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Afternoon Note

Markets Rally

By Charles Payne, CEO & Principal Analyst
10/5/2020 1:46 PM

Pretty good session thus far with the market rally holding up nicely. Investors jockey for positions, just in case Washington DC. does the right thing.

The mounting list of positive Covid19 cases in the administration is not roiling the market, although the move has begun to stall, which isn’t unusual at this time of day. 

Healthcare is the big winner from all the news about measures taken to treat President Trump. Technology is also picking up steam after a slower start than the board market, out the gate. 

Semiconductors are being led by Nvidia (NVDA), which announced it is working with the UK to build the biggest supercomputer there to help combat Covid19.

Insurance names are getting a big bump from a legal ruling the prohibits class action legal cases from small businesses that claim interruption policies should be paid out because of the coronavirus and associated lockdowns. 

Energy is up again but I’m not taking the bait…yet.

S&P 500 Index

+1.41%

 

Communication Services XLC

+1.43%

 

Consumer Discretionary XLY

+0.86%

 

Consumer Staples XLP

+0.41%

 

Energy XLE

+1.82%

 

Financials XLF

+1.42%

 

Health Care XLV

+1.78%

 

Industrials XLI

+1.23%

 

Materials XLB

+1.66%

 

Real Estate XLRE

 

-0.60%

Technology XLK

+1.77%

 

Utilities XLU

+1.14%

 

 

Bonds Making Statement

With three hours to go in trading, all eyes are on the stock rally, but there is something even more intriguing happening in the bond market.  Yields are moving higher and yield curves are steepening. 

Meanwhile, bank stocks are looking more compelling, as Goldman Sachs (GS) and JP Morgan (JPM) are right on the cusp of breaking out through their respective 50-day moving averages and breaking out from a cup and handle formation.

What's the message from the move in bonds and how should it inform your investing decisions?

Resistance Looming

Those key resistance points continue to hold.

I know we are so close to the breakout, but let’s see what happens on a closing basis.


 

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