty ImagesKey FactsShortly after the market open, the Dow Jones Industrial Average was climbing 340 points, or 1.1%, while the S&P 500 and the tech-heavy Nasdaq edged up 0.8% and 0.4%, respectively.
Stocks got an early boost from added clarity in Washington, particularly with the announcement that President-elect Joe Bidenhas chosenformer Federal Reserve Chair Janet Yellen to head up the Treasury Department–a sign the new administration could be willing to more closely coordinate monetary and fiscal policy to boost the economic recovery. headtopics.com
On the earnings front, Dollar Tree, Dick's Sporting Goods, TIffany and Bed Bath & Beyond were all among retail firms posting blowout quarterly results since Monday's market close, with shares of Dollar Tree leading the pack and surging nearly 8% thanks in part to the firm's
best same-store salesperformance in ten quarters.Food producer Hormel was one of the few firms to report worse-than-expected earnings, saying that more than $80 million in costs related to the pandemic, including lower production volumes, employee bonuses and enhanced safety measures in production facilities, were the largest driver of the firm's profit decline; shares fell 3% after the
announcement. Small-cap stocks continue to outperform the broader market: After lagging the S&P 500 by more than 16% in the first quarter, the Russell 2000 Index, up 1.8% Tuesday, hit a record high for the first time in more than two years last week and is now outperforming the S&P 500 by 11% this quarter, notes LPL Financial Chief Market Strategist Ryan Detrick.
Global markets also extended gains on Tuesday, largely on continued vaccine optimism: Japan's Nikkei 225 ended the day up 2.5%, while the United Kingdom's FTSE 100 was up 1.3% as of U.S. market open, and Germany's blue-chip DAX index had climbed 1.1%. headtopics.com
Crucial Quote "The reaction from stocks since the U.S. election has been truly impressive… but there are some signs that sentiment could be getting a little frothy at the moment, which could increase the odds of a pullback," LPL Financial's Detrick further noted Tuesday morning."Excessive optimism can open the door for contrarian sellers to weigh on prices," he added, pointing to high levels of options trading and equity fund inflows (meaning investors are favoring stocks over cash). The last time investors were as bullish as they are today was in late August, Detrick notes, right before a nearly 10% correction in the S&P 500.
Tangentwill allowfor a formal transition in the White House to occur–something that Vital Knowledge Media Founder Adam Crisafulli said is"positive, but markets were always relatively certain Biden would be sworn in as scheduled on January 20–this just means his team will be better prepared on day one than otherwise would have been the case."
What To Watch For"Georgia is really the last major wildcard for markets," Crisafulli said in a Tuesday note, adding that the GSA's decision to officially begin Biden's transition could actually help increase the odds that Republicans keep control of the Senate–which many experts have said is Wall Street's best-case election outcome and largely why the market rallied after Biden's presumptive victory."If Trump ends his quixotic quest to stay in the White House and begins campaigning for Perdue and Loeffler [the two Republicans in the race], that would help shore up support for the GOP and raise the odds of victory for at least one of those two." Two Democratic victories, on the other hand, would make a Biden Administration much more likely to exact bolder policy–something that would surely require a stock-market adjustment.
Romney calls Capitol riot 'an insurrection incited by the President'
Congress will resume the joint session tonight to certify President-elect Joe Biden's win after Pro-Trump rioters stormed the US Capitol earlier today. Follow here for the latest.
For a market that is informationally efficient, I expect this mood swing till January 21. Are all your lawyer buddies set to get rich from this? I can see the lawyer commercials 20yrs from now.. ' did u take the vaccine? Did u grow a 3rd eye ? ' call us we will take your case!! Yeah, you sir will cause a civil war with your ideals of globalization!!
Election being over is already baked in. Current Market move is due to several Covid19 vaccine and drugs being made available. StockMarket 2021 Biden- Harris administration brings leadership, stability, integrity & diplomacy. And qualified cabinet members who put country first! That will last about 6 months. 😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂😂
Let me guess why? How😂😂 Yes agree! Trump won in a landslide and everyone is excited. USA USA USA!!!!!! thank you very much for your work Best Seller rank buy now