Minor correction under resistance at 2761 points
# * What is happening on the market today? *
* Yesterday. * The market showed a slight decrease to the level of 2761 points, forming a local flat with a range of 2730-2800.
*Today*. Futures S&P 500 shows an attempt to grow below the level of 2800 points and testing the nearest strong resistance level of 2820 points.
* What is the market moving now? *
* Focus: health situation and government action. *
* Triggers: *
(1) Market participants awaiting the start of the reporting season.
(2) Optimistic that the coronavirus curve is aligned.
*What to expect?*
Given the movement of the futures, it will be important for the market to break through and maintain resistance by 2820 points, which will significantly increase the likelihood of a continuation of the recovery trend.
* Most of the sectors showed a correction, but it is worth highlighting the technological XLK which remained in the black. *
Technology Sector (XLK) 0.22%
Financial Sector (XLF) -3.64%
Utilities Sector (XLU) -3.17%
Energy Sector (XLE) -0.32%
Industrial Sector (XLI) -2.93%
Health Sector (XLV) -0.88%
Consumer Sector (XLP) -0.74%
Durable Goods Sector (XLY) -0.03%
Basic Materials Sector (XLB) -2.2%
# Stock News
(+) AMZN – Amazon will allow third-party sellers to send non-essential goods to an e-commerce company starting this week.
(+) AMZN – Canaccord Genuity raises Amazon’s target price from $ 2,500 to $ 2,600, citing skyrocketing prices for “essentials, food and cloud computing.”
(+) AMZN – Amazon has announced that it intends to hire another 75 thousand new employees.
(=) TSLA – In search of cost savings, Tesla turned to landlords to lower rents due to a pandemic.
(+) DIS – Disney enters into a new $ 5 billion loan agreement with Citi.
(=) JETS – The government has established identical conditions for industry players and declares that it will not conduct individual negotiations with airline executives.
(+) BABA – KeyBanc maintains a Buy rating on Alibaba and increases its target from $ 248 to $ 255.
(+) NFLX – Canaccord Genuity raised its target price to 450, based on expectations of a faster growth in the number of subscribers “due to an increase in demand for entertainment opportunities for the home.”
(+) PANW – Rosenblatt upgraded the Palo Alto rating from Neutral to Buy. Target increased from $ 5 to $ 225.
(-) AAPL – Raymond James lowers Apple’s bar from $ 360 to $ 305, citing lower global demand due to the closure of retail stores outside of China.
(-) MU – Goldman Sachs reduces Micron from Buy to Neutral with a target price of $ 49.
# Intermarket analysis
VIX continues to fall to level 40, approaching an important level of support.
Gold is consolidating at the highs at 1760, with attempts to go lower.
The yield on 10-year bonds showed a slight correction to the level of 0.758.
Oil continues to correct, testing important support at level 22.
Intermarket indicators reflected the dynamics of the market, and if VIX continues to fall and breaks support at the level of 39-38, further market growth is possible.
# Market topics
* The strategist who warned investors, before the start of the correction, now sees the possibility of buying. *
– John Stoltzfus from Oppenheimer Asset Management plans to add shares to his portfolio this season of earnings – about two months after warning investors that the consequences of coronavirus can not be avoided.
“This will show us the winners and losers in the sectors – companies that may be able to better survive this,” the firm’s chief investment strategist told CNBC.
“Now he believes that the bull market is somewhere close, and he is taking steps to capitalize on it.” His current list contains more than two dozen names.
“This is not a huge list, but a list of companies that we would like to add to the positions that we already have,” he said.
Stolzfus suggests that the utilities sector can help increase portfolios. This is the group that he actually avoided earlier this year.
“Stolzfus, who has been working on Wall Street for four decades, sees massive incentives and low interest rates as bullish effects on the market.