ECB’s QE Program Boosting Triggers A Rally In Commodities

ECB QE Program

Commenting on the ECB boosting its QE Program and today’s trading, Gorilla Trades strategist Ken Berman said:

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ECB Boosts Its QE Program

The major indices are mixed and flat at midday despite yesterday’s broad selloff and a bearish overnight session, as stocks bounced in early trading. The European Central Bank (ECB) held its monetary meeting this morning and, in line with the latest rumors, it boosted its quantitative easing (QE) program by roughly $620 billion, triggering a rally in growth-sensitive commodities. All eyes will be on the FDA this afternoon, which is expected to approve Pfizer‘s (PFE, +0.2%) vaccine candidate for emergency use, and a positive decision could give another boost to reopening stocks and risk assets, in general.

In economic news, new jobless claims came in at 835,000, surging higher by the most in nine months as the new containment measures took their toll. The numbers of continuing claims dropped yet again and on another positive note, the Consumer Price Index (CPI) and the core CPI were both higher than the consensus estimates in November, hinting at healthy demand. Having said that, the current wave of outbreaks continued to intensify in recent weeks, so December could turn out to be much weaker in the consumer economy, making a stimulus deal vital for the recovery.

Market Wrap

Dow: 30,053, – 15 or 0.1%

S&P 500: 3,767 + 5 or 0.1%

Nasdaq: 12,429, + 90 or 0.7%

Russell 2000: 1,909, + 7 or 0.4%

Market breadth has been relatively weak this morning, with decliners outnumbering advancing issues by a less than 6-to-5 ratio on the NYSE at midday. Only 6 stocks hit new 52-week lows on the NYSE and the Nasdaq, while 84 stocks hit new 52-week highs. The major indices have been trading above their daily VWAPs (Volume-Weighted Average Price) for most of the morning session, pointing to intraday buying pressure. The energy sector has been making headlines yet again this morning, climbing higher by over 3% thanks to the surging oil prices, with tech stocks and materials also showing strength and the other main sectors being little changed at midday. Stay tuned!

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