The world looks quite a bit different than it did at the beginning of last year, and we hope that we are on the verge of entering into a brighter period. Successful vaccines should lead to the end of social distancing and a return to normalcy.
US Equity Markets in Q1: The S&P 500 increased by +6.2% in the first quarter. The market reached another new all-time high on March 26th when the S&P closed at 3,975. After declining by nearly -34% during the pandemic selloff last year (2/19/20 to 3/23/20), the S&P 500 is up by over +80% from the low.
Our system generated multiple day trading alerts this quarter.
(more…)Global equities gained in Q4 as a number of vaccine breakthroughs fostered hopes of a return to economic normality. Government bond performance was mixed, with US yields rising (meaning prices fell). Corporate bonds gained ground. Commodities gained on vaccine news and a weaker US dollar.
US equities gained over the quarter, with November especially strong due to the vaccine news. The developments eclipsed Joe Biden’s win in the US presidential election, as well as a $900 billion stimulus package announced in late December. The Federal Reserve nonetheless reinforced its supportive message, stating it will continue with current levels of quantitative easing. Economically sensitive sectors made the strongest gains, with more defensive sectors making more modest progress.
(more…)After a devastating 1st quarter for stocks and risk assets, followed by a 2nd quarter recovery on the back of heavy monetary and fiscal stimulus, it had already been a rather wild ride for the first half of 2020. The 3rd quarter brought continued recovery at a more moderate pace, as most major indexes posted gains for the quarter.
In the U.S., the S&P 500 index gained 8.93% for the quarter. Large tech stocks drove the S&P 500 movements, surging through August before selling off in September. The VIX, a widely-used stock volatility gauge, was at extreme levels around 4x its long-term average at the onset of the Covid-19 stock selloff in March & April. It has gradually trended downward through the 2nd and 3rd quarters, but still ended Q3 about 30% higher than its long-term average.
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At a Glance: The first half of 2020 was a tale of two markets. 1Q20 culminated in the fastest peak to bear market in S&P 500 history, as volatility spiked to unprecedented levels and the coronavirus pandemic spread like wildfire. 2Q20, however, proved the best quarter in over twenty years. Aggressive stimulus & policy, vaccine/therapeutics optimism, and a fasterthan-expected bottoming/rebound in some economic data contributed to the strong performance. Growth shares outpaced Value, while Technology, Consumer Discretionary, and Energy fared best among sectors.
Despite the strong stock market performance, the state of the economy remains mixed at best. Unemployment has been in the double digits (though declining) for three straight months, and the economy shed roughly ~13 million jobs over Q2. Unemployment insurance claims have flattened out, but at a concerning level. Still, several data points indicate a more V-shaped recovery. Manufacturing and service PMI data have rebounded strongly, while the housing market has remained shockingly resilient. All eyes remain on Washington, as an anticipated fifth coronavirus stimulus bill will be key to the continued recovery, particularly given the dire employment situation.
Full list of Day Trading Alerts produced by our system in Q2 2020:
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