The View from 5th Avenue

The View at Two – 24 September 2020

Fasten Your Seatbelt.… From here on out (“on out” = the rest of 2020 at least) we are in for a bumpy ride --- ok, maybe the roller coaster started some time ago. Either way, today has been further proof that this year will go down swinging. Nothing we didn’t already know was revealed – more of the same pandemic and president-related concerns—yet, markets bobbed up and down over the course of the morning then ramped back up to break +1%. That said, this month has pulled the S&P down more than 9% and though markets are well into the green now, it doesn’t feel very sturdy. In fact, the S&P entered correction territory early this morning, following jobless claims that did little to instill confidence in the economic recovery. The weak report underlined Fed Powell’s words yesterday that more needs to be done fiscally. Stocks were able to reverse course initially thanks to a record number of home purchases that proved just how much life has changed since the pandemic and then were fueled higher again by speculation surrounding the potential for stimulus talks to resume by Ms. Pelosi and Mr. Mnuchin. Tech stocks are outperforming the charge as per the usual, in conjunction with..oh hello banks (Jeffries had a record quarter and a broker recommended buying Goldman amid volatility this am). Only healthcare is on the opposite end, but doing little to cap any potential gains. One warning. According to strategists, it would be wise to keep an eye on QQQ’s into next week. If selling perks up again and the $270 level is taken out, the downside risk could be immense. It’s a very long way down.

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