The market continues to stay very sticky to the upside and is now celebrating reports that President Trump has approved the outline of a revised stimulus package. The negotiations are ongoing but it is clear the Trump wants a deal and is prepared to offer additional concessions to get one. Indices are at day highs on the reports.
There has been strong underlying support and aggressive dip buying all day. Breadth is strong with around 4300 gainers to 3000 decliners. The number of new 12-month highs has expanded to over 430 which illustrates the continued momentum.
Under the surface there is some rotational action with the Russell 2000 ETF (IWM) small-caps cooling off a little while money rotates into big cap Nasdaq names. The Nasdaq is up 1% while IWM is close to flat with a gain of 0.1%.
One interesting name on my screens today is Dada Nexus (DADA) which has been in a wide trading range since July and is now perking up on volume. Walmart (WMT) owns a more than 10% stake in the China-based platform for ordering groceries and delivery services. The company had an 88% increase in revenue in the second quarter.
Some market players will be looking for a 'sell the news' reaction to a stimulus deal but I don't expect that to gain much traction. News of this sort creates more 'fear of missing out' and that is what helps to provide strong support. There is some frothy action out there but that is being overcome by the strong momentum.