Last Friday, market indexes bounced back strongly from a fourth-straight week in the doldrums, pushing the Nasdaq into positive territory for the week. European markets have followed suit this early morning, staging a comeback of their own on bargain shopping; the Stoxx Europe 600 had fallen 3.6% last week, but have traded up 2.2% so far this Monday. At this hour, the Dow is up 367 points, the Nasdaq +205 and the S&P 500 +46.
Economic data will be extensive by the end of this week — Advance Trade, Case-Shiller, Consumer Confidence, ADP private-sector payrolls, Q2 GDP revision, Jobless Claims, Personal Income/Consumer Spending, Manufacturing and Construction spending and non-farm payrolls will all color in the pages leading up to the heart of Q3 earnings season — but today we’re starting out with a blank slate. Clearly, the market is in a buying mood; it does not look like anything economic is going to bring this party to an end today.
That’s not the same thing as a “risk-free” environment, of course: the Covid-19 pandemic continues to feed on the American populace, with even New York State crossing back over the 1000-case threshold per day for the first time in months, bringing into focus the “second wave” infectious disease scientists had warned about. We are also five weeks away from the U.S. General Election, with much at stake for both sides of the aisle — as well as all Americans, and indeed all global citizens, to an extent.
At very least, we can expect some static and distractions work their way into market sentiment over the coming weeks. And there are no guarantees the political environment will simmer down immediately following the results of November 3rd.
The biggest damage seen in this September swoon comes from the equities formerly known as FANG — Facebook (FB - Free Report) , Apple (AAPL - Free Report) , Netflix (NFLX - Free Report) and Google (GOOGL - Free Report) — and all four of these stocks are up between 1-4% in pre-market activity. Cheaper multiples (though still not “cheap” overall) and attractive price-points are helping persuade investors to buy back into Big Tech. Should Q3 earnings season provide the bounce-back analysts are expecting, especially with these stocks, this could be a very good move for market buyers at this stage.