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China’s stocks take a break after Monday’s rally vaulted market value past US$10 trillion as traders put Covid-19 in rear view mirror

China’s stocks take a break after Monday’s rally vaulted market value past US$10 trillion as traders put Covid-19 in rear view mirror



a close up of a street: Hong Kong’s financial district is deserted as the approach of Typhoon Nesat on 29 September 2011 emptied the streets. Photo: SCMP


© SCMP
Hong Kong’s financial district is deserted as the approach of Typhoon Nesat on 29 September 2011 emptied the streets. Photo: SCMP

China’s stocks declined in early trading, taking a respite after rallying by the most in three months, as investors assessed the strength of the economic recovery and the prospect of refresh US stimulus packages. Trading was halted in Hong Kong due to an approach by the tropical storm Nangka.

The Shanghai Composite Index dropped 0.5 per cent to 3,342.18 in early trading on Tuesday. It jumped 2.7 per cent a day earlier on expectations that the recovering in the Asian nation will gather pace and President Xi Jinping will unveil further reform measure in his trip to Shenzhen to mark the 40th anniversary of the economic zone in southern China on the doorsteps of Hong Kong.

China’s stocks top US$10 trillion as economy shakes off 2015 rout, Covid-19

The combined market values of the companies trading on the Shanghai and Shenzhen exchanges rose to US$10.04 trillion on Monday, surpassing the US$10 trillion mark for the first time since 2015. China is the world’s second-largest equity market after the United States.

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

China is due to release the September data on exports and imports on Tuesday and the data on third-quarter economic growth will be released on October 19. Other markets in Asia were mixed as the US was still deadlocked over a new round of stimulus measures.

Hong Kong’s securities market has been halted from trading in the morning session after the local weather agency raised the typhoon signal to the third-highest level on early Tuesday, the market operator said in a statement.

The Hong Kong Observatory issued the No

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Nasdaq soars as tech stocks lead a market rally

Nasdaq soars as tech stocks lead a market rally

Wall Street rallied Monday with tech stocks leading the way. All three major stock indexes soared higher.



a person riding a bicycle on a city street


© Michael Nagle/Bloomberg/Getty Images


The Nasdaq Composite was the strongest performer, rallying 3.2% in the mid-afternoon.

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The Dow was up 1.1%, or 300 points, and the S&P 500 climbed 2%.

All three benchmarks inched closer to record territory once again. The Nasdaq and S&P 500 stand to beat their closing level from early September, the Dow’s last record finish was in pre-pandemic times.

Shares of Apple were among the top performers in both indexes. The tech giant is slated to announce its new iPhone on Tuesday after weeks of pandemic-related delays. Apple stock traded nearly 7% higher.

Meanwhile, shares of Nasdaq-listed software company Twilio rallied more almost 8% after the company announced its intention to buy data start-up Segment for $3.2 billion.

Software stocks look to be getting out of the rut that dominated tech stocks in September, said Paul Hickey from Bespoke, and Monday’s rally is proof of that.

Otherwise, the Columbus Day holiday on Monday meant a more quiet day in terms of economic news, but third quarter earnings season is just around the corner. The season kicks off with America’s big banks, including Citigroup and JPMorgan starting to report on Tuesday.

Analysts at Goldman Sachs think earnings will paint an uneven picture of corporate America, as some businesses recovered from a disastrous second quarter while others are still struggling.

Besides earnings, the election is also fast approaching with only three weeks left to go.

“Investors are focused on the implications of a ‘Blue Wave’ election given that the probability of a Democratic sweep has climbed to 60% from 47% one month ago,” the analysts said in a note to clients.

Investors will also have to keep an eye

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Why the stock market’s sharp rally off March lows is even stronger than in seems, according to one Wall Street chief strategist

Why the stock market’s sharp rally off March lows is even stronger than in seems, according to one Wall Street chief strategist



a group of people standing in front of a computer: Bryan R. Smith/AFP/Getty Images


© Bryan R. Smith/AFP/Getty Images
Bryan R. Smith/AFP/Getty Images

  • The market’s leadership is wider than perceived and consists of more than just the largest tech stocks, James Paulsen, chief investment strategist at The Leuthold Group, said Friday.
  • While cyclical sectors trail the S&P 500 by 5% on a market-weighted basis, they exceed the benchmark on an equal-weighted basis, Paulsen highlighted.
  • Similarly, the S&P 500’s outperformance over the small-cap-focused S&P 600 is halved when market weighting isn’t taken into account.
  • Strong gains from tech giants “distorted many traditional market signals” and possibly shifted investors’ views of the market, the strategist added.
  • Visit the Business Insider homepage for more stories.

Cyclical and small-cap stocks aren’t getting the credit they deserve for the market’s rapid recovery, James Paulsen, chief investment strategist at The Leuthold Group, said Friday.

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Tech giants played an undeniably large role in lifting indexes from their March lows. Crowding in mega-caps hit dot-com-era levels, and their outperformance led the Nasdaq to be the first major index to erase its pandemic-induced losses. Strategists warned of a bubble forming in the market and that leadership in the months-long rally was dangerously thin.

Yet certain gauges suggest the bull market’s drivers are more varied than just the popular tech giants. While cyclical sectors trail the S&P 500 by roughly 5% on a market-weighted basis, they’ve made a full recovery from the March trough and now outpace the benchmark on an equal-weighted basis, Paulsen said.

Read more: ‘The largest financial crisis in history’: A 47-year market vet says the COVID-19 crash was merely a ‘fake-out sell-off’ — and warns of an 80% stock plunge fraught with bank failures and bankruptcies



chart: Leuthold Group


© Leuthold Group
Leuthold Group

“Cyclicals have not done as well as the FAANGs — few stocks have — but relative to

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2 Key Things Investors Missed in the Stock Market Rally This Week

2 Key Things Investors Missed in the Stock Market Rally This Week

Friday closed the week on a positive note for the stock market, with market participants seeing no reason to curb their enthusiasm about the future. With Washington politicians once more getting close to making a deal for more economic support, and with most investors perfectly willing to shrug off what’s been a significant uptick in COVID-19 cases in many states across the nation, stocks added nice gains to their advance from Monday to Thursday. With today’s gains, the Dow Jones Industrial Average (DJINDICES: ^DJI) and S&P 500 (SNPINDEX: ^GSPC) were up between 3% and 4% for the week, while the Nasdaq Composite fared best of all, rising more than 4.5% since Oct. 2.

Today’s stock market

Index

Percentage Change

Point Change

Dow

+0.57%

+161

S&P 500

+0.88%

+30

Nasdaq Composite

+1.39%

+159

Data source: Yahoo! Finance.

Looking at stocks, everything appears to be going perfectly for investors. But to understand everything that’s going on with the investment world, you sometimes have to go beyond the stock market. This week, there were a couple of noteworthy events in other financial markets that were worth the notice of those who concentrate on equities.

A big rate rise

Even as stock markets moved higher, it was a different story for the bond market. Monday’s stock market gains sent bond prices plunging, with the 30-year Treasury falling by about 2%. By the end of the week, rates had risen from 1.49% the week before to 1.57% on Friday.

That might not seem like much, but it was enough to send some big bond ETFs down. iShares 20+ Year Treasury (NASDAQ: TLT) ended the week with a nearly 2% drop, while some shorter-term Treasury funds saw slightly smaller declines.

Perhaps more importantly, it was one of the first times in a long while that the

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A Wall Street strategy chief says the market is flashing bullish signals as more stocks start to rally

A Wall Street strategy chief says the market is flashing bullish signals as more stocks start to rally



a man wearing a suit and tie: CNBC TV


© CNBC TV
CNBC TV

  • Miller Tabak’s chief market strategist told CNBC on Friday the stock market is signaling it has upside potential before Election Day. 
  • Matt Maley cited the outperformance of the Russell 2000 index and said small-cap stocks and chip stocks have room to grow. 
  • He’s less optimistic about the market in the long term, however. A second wave of the coronavirus and an expensive market could be bearish after the election, he said. 

Matt Maley of Miller Tabak  told CNBC on Friday that the stock market is signaling it has upside potential before Election Day.

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The chief market strategist said he is watching the recent outperformance of small-cap stocks. As of Thursday, the Russell 2000 small-cap index was up almost 6% week-to-date, compared to a roughly 3% gain in the S&P 500. The broadening out of the stock market rally, which was previously dominated by mega-cap tech names, is bullish, he said. 

Chip stocks have also been a leading indicator for the market recently, he said. If they rally further, it will be bullish for the market at least until Election Day, the added. 

Institutional investor strategy based on the time of year could also push the market higher, he said.

“We’re in the fourth quarter of the year — institutional investors, if the market keeps rallying, no matter what they think of the long-term value of the marketplace, they have to be in the market and that could push things higher,” Maley said. 

He added that small-cap stocks and chip stocks are enticing right now. Investors can begin to rotate some of their holdings in large technology stocks, which may be a slightly overbought, into chip stocks and cloud computing stocks. “We have a long way to go” in those smaller technology names, Maley

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