Investors continued to engorge themselves on equities, sending markets to another massive day of gains as the election uncertainty has not curbed their appetite one bit. Unlike yesterday, today's gains were broad-based across asset classes (except for pharma stocks) as the DJIA and S&P 500 closed in on break-even levels for the year. The Nasdaq continued its ascension as everything from semiconductors to cannabis stocks sprinted higher.
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Investors seem to be settling into the reality of a split Congress that will be in place for a few more years and ultra-low interest rates with the Federal Reserve's support. They were reminded of that today when the Federal Open Market Committee (FOMC) left interest rates unchanged, pledged to expand its bond-buying program, and leaned on Congress to pass more fiscal support as soon as possible.
Outside of the capital markets, the economic rebound has lost some steam. The Fed said as much, but we can see it in the economic data we have been getting over the past couple of weeks. Unemployment is still the sore thumb, and we were reminded of how much it hurts when 750,000 Americans filed for first-time unemployment claims last week. That many layoffs this far into the recovery tells us how uneven the recovery is at this stage.
But investors weren't hearing any of it and have had their earmuffs on all week. It was the S&P 500's fourth consecutive day of 1% or more gains. The last time that happened was in Oct. 1982.
Chips and Cannabis
Someone woke up cannabis investors to remind them that a handful of new states just legalized recreational marijuana. They slept through the news yesterday — or maybe they were just waiting on more definitive news on the election — but today they fired up their portfolios and started buying. The ETFMG Alternative Harvest ETF (MJ) jumped 10% today and is up 13.6% in the past five sessions.
Chip stocks have also been high-flyers this week, and the SOXX ETF surged again today, continuing a multi-day trend. Qualcomm's big earnings beat may have set the table, but technology stocks in general have been the flavor of the week.
As mentioned, nearly all sectors posted gains today, especially those that have done well over the past four years. And with the playbook looking very similar for the next four, investors are loading back up on their favorite stocks and ETFs.
It wasn't hard to find stocks hitting all-time highs today. There were 177 of them across the Russell 1000 and many more hitting 52-week highs. What's interesting about today's record-breakers is that they come from all over the market.
- Best Buy (BBY): Another all-time high for the big box retailer that successfully pivoted online in the depths of the pandemic and sold a lot of TVs.
- Costco(COST): Another record high for the retailer, which has been an essential business for Americans throughout the crisis.
- CSX (CSX): Nobody loves railroad stocks hitting record highs more than me. It's not because I own them — I don't. I just love seeing transport stocks win because they are the real canaries in the recovery coal mine.
- Alphabet (GOOGL): What antitrust lawsuit? Do investors think that will go away if Biden wins the White House? Better check his top donors list.
- Qualcomm(QCOM): Great earnings and strong future guidance helps, but chipmakers are on everyone's buy list these days. Many of Qualcomm's competitors also hit record highs today.
- Ferrari (RACE): I wasn't expecting this one, but the high-net-worth set has done very well through this pandemic and may feel that they need some hot wheels to blow off some steam.
What Have You Been Reading All Week?
The wild swings of uncertainty leading up to the presidential election drove our millions of readers to research personal finance topics related to the various potential outcomes as well as some very interesting political topics.
We charted the waxing and waning interest of these spiking articles in the week leading up to Election Day and marked when that interest peaked. In the chart above, you can see how reader interest in those topics spiked and when. Check out the full article to see where in the U.S. those topics were of most interest.