Week-In-Review: Nasdaq Continues To Soar Ahead Of Earnings Season
The tale of two tapes has returned in 2020 as tech stocks (mainly Nasdaq/Nasdaq 100 names) continue to soar as the rest of the market is edging higher. Whenever the market becomes this concentrated it becomes a market of stocks and not a stock market. Meaning, if you own the leaders (like we do) you are doing great, if not, it’s not fun. The fact that the market refuses to fall (even as the curve is no longer flat and the number of new cases is moving in the wrong direction) is very bullish and bodes well as we enter earnings season over the next few weeks.
Thursday & Friday Action:
Stocks ended mixed on Thursday led by the Nasdaq which vaulted to another fresh record high. Continuing claims slid by more than 18 million which signaled that many laid-off and furloughed employees are getting back to their jobs despite the ongoing pandemic. Stocks rallied nicely on Friday as traders waited for earnings season to kick off in earnest next week.
Market Outlook: Flood The System With Liquidity
Global governments and global central banks stepped in with massive rate cuts and other “aid” packages to help “stimulate” both Main Street and Wall Street. So far, it is working as intended. As long as March’s lows hold, the market will likely move sideways to higher. On the other hand, if March’s lows are breached, then look out below. As always, keep your losses small and never argue with the tape.