Heavy Headlines Dragged Stocks This Week

However, the week is ending on a high note

Deputy Editor
Oct 16, 2020 at 1:59 PM
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Following the major benchmarks' best week in months, the Dow started off strong with its fourth-straight triple-digit win. However, an unfortunate series of updates weighed on sentiment to follow. On Tuesday, stocks took a breather after news that drugmakers Eli Lilly (LLY) and blue-chip stock Johnson & Johnson (JNJ) both paused potential vaccine trials due to complications, while second stimulus sentiment grew increasingly hesitant. The week was also marked by third-quarter earnings reports, and bank earnings in the middle of the week did little to improve morale.

Furthermore, Treasury Secretary Steven Mnuchin announced that although progress is being made, he did not expect a stimulus package before the election. Stocks plummeted right off the bat on Thursday, with jobless claims data coming in higher than expected, along with news that various places in Europe are tightening their coronavirus restrictions again. Friday, however, is looking up, with retail sales coming in higher than expected, and an announcement from blue-chip drugmaker Pfizer (PFE) that it could apply for emergency use of its COVID-19 vaccine as soon as late November. For Friday's trading, stocks are moving higher on the day, and now eyeing modest weekly gains.

Blue-Chip Stocks Hang Tight Amid Rocky Week

Plenty of blue chips rose higher during this tumultuous week, including JPMorgan Chase (JPM), which kicked off third-quarter earnings season on a high note. Walt Disney (DIS) jumped after turning its focus to revamping its streaming service, which brought out plenty of options traders. 

Meanwhile, Walgreens Boot Alliance (WBA) had positive fiscal fourth-quarter report, giving it a much-needed boost after its recent struggle on the charts. In a similar boat, new Dow stock Amgen (AMGN) has been trading sideways, though according to data from our Senior Quantitative Analyst Rocky White, now looks like a good time to buy. 

Auto-Related Stocks Make Moves

This week, AutoZone (AZO) sped higher after a sparkling review from Raymond James, placing the stock in its current list of favorites. Ford (F) rose as well, after Deutsche Bank named the stock a "catalyst call buy," citing strong third-quarter expectations, the company's new CEO, and an attractive product launch cycle. Electric vehicle-maker Tesla (TSLA) also entered the mix, after pulling back to a historically bullish trendline that could push the stock higher. 

Housing Data Highlighted in Week Ahead

There is plenty for investors to sift through in the coming week. Housing data will be highlighted, followed by jobless claims and consumer data later in the week. As earnings season gains steam, the latest quarterly reports will trickle in as well, with several blue-chip names such as IBM (IBM), Intel (INTC), Procter & Gamble (PG), Travelers (TRV), and Verizon (VZ) among the notable reporters. 

In the meantime, check out this analysis of the Coppock Curve, which recently signaled a "buy" on the Dow. Also see how the Dow has performed historically after one of these signals. 



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