5/27/20 Market Notes
Equities rose strongly on Tuesday on continued reopening optimism but retreated from highs in late trading on simmering tensions between the US and China. The issue this time surrounds China's impending passage of new security laws that will allow it to intervene directly against the protest movement in Hong Kong. The S&P 500 gained 1.32% and its closing level of 2991 is just shy of its 200-day moving average, a key technical level. The Dow rose 529 points, to finish at 24,995.11, up 2.17%: and the Nasdaq eked out a meager .17% gain. Consistent with the recent rally, top performing sectors included Financials, Industrial, Real Estate, and Energy. Information Technology and Health Care were the only sectors in the red. Safe haven assets again gave up ground. Asian markets were mixed overnight, with weakness in Hong Kong and Shanghai reflecting increased China tensions and Japanese shares gaining on reports of a new $1.1 Trillion Yen stimulus package in the works. Europe is working on its own $800b stimulus package, driving European shares and US futures higher. Looking ahead; Thursday brings US jobless claims for last week, Durable Goods Orders and April GDP. On Friday, Jerome Powell speaks in a virtual discussion. Markets continue to advance on optimism that the worst is behind us, with some help from massive Fed liquidity injections and possibly short covering. At this point, markets look fully valued considering the circumstances and perhaps a breather is in order. Sincerely,
Disclosures: This market commentary is written by the 1879 Advisors® and represents the views of 1879 Advisors®. This commentary is not investment advice and should not be used as a basis to make investment decisions. Please consult with your registered investment advisor before making any investment decisions.