October 12 through October 15, 2020
Euro Trader P. M4
Emerging Markets P. M4
Striking Price P. M5
Commodities P. M6
Inside Scoop P. M7
13D Filings P. M7
Power Play P. M7
Charting the Market P. M8
Winners & Losers P. M9
Research Reports P. M10
Market View P. M11
Statistics P. M12
28,606.31
52-wk:+6.86%YTD:+0.24%Wkly:+0.07%
Dow Jones Industrials
3483.81
S&P 500
52-wk:+16.66%YTD:+7.83%Wkly:+0.19%
11,671.56
Nasdaq Composite
52-wk:+44.28%YTD:+30.08%Wkly:+0.79%
1633.80
Russell 2000
52-wk:+6.40%YTD:-2.08%Wkly:-0.23%
4%
-2
-3
-1
0
1
2
3
Monday Tuesday Wednesday Thursday Close
Source: Barron’s StatisticsFriday
MARKET PERFORMANCE DASHBOARD
Tech Rally
The Nasdaq Composite jumped 2.6%
MondayonagooddayforBigTech
stocks.Applegained6.4%,and
Amazon.com added 4.8%.
TrialbyFire
Third-quarter earnings season kicked off
on Tuesday. Stocks fell after Johnson &
Johnson and Eli Lilly paused their Covid-19
vaccine and treatment trials.
Small for the Win
OnThursday,foronlythesixthtimesince1986,
the Russell 2000 rose more than 1% while
theNasdaq,DowJonesIndustrialAverage,
andS&P500allfell.
Closing Strong
Stocks rose on Friday to break
a three-day losing streak.
Bolstered by Monday’s rally,
it gave major indexes their third
straight week of gains.
THE TRADER
The Bad-
News Bulls
and the
Rotation
Playbook
I
f the world feels more mixed
up than usual, take comfort in
the fact that the stock market
is reflecting that confusion—
and holding up just fine.
It may not have looked like
that on the surface. The Nas-
daq Composite gained 0.8%, to
11,671.56, this past week, while the
S&P 500 index rose 0.2%, to 3483.81,
and the Dow Jones Industrial Average
advanced 0.1%, to 28,606.31.
That the market finished the week
higher was impressive considering the
news. There was a spike in Covid-19
cases in the U.S. and abroad; two
Covid-19 trials,Johnson & Johnson
(ticker: JNJ) for a vaccine andEli
Lilly’s (LLY) for a treatment, were
paused for safety reasons; jobless
claims unexpectedly shot higher; an-
other stimulus plan remains elusive;
and there’s an election that’s less than
three weeks away.
Any of those on its own could have
been a reason to sell, and yet the mar-
ket held up. “The market is in a bull-
ish mood and wants to stay that way,”
says Dave Donabedian, chief invest-
ment officer at CIBC Private Wealth
Management.
Still, the week wasn’t as clear-cut
as the gains—what there was of
them—suggest. On Monday and Tues-
day, the Nasdaq outperformed the
Dow by 2.2 percentage points, as in-
vestors scooped up tech stocks and
shunned more economically sensitive
fare. Then they pivoted back to cycli-
cal stocks, as the Dow outperformed
the Nasdaq by 1.4 points over the last
three days of the week, suggesting a
rotation back into cheaper stocks and
away from expensive growth.
There were even rotations within
rotations. On Wednesday, theEnergy
Select Sector SPDRexchange-traded
fund (XLE) gained as much as 2.8%
before finishing the day just 0.4%
higher, while theTechnology Select
Sector SPDRETF (XLK) dropped as
much as 1.3% but finished off just
0.4%. By all appearances, investors
can’t decide what they want to buy
and what they want to sell.
Normally, this kind of indecisive-
ness would portend an unhappy end-
ing—it did for Hamlet, at least. But for
the stock market, it might actually be
good news. That’s because investors
By Ben Levisohn
MARKET WEEK