Stimulus Headlines Create Chop as Morning Strength Gives Way to a Weak Close - Chaikin Analytics

Stimulus Headlines Create Chop as Morning Strength Gives Way to a Weak Close

US equities finished lower Monday, after fading late in the session. All sectors closed in the red but Utilities outperformed while Energy was the worst of the bunch. Treasuries were mostly weaker with the curve steepening. Dollar weakened vs euro and sterling while gaining vs the yen. Gold finished up 0.3%. WTI Crude finished down 0.1%.

  • Outperformers: Utilities (0.85%), Materials (1.19%), Industrials (1.24%), Consumer Spls. (1.34%), REITs (1.54%), Consumer Disc. (1.57%), Financials (1.58%)
  • Underperformers: Energy (2.10%), Tech (1.88%), Communication Svcs. (1.87%), Healthcare (1.64%)

S&P futures are up 0.6% after Asian equities were mixed overnight with China outperforming while Japan and Taiwan declined. European markets are mostly higher. Treasuries are mostly weaker with more curve steepening. The dollar is stronger vs yen but weaker vs the euro and sterling. Gold is down 0.3%. WTI Crude is down 0.4%.

Long Bonds as a Tell For the High Fliers

The long bond remains under pressure after breaking near-term support in late-September. The iShares 20+ Year Treasury Bond ETF has a Very Bearish Rating as it trades below the declining long-term trend line. This is an important development because as it falls, yields rise which could have a negative impact on the high-flying speculative growth stocks. Investors who are chasing the high multiple momentum names would be well-served to keep this chart front and center.  

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