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Photograph by Michael Nagle / Bloomberg
On Sunday night, the stock market is doing what it seems to do best these days: go sideways.
Dow Jones Industrial Average futures are up 90 points, while S&P 500 futures are up 8 points, and Nasdaq compound futures are up 0.4%.
Yes, those are gains, but not big, and there’s certainly nothing to get excited about, and they leave the S&P 500 and Dow stuck in the developed range since the market peaks in the near term on June 8.
Perhaps a small gain should count as a win considering the coronavirus news for the weekend. About 2.85 million Americans have contracted the disease, and the rate of increase is at least 30% in Florida, Arizona, Montana, Idaho, and South Carolina. Covid is far from content yet.
Which brings us back to the June 8 peak in the stock market. The S&P 500 is down just 3.2% since then, which seems like it shouldn’t be much of a problem. But the tone of the market has changed since then, Raymond James strategist Tavis McCourt writes, as defensive sectors have outperformed economically sensitive ones. It may be nothing, just the correction in time that many of us have been pleased to see (surely overcomes a quick drop).
But the lateral action could be signaling something else: that the improvement in economic data is slowing down and where it is established is still unknown. “One wonders if the market has moved from its ‘V’ shaped recovery phase to the search for a ‘new normal plateau,'” McCourt writes. “The economic data in real time could change radically depending on the spread of the virus and the fiscal response, which will likely be on the front page in July.”
You cannot have one without the other.
Write to Ben Levisohn at [email protected]
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