Increases in SP 500 but little change in the nasdaq. These are the factors to consider.
1- Dow Jones Industrial Average increased 531.53 points, or 2.17%, to 24,996.69, the S&P 500 gained 36.36 points, or 1.23%, to 2,991.81, and the Nasdaq Composite added 15.63 points, or 0.17%, to 9,340.22.
2- The session started well with the values rising before the hopes of recovery by the reopening of the economy and by the constant news about vaccines that are advancing. However, regarding this vaccines to take into account the comments of the CEO of Merck that it is impossible to have a vaccine by the end of the year in safe conditions. But companies continue to invent impossible deadlines, and politicians applaud these comments.
3- A much better-than-expected figure for new home sales also helped, although the Conference Board Consumer Confidence figure was worse than expected.
4- But in the last stretch of the session things got complicated and the indices closed far from highs. Beware the Nasdaq sail that is ugly.
The SP 500 after threatening to break the super resistance zone at 3000 + the average of 200, has finally closed below. It was expected, breaking a resistance like this at the first exchange rate is not the most common.
5- To highlight that in the market it is being commented that this month there are very strong rebalances of the large pension plans, which are going to consist of stock market sales and bond purchases. According to what these experts say in the final stretch of the session, stock sales have already been seen due to these rebalances. As we have commented in other months, this is always a factor to consider. The determiner of which sign will be the rebalance of each month and of what size. Last month’s was small, this month’s is negative and important.
6- The news that has hurt the stock market the most has been that Trump was meeting at the White House with Pompeo to study already important sanctions against China for the National Security Law in H. Kong. Throughout the day the cold war has been growing and growing, relations between both countries are broken and the trade agreement is dead. Today we have seen import figures from China for soybeans and they are buying it all from Brazil. Not even far will it get to what it promised with the US. Attention to this comment: Kudlow said President Donald Trump was “as upset with China over viruses and other issues that the trade deal is not as important to him as it was before.”
Translation, the trade agreement is wet paper.
7- As for the MOC, it has had a lot of movement and the biggest imbalance since May 12, this time to the rise of 900 million dollars. To be exact 1,900 million on the rise and 1,000 million on the down. This indicates that tomorrow there may be movement although it is not yet clear where, the isolated days do not give exact clues, if tomorrow the buyer imbalance were to repeat, it would be a good sign. At the moment the 20-day average remains below zero in the negative.
UnitedHealth largest buyer imbalance with nearly $ 125 million. Mastercard, Merck, The Lilly, Procter have also had many purchases.
Bank of America and JP Morgan have had very strong selling imbalances.