Ho-Hum: Another Record Close in Market Indexes
Market participants woke up today with better-than-expected news on Durable Goods Orders from last month, indicating a U.S. economy not just growing on strong tech stocks and low mortgage rates, but actual business investment and growth. This metric has nearly wiped out its pandemic massacre of goods orders in March and April over the past three months, with hopes August can follow suit.
There is also across-the-board positive sentiment regarding the Economic Policy Symposium in Jackson Hole, which starts tomorrow with a speech by Fed Chair Jay Powell. In it, he is widely expected to advocate accommodative policies for investors (zero to near-zero interest rates, etc.) for the foreseeable future. the Fed has already proven to be willing to meet the challenges the pandemic has wrought on the economy, even before the bottom fell out in late March. If there is any inkling Powell may be looking to pump the brakes, the market certainly isn’t seeing it.
Thus, we see once again new record closes at the S&P 500 (+1%) and the Nasdaq (+1.73%). The Dow is now less than 100 basis points from breakeven levels year to date, up 84 points on the day (+0.3%). salesforce.com’s CRM addition to the Dow 30 on August 31st was the catalyst for its 26% run today, setting the pace for all major-index stocks. Netflix NFLX, which posted 11% growth in regular Wednesday trading, benefited from a survey that showed many people will keep their stay-at-home habits in place post-pandemic, and Amazon AMZN rode this wave +2.85% today. Tesla TSLA rose 6.42% on an increased price target at Jeffries to $2500 per share.
These are not necessarily typical tangents on which to rest new all-time highs yet again, but the bulls have been stomping doubters now for six straight months. Sure, there are massive challenges for small businesses and healthcare workers amid 1000 new Covid deaths per day in the U.S. and new outbreaks in Midwestern states like Illinois, Indiana and Iowa.
There is still no new relief package for out-of-work Americans who lost their jobs due to the pandemic. But the market feels this will all be overcome eventually, and there is no sense of anxiety among stock buyers here in the dog days of summer.
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