Dow Jumps 350 Points On Fiscal Hope; Coronavirus Stock Market Rally Focus On Trump-Biden Debate, Tesla And Shell

The U.S. stock market has reversed its losses on stimulus hopes. Throughout this morning, the Dow Jones Industrial Average futures traded in negative territory. Steven Mnuchin, the U.S. Treasury Secretary, said that lawmakers would give serious thought to further stimulus help.

Presidential Debate: Trump Vs. Biden

The first presidential debate between Donald Trump and Joe Biden took place last night. It was an acrimonious, chaotic, and insulting debate.

The global stock market has become even more concerned following this debate, and investors are largely ignoring all other major fundamentals, such as the worsening coronavirus situation in Europe and strong economic numbers out of China.

The U.S. futures moved higher during the debate as investors saw Joe Biden displaying his strong position against Donald Trump, but the Dow Jones took a complete U-turn after the debate because investors believe that if Trump loses the election, the transition of power is not going to be smooth.

The presidential debate reinforced the market concerns that Trump isn’t going to accept his defeat that easily. This creates the biggest risk for not only the U.S. stock market rally, but we are seeing the global stock market take a nose-dive today.

Stock Market Today

Over in Asia, the stock market closed in negative territory. The Shanghai index declined by 0.20%. The Nikkei stock index also moved lower by 1.50%, while the Korean Kospi soared 0.86%. Hong Kong’s HSI Index increased by 1.02%. 

Coronavirus Update

The coronavirus situation continues to deteriorate over in Europe as new cases are surging. The total global number of Covid-19 cases is now above 33 million, and the virus has claimed nearly 1.006 million lives. The U.S. still remains the worst country in terms of coronavirus deaths and virus cases, while India holds the third position.

Dow Jones and S&P 500: Market Breadth

The Dow Jones’ market breadth took a beating yesterday. 63% of the Dow Jones stocks traded above their 200-day moving average yesterday.  

The S&P 500 stock breadth also lost more momentum. 57% of the shares traded above their 200-day moving average yesterday. This is a change of -6% from a day earlier.  

Dow Jones Today

The Dow Jones is trading higher by 350 points as investors are hopeful for more help from the fiscal side. Steven Mnuchin increased hopes for more stimulus help from the fiscal side by saying that he hopes there will be an agreement between the policymakers.

Traders and investors paid less attention to the ADP Non-Farm Employment change number. The forecast was for 650K, and the number came in at 749K.

This data sets the tone for the most important U.S. economic reading, the U.S. Jobs Report due on Friday. If we see an improvement in the ADP Employment number, it is likely to push the Dow Jones futures higher and may shift investors’ focus away from last night’s presidential debate.

Should You Buy Or Sell Stocks?  

The Dow Jones Industrial Average futures have failed to break above the 50-day simple moving average, a technical level that is considered influential among traders, on the daily time frame.

The Dow Jones is marching back towards the 100-day SMA, and the hope is that the Dow’s price will stay above this important level. If the Dow Jones’ price falls below the 100-day SMA, it could mean more sell-off for the coronavirus stock market rally.

The S&P 500 futures, the broader representation of the U.S. equity market, are also trading sharply lower. Traders are worried that the S&P 500 is also failing to show any sign of strength, but bulls are keeping their hopes alive as the S&P 500’s price is trading above the 100 and 200-day SMA on the daily time frame. 

Stocks To Watch: Tesla TSLA , Shell  

Tesla’s stock has taken some serious beatings over the past few weeks, and investors are waiting for some good news that can push the stock higher. This good news could be in the form of new vehicle deliveries, which the company is expected to announce in the coming days.

Shell has announced massive job cuts today. The company will cut 7,000 to 9,000 jobs by the end of 2022. The company expects to save $2.0B to $2.05B in annual costs by 2022.

Shell’s CEO believes that the company will end up with less than ten refineries as Shell continues to become more environmentally friendly. Due to the lower oil price, the company’s gross refining margins are massively squeezed. 

Stock Market Rally

The S&P 500 stock index closed modestly lower yesterday, and the index fell by 0.48%. The energy sector led the index lower, and 10 out of 11 sectors closed lower. 

The Dow index continued its losing streak yesterday, and the Dow stocks moved the index lower by 0.48%. Four stocks of the Dow Jones Index increased in value, and 26 shares of the Dow index moved lower. 

The NASDAQ composite, a tech-savvy index, declined 0.37% yesterday. 

S&P 500 Leaders and Laggards: Paycom Software, Apache

Paycom Software stock contributed the biggest gain, soaring 4.447%. Apache stock was the largest drag; it fell by 7.58%. The S&P 500 stock index is up 8.3% during this quarter.

Dow Jones Leaders and Laggards: Nike NKE , Travelers

Nike stock advance higher by 1.63%, and was the biggest mover for the Dow, while Travelers stock dropped 2.52%, the biggest drag.