Daily Market Recap 8/23/2021
Stocks Surge on FDA Vaccine Full Approval
A higher open to start the week today got a second wind after the FDA granted Pfizer (PFE) and BioNTech's vaccine full approval midmorning. Stocks surged on the report and the NASDAQ and NASDAQ 100 pushed to new record highs. Rising Coronavirus cases over the weekend weighed on the US Dollar as investors assumed the Federal Reserve was less likely to begin to taper asset purchases in September. Economic data was better than expected with July Existing Home Sales rising +2% MoM. The weaker dollar helped boost commodity prices and crude oil prices soared +5.28% as the reopening trade gained momentum. The Energy (XLE) sector outperformed jumping +3.77%. Consumer Discretionary (XLY), Communication Services (XLC) and Technology (XLK), which posted an all-time, also outperformed. Defensive sectors Utilities (XLU), REITs (XLRE) an d Consumer Staples (XLP) ended the session lower. The DJIA kicked off the week with a gain of 215.63 points (+0.61%) and finished at 35335.71, while the S&P 500 briefly traded in record territory adding 4479.53 points (+0.85%) closing at 4479.53. The NASDAQ jumped 227.99 points (+1.55%), its best gain since 7/20/21, and settled at 14942.65. The small cap Russell 2000 rose +1.88%.
Breadth was positive with advancing issues beating declining issues better than 2:1 on the NYSE and almost 3:1 on the NASDAQ. Advancing volume was 78% on the NYSE and 86% of the NASDAQ. The VIX dropped 1.41 (-7.60%) and closed at 17.15. Crude oil prices snapped a seven-day losing streak gaining 3.28 (+5.28%) and the October contract closed at $65.41 a barrel. Gold prices increased 23.00 (+1.29%) and finished at $1807.00 an ounce. Bitcoin (BTC) traded above $50k but ended the session at $49.500.
Market participants celebrated the FDA's full approval of Pfizer's vaccine hoping that we'll see an uptick in the number of vaccinated people. This also opens the door for businesses to mandate workers to get the vaccine or not come back to work. It also will enable casinos, airlines, hotels and recreational and leisure companies to get back to reopening protocols that will keep the doors open. If there is a fly in the ointment, volume was summer light. With Wall Street mostly on summer break let's see if we can get some follow through to the upside. There's still work to be done to clear key moving average resistance levels on the DJ Transportation Index and small cap Russell 2000. It's still a great start to the week and we should see the DJIA and S&P 500 punch new highs as early as tomorrow.
Earnings releases to watch for on Tuesday include: Advance Auto Parts (AAP), Best Buy Co (BBY), HEICO Corp (HEI), Intuit Inc (INTU), Medtronic (MDT), Nordstrom Inc (JWN), Toll Brothers (TOL) and Urban Outfitters (URBN).
Tuesday's Market Moving Economic Calendar: New Home Sales.
Significant Numbers To Watch
33741-Support - The 07/19/2021 low
35631-Resistance - The 08/16/2021 high
34725-50-day simple moving average
32620-200-day simple moving average
4233-Support - the 07/19/2021 low
4480-Resistance - 08/16/2021 high
4352-50-day simple moving average
4015-200-day simple moving average
14178-Support - the 07/19/2021 low
14896-Resistance - the 08/05/2021 high
14561-50-day simple moving average
13534-200-day simple moving average