Out of the Gate

U.S. markets power higher on positive vaccine news and the opening of global economies.

Read in Browser   The Market Sum | Insight after the bell By Caleb Silver, Editor in Chief Tuesday's Headlines 1. Global markets rally on vaccine optimism 2. S&P 500 crosses critical threshold 3. New investors bought a bottom 4. Who's hiring now 5. The NYSE partially reopens trading floor Markets Closed Dow 24,995.11 +529.95 (+2.17%) S&P 2,991.77 +36.32 (+1.23%) Nasdaq 9,340.22 +15.63 (+0.17%) VIX 28.01 −0.15 (-0.53%) Bitcoin $8,817.14 −$91.07 (-1.02%) US 10-Yr Yield 0.698 +0.041 (+6.24%)     Image credit: stefanschurr/Getty   Markets Today Global markets shot out of the gate after the extended weekend with strong gains coming from all regions as positive vaccine news put investors in the buying mood. The DJIA crossed 25,000 for the first time since March 6. The Nasdaq hit its highest level since February 21. Most sectors rallied, minus tech, with airline and cruise stocks leading the gains as the good vaccine news and the gradual reopening of the traveling economy bringing them back to life.    The momentum, if not the money, is back in the stock market as investors appear willing to bet on a strong recovery, or at least a strong enough recovery, to justify the market's lofty valuations. The economic news is bottoming and there are signs of recovery everywhere, except the jobs market outside of minimum wage hiring. That looks to get worse before it gets better.   While the stock market has yet to retrace all the ground it lost since its highs of early 2020, the S&P 500 is actually up more than 6% from a year ago. While it may not be justified, the returns are real, and so, apparently, is the underlying support for the market from a technical analysis perspective. The S&P 500 briefly crossed through its 200-day moving average today, which is something we haven't seen in quite awhile.   chart courtesy TradingView     Headlines: The global case tally from COVID-19 climbed above 5.5 million on Tuesday, as the World Health Organization warned of the possibility of an immediate "second peak" in infections during the current wave, should countries and local governments ease measures to contain the spread too soon. U.S. consumer confidence rose slightly to 86.6 in May from a revised 85.7 in the prior month, the Conference Board reported Tuesday. This follows rapid declines in the index in March and April. Employment measures were mixed. The share of Americans who said jobs were plentiful fell to 17.4% from 18.8%. The percentage who said jobs were hard to find fell to 27.8% from 34.5%. Apple plans to open approximately 100 stores in the United States this week, according to a press release. In total, about 130 out of 271 Apple Stores in the United States will be open by the end of the week. Apple operates 510 stores around the world.  New York City is seeking authority to borrow as much as $7 billion if necessary to make up for the revenue lost because of the coronavirus pandemic. Senator Liz Krueger, chair of the state senate's finance committee, introduced a bill Monday that would authorize the city's Transitional Finance Authority to issue debt to make up for the projected loss through mid-2021.  South America's largest airline, LATAM, has filed for bankruptcy under Chapter 11 in the U.S., it said in a statement. Shareholders, including the Cueto and Amaro families and Qatar Airways, will provide up to $900 million in debtor-in-possession (DIP) financing.  Shares in Regeneron Pharmaceuticals (REGN) are almost 4.5% lower in after-market trading once French giant Sanofi announced it is selling a stake worth $13 billion. The American biotech firm will repurchase approximately $5 billion of its shares directly, and the sale of the remaining 12.8 million shares worth more than $7 billion is the largest public equity offering in the heathcare industry on record. Commissioner of the Chinese foreign ministry in Hong Kong and Hong Kong's leader Carrie Lam attempted to ease tensions. They promised the new national security law for the region proposed by China will not affect rights and freedoms. Robert O'Brien, White House National Security Adviser, told NBC that the U.S. would impose sanctions on HK and it would cease to be a financial center if China goes through with its plans. Japan lifted its state of emergency yesterday, and Prime Minister Shinzo Abe is eyeing more coronavirus stimulus. Abe is looking to increase the total package to $1.9 trillion, and the cabinet is expected to approve it this week. chart courtesy Goldman Sachs   New Traders Bought the Bottom While trillions of dollars in institutional money has been moving out of the stock market, new investors were climbing in. Online account openings at Fidelity, Schwab, E*TRADE, TDA, and Robinhood have all soared, and activity among new accounts has been robust.    Robinhood, which is a favorite for new investors, saw the biggest surge in account openings over the past two months. Some attribute that to new traders who are usually sports bettors turning to stocks to quench their gambling thirst. That may be, and working from home may have triggered many others to brave the waters of stock market volatility.    Data from Robinhood shows that many of its users, new and existing, were actively taking positions in the market right at its most recent bottom. They've enjoyed quite a ride to date. The question is, will they stick around when the market heads South and professional sports are back in business?     chart courtesy Challenger, Gray & Christmas   Who's Hiring? Amid the cascade of layoffs over the past few months, several companies have been adding jobs. They are clustered in the retail, entertainment, and leisure sectors, as you might imagine, and are mostly minimum wage to low-paying jobs. Still, they are jobs that could potentially lead out-of-work Americans back into the labor force as the economy takes time to stabilize.   We know this is not going to be the trend across most industries for awhile. But those companies that are adding jobs gives us a pretty good snapshot of the way the U.S. economy is going to unfurl over the summer.     Image courtesy NYSE   The NYSE Is Back in Business  The New York Stock Exchange partially reopened its trading floor today after being closed for the last eight weeks. Markets have functioned rather well without the men and women making and taking orders in their colorful jackets with their Wall Street banter, but we have missed the human judgement traders bring to face-to-face stock trading. That could explain some of the volatility we saw in late March, even though most trading is and has been electronic for years. Still, Wall Street getting back to work is a powerful symbol, and we need those given where we've been and the challenges ahead. More News: Top Consumer Staples Stocks for June 2020 How Do You Transfer Common Stock From One Broker to Another? AutoZone Stock Tests Highs After Strong Q3 Earnings SPONSORED BY FIDELITY INVESTMENTS When Others Step Back, Fidelity Steps Up Attracting the next generation of talented associates is a top priority for the Fidelity leadership team. Here's what they're doing to navigate the current crisis. LEARN MORE  > (chart courtesy YCHARTS)     Shares of airline stocks, such as United (16.5%), American (over 14.5%), and Southwest (over 13.5%), are up as travel restrictions start to lessen. Cruise line stocks, such as Norwegian (16%) and Royal Caribbean (15%), rose amid the news of another coronavirus vaccine trial.     Shares of Regeneron are down nearly 4.5% following pharmaceutical company Sanofi selling a $13 billion stake in the biotech company. Keysight Technology's stock price fell after the electronic measurement equipment manufacturer reported diminished Q2 results compared to last year. Word of the Day The 200 Day Simple Moving Average The 200-day simple moving average (SMA) is considered a key indicator by traders and market analysts for determining overall long-term market trends. The indicator appears as a line on a chart and meanders higher and lower along with the longer-term price moves in the stock, commodity, or whatever instrument that is being charted. The 200-day SMA seems, at times, to serve as an uncanny support level when price is above the moving average or a resistance level when price is below it.     image courtesy fineartamerica.com   Today in History May 26, 1896: The Dow Jones Industrial Average is first published. Its 12 initial members are the great industrial giants of the time: American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling & Cattle Feeding, General Electric, Laclede Gas, National Lead, North American, Tennessee Coal & Iron, U.S. Leather, and U.S. Rubber. The index's value that day: 40.94.   Phyllis S. Pierce, ed., The Dow Jones Averages 1885–1980 (DowJones Irwin, Homewood, IL, 1982), introduction, not paginated. How can we improve the Market Sum? Tell us at marketsum@investopedia.com Enjoy the Market Sum? 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