Commenting on the Morgan Stanley and Walgreens’ earnings and today’s trading, Gorilla Trades strategist Ken Berman said:
Bullish Earnings Of Morgan Stanley And Walgreens
The major indices are all trading significantly lower at midday following a bearish overnight session which saw a steep drop in European assets. The deteriorating European COVID picture remains in focus together with the still ongoing stimulus talks, and the major indices are on track for their third bearish session in a row due to the uncertainties. Goldman Sachs (GS, -0.7%) cut its outlook for the tech sector to neutral which contributed to the overnight relative weakness of the Nasdaq, but the bullish earnings of Morgan Stanley (MS, +1.8%) and Walgreens (WBA. +3.2%) gave a boost to the S&P 500 and the Dow.
In economic news, the Philly Fed Index surged to its highest level since January, beating the consensus estimate by a wide margin, with a reading of 32.2 and while the Empire State Manufacturing Index missed slightly, cyclical issues and industrials, in particular, have been supported by the huge beat. On a negative note, the number of new jobless claims jumped to almost 900,000, the highest since August. That said, the large drop in continuing claims confirmed the ongoing job market recovery, and the fact that small-caps have been showing strength in early trading suggests that investors are still positive regarding the outlook of the domestic economy.
Dow: 28,375, – 111 or 0.4%
S&P 500: 3,467 – 21 or 0.6%
Nasdaq: 11,650, – 113 or 1.0%
Russell 2000: 1,617, – 7 or 0.4%
Market breadth has been relatively strong this morning, with decliners only outnumbering advancing issues by a 3-to-1 ratio on the NYSE at midday. 21 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 15 stocks hit new 52-week highs. The major indices have been hovering around their daily VWAPs (Volume-Weighted Average Price) for throughout the morning session, pointing to a mixed and choppy afternoon. Real estate stocks are the only ones being in the green at midday, on average, and most of the key sectors have been struggling to bounce back following the sharp opening selloff, industrials and financials have been showing encouraging stability thanks to the positive earnings surprises and the blowout Philly Fed Index. Stay tuned!
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