Market Recap
US Markets:
For the first time in three days, markets fell after a furious rally following the release of encouraging vaccine data from Pfizer and BioNTech last week, and Moderna yesterday.
The Dow Jones dropped 166.49 points, or .56%, after closing at a record high yesterday. The S&P 500 also closed at an all-time high yesterday, and dropped .48%. The Nasdaq also fell 0.21%.
Also weighing on the markets was disappointing data showing that retail sales increased less than expected in October. Retail sales rose 0.3% versus the expected 0.5%.
Cryptocurrency:
Cryptocurrencies surged today with Bitcoin rising by over $1000 from yesterday to $17,646 today. For the first time in 3 years, Bitcoin surged above the $17,000 mark. This is a level not seen since early-January 2018. Since the beginning of the year, Bitcoin’s value has more than doubled. With coronavirus stimulus measures, validation from public companies such as Square and Paypal, and interest from major investors, the case for Bitcoin has arguably never been this bullish before. Bitcoin continues its rally towards $20,000 as many expect the cryptocurrency to consolidate before December. Cryptos across the board were in the green today, led by Ethereum gaining over 3.25% and Chainlink advancing another 4.19%.
Overall Market:
Although European equities began the day in the red, they cut early losses to close mixed after hitting over eight-month highs yesterday. The DAX 30 closed 0.1% lower at 13,130, the FTSE 100 and IBEX 35 closed slightly down, and the CAC 40 and FTSE MIB closed slightly up. Hungary and Poland said that they would veto the €750 billion coronavirus stimulus package which weighed on European market sentiment. Canada’s TSX rallied to a 37-week high of 16,929 in afternoon trading on Tuesday, amidst hopeful sentiment for a faster economic recovery. Wholesale trade in Canada grew for a fifth month in September, and remained above February’s pre-pandemic levels for the third month. This also beat market expectations.
Although COVID continues to surge to unprecedented levels in the US forcing cities and states to impose shut down measures again, not all the data released was bad today. US homebuilder sentiment climbed to a new record, increasing to an all-time high of 90 in November 2020 from 85 in the previous month, and above the market’s forecast of 85. Record-low mortgage rates and higher demand for suburban houses has buoyed this figure. US industrial production also rose 1.1% from a month earlier in October 2020, rebounding from a revised 0.4% drop in September and slightly beating market expectations of 1.0%. The index has recovered almost all of its 16.5% decline from February to April, however output in October was still 5.6% lower than pre-pandemic levels.
WHATS UP
Pharmacy stocks led the declines today after Amazon launched their pharmacy business allowing free delivery of medications for Prime members. CVS Health dropped 8.6% while Walgreens plunged 9.6%.
Home Depot and Walmart also declined, despite both posting impressive earnings reports. Home Depot fell 2.5% despite beating earnings estimates and seeing sales surge by about 24% compared to a year ago. Walmart also fell 2% despite witnessing a 79% growth in e-commerce and posting better-than-expected earnings results.
Tesla was the outlier today and jumped 8.2% after it was announced that the electric car manufacturer would join the S&P 500 index, effective Dec. 21. This move has been long overdue, as the stock is now the most valuable automaker in the world in terms of market cap, and has quadrupled in 2020.
Source: CNBC, TradingEconomics, Yahoo! Finance
