Jan 7, 2021
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“The truth does not change according to our ability to stomach it.” – Flannery O’Connor
They’re trying to pick up the pieces in Washington DC today after Congress certified the results of the November election very early this morning. Futures are up and indicated to open at more record highs. In economic news, both initial and continuing jobless claims came in lower than expected. Regarding the Fed, there are a number of speakers on the calendar today, so those comments will be watched closely.
As we often say, markets are usually better off when Washington isn’t the story, so hopefully, there is no breaking news on that front going forward in the days ahead.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, the results of the electoral college certification, economic data out of Europe, an update on the latest national and international COVID trends, and much more.
The rally in bitcoin just won’t stop. While a normal price chart of the crypto-currency looks crazy enough, looking at bitcoin’s ascent in terms of its price relative to gold is even crazier. After today’s 8% rally, one bitcoin is now worth a pound and a quarter of gold. On Election Day, one bitcoin was worth a half-pound of gold, which at the time we thought was a lot. At the end of the year, though, the ratio moved to a pound, and year to date, bitcoin’s price has rallied more than 30%- in less than a week!
While the move in bitcoin has been extreme on a percentage basis, it may sound hard to believe, but the current move is not even as large as other similar moves in recent years. Over the last 50-days, bitcoin’s price has rallied more than 115%, but back in June 2019, its price rallied more than 138% over 50-days, and back in late 2017, the price rallied more than 300%!
Jan 6, 2021
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“What is now proved was once only imagined.” – William Blake
Georgians went to the polls yesterday, and in what proved to be extremely tight races, the Democratic candidates have come out on top. While the results aren’t official, both Warnock and Ossoff look to have the necessary votes to win the election to the US Senate. We’re seeing some big reactions in the market this morning as growth stocks are getting hit hard on the prospect of higher rates, while small caps surge on hopes of more spending and stimulus.
There will be all sorts of takes from both sides that the results mean this or that for the prospects of the market, and while the policies of a Washington fully controlled by the Democrats will have some good and bad impacts at the margin, as we noted in the Washington section of our 2021 Annual Outlook, the market is much bigger than the politicians in DC. The secular trends that have been in place leading up to this election are still in effect now.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, the results of the Georgia races, an update on the latest national and international COVID trends, and much more.
As noted above, we’re seeing some big moves in markets this morning as investors digest the results of the Georgia elections. As a case in point, this morning the Russell 2000 is on pace to open up over 2% while the Nasdaq 100 is indicated more than 1.5% lower. That spread, if it continues through the opening bell, will mark just the fifth time since 2000 that the performance spread between the two ETFs that track these indices was more than 3.5 percentage points at the open. The first was in September 2008, while there were three last year (one in May, one in June, and one in November).
Jan 5, 2021
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“the most important election that has taken place since the adoption of the federal constitution.” – Pittsfield Sun, 1813
The media and politicians have literally been telling us for centuries that “this election” is the most important of our lifetimes, and they’re at it again with Georgia. Given the implications for control of the Senate, this election is important in some respects, but if you really think it’s the most important election of your lifetime, we suggest you find a hobby.
Futures have been trading on either side of the flat-line this morning and are currently on the south side of unchanged. After the opening bell, we’ll finally start to get some important economic data with the ISM Manufacturing report at 10 AM Eastern. Economists are expecting a modest decline from last month’s reading of 57.5, but still a level well above 50 (56.5).
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, economic data out of Europe, an update on the latest national and international COVID trends, and much more
Whether it’s the most important election of our lifetimes or not, today’s run-off Senate elections in Georgia probably are the most important elections taking place today, and the race is extremely close. According to the website, electionbettingodds.com, Republicans are slightly favored to hold on to the Senate with 53% odds. As for the individual races, Republican Senator Perdue is slightly favored to retain his seat, while the current incumbent Republican Kelly Loeffler is a relatively sizable underdog against Democratic challenger Raphael Warnock. Given the closeness of both races, though, it entirely likely that tomorrow morning at this time we won’t know who will have control of the Senate in the upcoming session of Congress.
Jan 4, 2021
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“An end is only a beginning in disguise.” – Craig D. Lounsbrough
It’s still early, but based on early indications in the market, 2021 is picking up right where 2020 left off. Futures are indicated higher, COVID numbers remain right at or near their highest levels of the pandemic, and President Trump is still dominating the headlines. Besides the year on the calendar, one of the few differences between now and 2020 is that bitcoin is trading down sharply from its highs over the weekend. Despite the 8% decline, though, it is still trading higher than where it closed out 2020.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, a recap of the latest PMI Manufacturing reports for the month of December, an update on the latest national and international COVID trends, and much more.
Heading into the first trading day of the year, the majority of sectors remain at overbought levels with just four that aren’t overbought (Utilities, Real Estate, Industrials, and Energy). Of those four sectors, two (Utilities and Industrials) now actually have “Good’ timing scores while every other sector enters 2021 at neutral levels.
Dec 31, 2020
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“The record shows I took the blows and did it my way.” – Frank Sinatra, “My Way”
What most people around the world have been wishing for months now is finally starting to come true, and in some areas of the world, it already has. 2020 is coming to an end! Unfortunately, 2021 is going to start out looking a lot like 2020, but hopefully, by the end of the year, it’s looking more like something better.
In markets today, things are understandably quiet for the last trading day of the year. The only significant data point of the day is jobless claims. Initial claims came in lower than expected at 787K which was below consensus forecasts for a reading of 830K. Continuing Claims also came in more than 100K below the consensus forecast of 5.39 million and were the lowest of the COVID era. So, at least there’s some positive economic news to close out the year.
There’s typically not a lot of liquidity in markets on the last trading day of the year, so you never know what is going to happen, especially in the final minutes of trading for the year. However, whether we finish the day higher or lower, don’t read too much into it.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, a recap of global equity market performance, an update on the latest national and international COVID trends, and much more.
Nasdaq futures are currently indicating a higher open, and if it sticks through the closing bell, the index will have finished the day higher on 61.1% of all trading days in 2020. At that level, 2020 would rank as the fourth-highest percentage of positive days for a given year in the index’s history. The only three years that saw a higher percentage of positive days were 1978 (65.5%), 1979 (66.0%), and 1980 (64.0). The big difference between now and those three years, though, is that while in 2020 the Nasdaq is a well known and widely followed exchange where some of the largest companies in the world are listed, back in 1980, most people probably had no idea what the Nasdaq was.
If today ends up being a down day for the Nasdaq, 2020 would then fall into the fifth position in terms of the highest percentage of positive days, trailing 1989 (61.9%).
Dec 30, 2020
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“Charity is injurious unless it helps the recipient to become independent of it.” – John D. Rockefeller
Futures are higher this morning, but there’s very little news to speak of impacting the markets. What else do you expect on the second to last trading day of the year. In Washington, it seems unlikely that the Senate will pass the $2,000 check proposal that President Trump and the House have been pushing for, but the $600 checks have already started hitting the bank accounts of Americans who qualify.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, an update on the latest national and international COVID trends, and much more.
In a post yesterday, we highlighted the Energy sector and how a number of stocks in the sector, as well as the sector ETF (XLE) that tracks it, have experienced golden crosses with respect to their 50 and 200-day moving averages in recent trading. Golden crosses are considered bullish technical patterns that occur when a security’s shorter-term moving average crosses up through a longer-term moving average as both are rising. While the Energy sector ETF has already experienced a golden cross, the sector hasn’t quite completed the pattern, although at this point it’s only a matter of time before it follows suit.
Golden crosses may be considered bullish technical patterns in theory, but do they work in practice? We took a look at that trend in today’s Morning Lineup. Sign up for a free trial to find out!
