Paypal Stock Surges To An All-Time High

Paypal Stock Surges To An All-Time High
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Commenting on PayPal stock surging to an all-time high and today’s trading Gorilla Trades strategist Ken Berman said:

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Q3 2020 hedge fund letters, conferences and more

The Future Looks Bright

While today’s session wasn’t an eventful one, it was just what the doctor ordered for bulls. Stocks settled down into a holiday-like rhythm today, easing fears of a post-Fed selloff and with the overnight rally in global risk assets in mind, the outlook for the coming months looks brighter and brighter.

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The key sectors diverged substantially yet again despite the choppy price action on the Street today, and despite a slight risk-on shift in the afternoon, defensive issues remained relatively strong throughout the day. Gold miners, utilities, and healthcare stocks gained the most ground, but real estate stocks and the tech sector also fared better than most cyclical issues. The energy sector finished in the red despite the rally in the price of oil, but financials and industrials eked out gains in the face of the short-term growth worries.

The number of new COVID cases surged to a new daily high over the past 24 hours, and the fears of a post-Thanksgiving spike seem to be confirmed with hospitalizations still on the rise as well. The number of confirmed cases is also at its highest level ever globally and the total number of infections is about to cross 75 million soon. The fact that the U.S. situation is the most serious in a global perspective added to the pressure on the dollar, while the recovery in European assets is gathering steam thanks to the improving COVID-trends. 

The Second $600 Stimulus Check Would Be Vital

Although lawmakers on both sides of the aisle voiced their concerns about the impact of a possible stimulus bill, the latest package checks most of the crucial boxes. The second $600 stimulus check would be vital in light of the deterioration in the job market, just as the extension of the extra unemployment benefits, with the small business loans also addressing acute needs. The bill would likely delay the looming end of the eviction moratorium, but despite this week’s progress time is running out for Congress to act this year.

The domestic economic calendar will be relatively low on key releases tomorrow, but the CB Leading Index could make waves just after the opening bell. The results of the latest bank stress tests are also due tomorrow afternoon, but their impact will only be felt in after-hours trading. The German IFO Business Index will highlight the overnight session, and another positive surprise would likely solidify the bullish trend in European assets, and, in turn, provide tailwinds for U.S. stocks as well.

The tech sector has been gaining strength during the consolidation that started almost two weeks ago, and thanks to that, the Nasdaq was the first to hit a new all-time high among the large-cap indices this week. While several tech giants have been hit by antitrust lawsuits in the U.S. and Europe in recent days, the Nasdaq closed at a new record today, suggesting that, compared to the rather “narrow” summer rally, more tech stocks have been pulling their weight lately. From a technical perspective, this broadening of the advance is another validation of the recent long-term breakout.

Paypal Stock Surges To A New All-Time High Yet Again

Paypal (PYPL, +2.3%) has been among the “hot” stocks of the week, as the online payment giant surged to a new all-time high yet again. The company got a nice boost from its recent entry into the cryptocurrency space, and with bitcoin pushing to new record highs, Paypal’s bullish momentum could persist in the coming weeks. The stock is up by a whopping 115% on a year-to-date basis, despite an almost three-month-long correction following its summer rally, and the continued e-commerce boom could fuel further gains in 2021. Stay tuned!

Headlines

  • Stocks finished broadly higher following another choppy session on Wall Street, with the Nasdaq and the S&P 500 closing at record highs
  • The dollar is nearing its lowest levels in six amid the stimulus-related speculation and the weaker U.S. job market trends
  • The Philly Fed Index missed by a wide margin in November while new jobless claims rose unexpectedly to 885,000 this week, but continuing claims dropped slightly
  • The legislative push against the dominance of Big Tech continues with another antitrust lawsuit against Google (GOOG, -1.2%)
  • The Volatility Index (VIX) closed at a one-week low, erasing its pre-Fed-meeting spike

Market Wrap

Index G/L Current level Year-to- date 50-day 200-day
Dow 149 30,303 6.1% 28,993 26,383
Nasdaq 107 12,765 42.2% 11,869 10,287
S&P 500 21 3,722 15.1% 3,543 3,187
Russell 2000 25 1,977 18.1% 1,729 1,474

Advancing issues outnumbered decliners by a 2-to-1 ratio on the NYSE today, with 136 stocks hitting new 52-week highs and 5 stocks hitting new 52-week lows, while volume was well below average.

Price Action Gauge ******** (reading for 12/17: 74)

Today’s low-volume rally solidified the positive short-term trend in stocks, and the drop in volatility is another bullish sign ahead of the holiday period.

Oversold/Overbought Gauge ******** (reading for 12/17: 27 Color: green)

The most reliable momentum indicators are turning higher once again thanks to this week’s rally in the major indices, and the measures are still firmly in overbought territory despite last week’s pullback.

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