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“Gambling, beer and football filled the horizons of their minds.” – George Orwell
It may be Super Bowl weekend, but most people looking to enjoy a couple of beers watching the game this year will be following the lead of George Thorogood and drinking those beers alone- or at least with nothing more than a small group! Before we get to thinking about Sunday’s game, though, we still have the last trading day of the week to get through, and what a week it has been. The S&P 500 is up over 4% and on pace for its best week since the Election.
The January Non-Farm Payrolls report was just released and the results were mixed. While total Non-Farm Payrolls rose less than expected (49K vs 105K), the Unemployment Rate fell to 6.3% versus expectations for 6.7%. Average hourly earnings were slightly weaker than expected at 0.2% on a month over month basis, but because of revisions showed a larger than expected y/y increase. The average workweek spiked up to 35 hours which is a level that hasn’t been seen in years. Despite millions of jobs lost since the start of the pandemic, Americans who are working are working more and earnings more than they have in years.
Be sure to check out today’s Morning Lineup for updates on the latest market news and events, earnings reports from around the world, economic data out of South Korea and Europe, an update on the latest national and international COVID trends, and much more.
What a difference a week makes. In last week’s Bespoke Report and our B.I.G. Tips report from Sunday evening, we noted that after the declines from the prior week, major US index and sector ETFs had sen their timing scores in our Trend Analyzer shift from mostly ‘Poor’ to ‘Good’. Below is a snapshot of where things stood for US indices through last Friday’s close. Over the trailing five trading days, every index ETF was down, but with the exception of the Micro-Cap ETF (IWC), every ETF had a ‘Good’ timing score.
After the gains of the last four trading days, the picture has changed a lot. Over the last five trading days, every ETF in the Trend Analyzer was up over 1% and most are up well over 2%. With these gains, all of the ETFs have now moved back into overbought territory, and all of the timing scores have now shifted to ‘Neutral’ or ‘Poor’. That doesn’t mean that the market will necessarily pull back from here, but the risk/reward is skewed more towards the risk side again. As always, pick your spots.