Enthusiasm for potential treatments for COVID-19 continued to boost stocks in this brand-new bull market.
The major indices were helped Monday by an Emergency Use Authorization from the Food and Drug Administration to use antibody-rich plasma from recovered COVID patients to treat serious cases in new patients – despite thin evidence so far of its efficacy.
Financial Times (paywall) also reported on Sunday that "the Trump administration is considering bypassing normal US regulatory standards to fast-track an experimental coronavirus vaccine from the UK for use in America ahead of the presidential election, according to three people briefed on the plan," but AstraZeneca (AZN) denied that report.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The S&P 500 (+1.0% to 3,431) and Nasdaq Composite (+0.6% to 11,379) both set record closing highs, and the small-cap Russell 2000 gained 1% to 1,568. The Dow Jones Industrial Average was the strongest of the major indices, gaining 1.4% to close at 28,308; it remains about 4% below its Feb. 12 all-time closing high.
Looking ahead: Dollar General (DG), Nordstrom (JWN) and Williams-Sonoma (WSM) are among the companies to watch out for in a retail-heavy earnings slate.
The Market's Heavy Tilt Continues
They say a rising tide lifts all boats, but that hasn't been precisely accurate this time around.
Despite Monday's "rotation" day that saw more cyclical sectors take the lead, technology (and tech-related) stocks with mega market values have done most of the lifting in boosting the major indices to record highs, even as many other stocks have delivered dismal returns.
"'Big tech' (how they’re generically compartmentalized) has been a powerful force. Rightly so, the dominance of the five largest stocks in the S&P 500 have received much investor attention (and buying pressure)," writes Liz Ann Sonders, Senior Vice President and Chief Investment Strategist at Charles Schwab, in recent market commentary. "In equal-weighted terms, they represent 1% of the S&P 500; but in cap-weighted terms, they now represent nearly their own quartile."
"That said, it would be in keeping with history for at least some short-term consolidation – which could simply take the form of a rotation away from the concentrated leadership areas vs. something more sinister. Most historical studies of similar periods of concentration show a tendency for flat-to-lower stock prices short-term; but higher prices longer-term."
That shouldn't put longer-term investors off the tried-and-true formula of buying cheap, market-tracking exchange-traded funds, but it's understandable if even generally conservative investors want to be a bit more tactical with their approach. Stock picking is back in fashion because of stark disparities in individual share performance this year. Individual asset classes and market sectors are leaving others behind in the pandemic's new normal.
One way to build a nimble but diversified portfolio aimed at weighting current winners over laggards is to gather up a variety of low-cost ETFs. Read on to discover Kiplinger's 20 favorite cheap ETFs that cover various facets of the market.
-
Take Charge of Retirement Spending With This Simple StrategyTo make sure you're in control of retirement spending, rather than the other way around, allocate funds to just three purposes: income, protection and legacy.
-
Here's How To Get Organized And Work For YourselfWhether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
-
Fed Sees Fewer Rate Cuts in 2025: What the Experts Are SayingFederal Reserve The Federal Reserve cut interest rates as expected, but the future path of borrowing costs became more opaque.
-
Why Is Warren Buffett Selling So Much Stock?Berkshire Hathaway is dumping equities, hoarding cash and making market participants nervous.
-
Fed Cuts Rates Again: What the Experts Are Saying
Federal Reserve The central bank continued to ease, but a new administration in Washington clouds the outlook for future policy moves.
-
If You'd Put $1,000 Into Google Stock 20 Years Ago, Here's What You'd Have TodayGoogle parent Alphabet has been a market-beating machine for ages.
-
Fed Goes Big With First Rate Cut: What the Experts Are Saying
Federal Reserve A slowing labor market prompted the Fed to start with a jumbo-sized reduction to borrowing costs.
-
Stock Market Today: Stocks Retreat Ahead of Nvidia EarningsMarkets lost ground on light volume Wednesday as traders keyed on AI bellwether Nvidia earnings after the close.
-
Stock Market Today: Stocks Edge Higher With Nvidia Earnings in FocusNvidia stock gained ground ahead of tomorrow's after-the-close earnings event, while Super Micro Computer got hit by a short seller report.
-
Stock Market Today: Dow Hits New Record Closing HighThe Nasdaq Composite and S&P 500 finished in the red as semiconductor stocks struggled.
