Back on Your Feet…. It’s not quite a Turnaround Tuesday, but US stocks are holding their own in the aftermath of yesterday’s bout of repositioning. A full slate of earnings and some M&A developments have provided a handy distraction for investors with only a week until the election and stimulus still a question mark, though trading has been choppy and the S&P hasn’t strayed too far from its flatline in either direction. It’s not surprising the buy-the-dip crew is sitting tight for the most part given the timing, but it remains to be seen if the mega-cap earnings ahead force investors off the sidelines. Already the big guys (AMZN +2.1%, FB +2.3%, AAPL +1.1%) are showing some subtle signs of FOMO today as NYFANG+ makes a new relative high vs SPX (chart below) and with MSFT (+1.9%) set to dish after the bell (why did they have to spoil the perfect 5/5 FAAMG lineup on Thursday?). After all, yesterday’s SAP blowup was a reminder of 2 things: 1) There is no alternative to the US, and 2) Covid isn’t going anywhere… So it’s easy to see why some are convinced the winners will keep on winning (notice PTON +2.3%, ZM +1.4%, DOCU +1.2%)
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