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Stocks Finish Lower, But Remain Near Record Highs
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Stocks gave up their gains in the last hour of trading yesterday with all of the major indexes finishing in the red.
But I wouldn't read too much into it. The Dow just came off of a 7-day winning streak. Same for the S&P. And the Nasdaq wrapped up a 7-day winning streak three days earlier after closing at all-time highs. And they're still up more than 20% for the year.
News reports in the morning that Russia had cleared a vaccine for use in their country lifted stocks early on. Although, with all of the skepticism surrounding such an announcement, it was hard to believe that such a report would have any market-moving legs.
Although, stocks seemed to turn around after it was revealed that no progress was made on the coronavirus relief negotiations between the White House and Congress. Some expressed optimism on Monday that something could get done this week. But after talks were said to be at a stalemate yesterday, that optimism seemed to disappear. But the week is not over, so we shall see.
In the meantime, it's said that the executive orders, specifically the enhanced unemployment checks, could start going out in the next two weeks.
In other news, reports that the 7-day average count of new coronavirus cases is below the 14-day average indicates a slowdown of new cases. In fact, only 13 states had a 7-day average higher than the 14-day average. That means new cases are slowing in the majority of the country. That doesn't diminish the seriousness of the case count. Indeed, more new cases are popping up every day. And still rising in some big areas. But it could be an indication that the rate of new cases just might be cresting.
We'll get more earnings today (428), and as many as 782 for the rest of the week.
And we'll get more economic reports with MBA Mortgage Applications, the Atlanta Fed Business Inflation Expectations report, and the Consumer Price Index.
The economy, in spite of the bumpy opening, appears to be getting better and better with each passing day.
And because of that, it looks like stocks have a lot more upside to go.
See you tomorrow,
Kevin Matras
Executive Vice President, Zacks Investment Research
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