Nasdaq Breached Its All-Time High At Closing

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Commenting on the Nasdaq breaching its all-time high today’s trading Gorilla Trades strategist Ken Berman said:

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Nasdaq Breaches Its All-Time High

While the S&P 500 and the Dow showed weakness today, the Nasdaq breached its all-time high and closed at its highest level in history. Today’s session proved that the foundation of the rally is solid, as thanks to the Nasdaq’s rally, all of the large-cap benchmarks will spend Thanksgiving Day within 1% of their record all-time highs, and the same can be said about the Russell 2000.

The key sectors continued to diverge substantially today with tech stocks showing strength and the hardest-hit industries and cyclical issues giving back some of their recent gains. Despite the pullback, today's mixed price was in line with the continuation of the vaccine rally, as even though the undoubted leaders of the advance, energy-related issues suffered a hit, the price of oil marched higher again, hitting a new recovery high. Consumer stocks, especially consumer staples also shined, but industrials, financials, and materials all closed in the red.

The minutes of the Fed’s latest meeting came out this afternoon, and socks turned slightly lower across the board in the wake of the release. While the minutes revealed that several committee members were advocating a boost to the Central Bank’s quantitative easing (QE) program, both in size and maturity, investors likely wanted to see stronger commitment from the FOMC. That said, the recent deterioration in the job market data makes further easing very likely next month, so it’s no surprise that the dollar edged closer to its multi-year lows today.

The Impact Of Coronavirus On Retail Sales

Today’s economic releases confirmed the trends of the past couple of months in all sectors.Personal spending held up well in the face of the dropping personal incomes, which is a positive sign for the retail sector ahead of the holiday seasons, even as the virus will definitely have an impact on sales. The bullish durable goods report further improved the outlook for the robust manufacturing sector, while new home sales remained near their 13-year high, as the mini housing boom continued last month.

Retailers are certainly in for an unusual Black Friday, and this weekend's trends could provide very important clues regarding the future of the sector. The already swift transition towards online channels got a huge boost from the pandemic, and e-commerce sales are expected to smash every record this year. That said, several leading brick-and-mortar players have been adapting well to the new competitive conditions, with Walmart (WMT, +0.3%) being the most obvious example. This holiday season will likely be a major milestone for such firms, even though it's hard to gauge the long-term impact of the virus. Stay tuned!

Headlines

  • The Fed is ready to provide further support to the economy according to the minutes of the latest FOMC meeting
  • The pressure on the labor market increased for the second week in a row with new jobless claims nearly hitting 800,000 once again
  • Cyclical issues pulled back following two very strong session, and the major indices finished mixed in choppy trading
  • The current waves of COVID outbreaks might be starting to peak according to the latest data, but experts fear that this week’s holiday could lead to another spike in infections
  • Shares of Slack (WORK, +37.6%) surged higher on the news that Salesforce (CRM, -5.4%) is in talks to acquire the firm

Market Wrap

Decliners outnumbered advancing issues by a more than 3-to-2 ratio on the NYSE today, with 49 stocks hitting new 52-week highs and no stocks hitting new 52-week lows, while volume was in line with the average.

Price Action Gauge ******** (reading for 11/25: 83)

Price action deteriorated slightly today as cyclicals pulled back, but the major indices are still very close to their all-time highs, and there is no sign of weakness “under-the-hood” either.

Oversold/Overbought Gauge ******** (reading for 11/25: 29 Color: green)

Despite today’s mixed session, the most reliable momentum indicators, continued to push higher, and the major indices are still moderately overbought according to them, leaving room for stocks to extend the rally.

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