June 16, 2020, 8:40 pm EDT
Retailers, Jobs and Fed Cheerleader
Stock markets kept another strong finish with +526 points in DJIA and +2% gain for all major indexes. There are three factors that contributed to this short-term rally for the third day after the 06/11 gap-down.
- Record retailer sales of +17.7% increase in May
- Optimistic view on more business opening throughout the US that brings back jobs as seen last week 2.5 million jobs increase
- The most important part is Fed Chairman Jerome Powell buying into corporate bonds last week. It gave markets confidence that the Fed will use its power to save or boost the stock markets for period of time
Semiconductor, software, pharmaceuticals, home builder, retailer, heavy equipment were up to reflect optimism based on factors mentioned.
However, it is equally important to check on low volume rebound trades in the past three days. Also, the gap-down zone is not filled yet. Technically, stock markets are still on the bearish side.
In summary, observing leading stocks in Nasdaq and watching the gap as a way to gauge whether the stock markets have more power to make a new high or giving up again to resume the downtrend.