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Market Enters September With Strong Momentum

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Market indexes enter a new month follow 7%+ gains on all three major indexes for the month of August — an extraordinary accomplishment for such a typically sleepy summer trading period. Especially considering some analysts saw a train wreck on the horizon in late July, with the CARES Act expiring and no relief package coming to millions of newly unemployed Americans. The Fed flooding the economy with dollar bills has helped keep markets buoyant and bullish investors on the charge.

Two important reads on domestic goods-producing hit the tape after today’s opening bell: ISM Manufacturing and IHS Markit Manufacturing PMI, both for the month of August. These numbers have rebounded admirably since the all-time worst month registered in April, which brought reads of +29.4% and 36.1%, respectively. For July, ISM Manufacturing came in at 54.2% and the Markit figure was 53.6%. Both are expected to grow moderately from these levels for August.

Also, Construction Spending for the month of July comes out later this morning, as well. Though we’re looking a bit deeper into the rearview mirror here, it’s important to see how building had progressed through the heart of the summer. As such, we expect a swing to the positive for the first time since February (pre-pandemic) from June’s -0.7% to a positive 1.0%. Plenty of pent-up demand, combined with historically low interest rates may have helped kick-start Construction to levels we haven’t consistently seen in close to a full year.

Ahead of today’s regular trading session, the Nasdaq is racing ahead of the Dow and S&P 500, both of which hover around unched at this hour, up 100 points. The tech-strong index is being bolstered once again by Tesla (TSLA - Free Report) , up 1%, and Apple (AAPL - Free Report) , +2%. This is despite Tesla’s announcement of a $5 billion future share offering this morning. Apple, for its part, is now reportedly worth more than the entire Russell 2000 small-cap index, with a market capitalization of a mind-blowing $2.26 trillion. Also, Zoom Video (ZM - Free Report) celebrates its blowout Q2 earnings yesterday with gains of 39% pre-market.

Will September keep the rally going? Normally, we’d suggest this may be dependent on economic data and news reports out of Washington DC, roughly two months before the General Election. But if 2020 has taught us anything to this point, it’s anything but a “normal” year.

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