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“Never confuse movement with action.” – Ernest Hemingway

After a snowstorm paralyzed the mid-Atlantic region earlier in the week, there’s not a lot of movement on roads in the Northeast this morning, but it is nothing compared to what drivers faced in the Virginia area.  Futures are generally stalled out this morning as well with Dow and S&P 500 futures flat on the morning, while Nasdaq futures are firmly in the red, pointing to more weakness ahead for tech and growth stocks.

The major economic data release of the morning was the ADP Private Payrolls report which came in at 807K and was nearly double consensus expectations, and now the focus will shift to FOMC minutes from the December meeting at 2 PM Eastern.

Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.

We’re only two trading days into the year, but already there’s been a lot of action.  Within the S&P 500, more than one hundred stocks have moved 5% YTD (72 stocks up 5%+ and 30 down 5%+).  At the sector level, the moves have also been monstrous. The Energy sector is up 6.66% (welp) while Financials has rallied 3.88%.  For both sectors, the YTD gains already rank as the best two-day starts to a year since at least 1990.  On the downside, three sectors have also declined at least 1% with Health Care leading the way lower falling by 2.35%.

With 9.01 percentage points separating the best and worst-performing sectors, the YTD performance gap after two trading days is one of the widest since 1990.  The chart below shows the performance gap between the best and worst-performing sectors on a YTD basis after just two trading days. During this span, the average gap has been 5.2 percentage points, but the current gap of just over 9 percentage points is the widest since 2002 when 9.36 percentage points separated the performance of Technology (+8.19%) and Health Care (-1.16%).  The widest performance spread between two sectors after just two trading days was in 2001 when 18.7 percentage points separated the 10.2% rally in Telecom Services from the 8.5% decline in Utilities.  2001 was also a year when the Fed announced a surprise rate cut as the dot-com bubble was bursting.  Don’t think we have to worry about one of those coming any time soon.

Turning back to the Energy sector, not only is its 6.66% YTD gain the best for that sector since 1990, but it is also the best two day start for any sector since 2002.  That’s a lot of Energy!

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