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“Cash combined with courage in a time of crisis is priceless.” – Warren Buffett
It’s not often anymore that you can say the Congress passed a bill on a bipartisan basis, but that’s what happened last night as the House passed a spending bill to keep the government open through December 11th. The way things are going, one couldn’t be faulted for asking if we’d all be better off if they did close, but we already have enough to debate.
US futures are mixed this morning as the DJIA futures lead the way on the back of Nike’s (NKE) strong earnings report after the close last night. With the stock up over 15% in the pre-market, NKE is on pace for its most positive reaction to earnings in at least 20 years. While DJIA futures trade higher, both the S&P 500 and Nasdaq are indicated to open flat to slightly lower.
Over in Europe, equities have reacted positively to some stronger than expected flash manufacturing PMIs in the region. However, while the manufacturing sector shows strength, the flash PMIs for the services sector generally missed expectations. Looking ahead to today, US flash PMIs for both the Manufacturing and Services sectors will be released at 9:45 eastern, and there’s a heavy dose of Fedspeak kicking off at 9 AM and going on through the entire day.
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.
While growth has been the overall leader YTD, we’re starting to see an epic tug of war between growth and value investors. After a record eleven straight months of the Russell 1000 Growth index outperforming the Russell 1000 Value index, through last Friday, the value index was outperforming growth in September by the widest margin since March 2001. Just when it looked like value investors were going to go on a run, though, growth has come roaring back this week. Over the last two days, the Russell 1000 Growth index is outperforming Value by over 3.6 percentage points. So far this year, there have only been two other periods with a wider performance spread over a two-day period, and before this year the last time there was a wider spread was in October 2008.
The chart below shows the rolling two-day performance spread between the Russell 1000 Value and Growth indices. Since 1995, there have been three distinct periods where the performance spread widened out to extreme levels – the late 1990s/early 2000s, the Financial Crisis, and now.