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“Behind every stock is a company. Find out what it’s doing.” – Peter Lynch

Sundays may be for “Meet the Press”, but if its Monday, it’s a market rally.  US futures are following the rest of the world higher this morning with all the major averages looking at gains of nearly 1% at the open.  European equities are even stronger with most benchmarks trading up over 2%. Breadth, which has been a nagging issue in the US over the last couple of weeks, is strong in Europe with advancing stocks outnumbering decliners by more than 9-1.

News driving stocks higher today is mostly due to hopes of a fast-tracked vaccine by as soon as Election Day.  The economic calendar is quiet to kick off the week.  The only US data point is the Chicago Fed National Activity Index which came in well below forecasts.  Economists were expecting a headline reading of 3.70 for July, but the actual reading came in at just 1.18.  We would note, though, that June’s reading was revised sharply higher (from 4.11 up to 5.33).

Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, market performance in the US and Europe, trends related to the COVID-19 outbreak, and much more.


In this “Monday rally” for US equities, the Nasdaq 100 is on pace to open up roughly 1%.  A gain of that magnitude is right in line with what has become the norm over the last several weeks as the index has traded higher by at least 1% on eight of the last ten Mondays.  The only exceptions were on 7/13 (-2.2%) and 8/10 (-0.55%).  A 1%+ gain today would make it nine of eleven.

Given all the focus on narrowing breadth in the market lately, we wanted to see if that trend was evident during these Monday rallies as well.  The chart below shows the number of advancing issues in the Nasdaq 100 on each of the days listed above.  For the eight Mondays days in the last ten weeks where the Nasdaq 100 rallied more than 1%, the average number of advancing issues per day was 78.5, but each of the last two saw daily readings of just 72.  Additionally, the last two occurrences rank as tied for the second weakest of the eight prior days.  Based on these two factors, it’s certainly valid to say that breadth has been narrower more recently.  At this point, though, it’s hardly a glaring divergence, and unless we were already looking for signs of narrow breadth in this relationship, it probably wouldn’t have stuck out.

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