Anti body. Stocks rose moderately yesterday as investors cling to hope that a stimulus package may come soon. The first wave of vaccinations have started in the UK and the US FDA is in favor of approval for Pfizer’s vaccine, expected within days.
N O T W E W O R T H Y
The final push. OK, are my eyes deceiving me? Are folks in Washington DC finally getting down to the important business of the nation… JUST DAYS BEFORE the holidays… JUST DAYS BEFORE unemployment benefits run out for countless folks struggling as a result of the pandemic… JUST DAYS BEFORE the Government runs out of money… and JUST WEEKS BEFORE a new President is sworn in? Obviously, Washington has a flair for the dramatic and has proven, not just in recent years, to be reactive rather than proactive. I have honestly lost count of the number of times that lawmakers have come to an agreement at the eleven-and-fifty-ninth-minute before a financial apocalypse. The markets used to get all roiled when a budget could not get passed and shutdown was looming. These days it seems like a typical Tuesday on the Hill. Yesterday however was no typical Tuesday and the ongoing saga was interesting, if not dramatic. We had a Pitch from Mitch (McConnell) in which he was willing to give up his push for corporate liability protection in return for pulling state relief funding. We had Chuck Can I Get A Buck (Schumer), or rather, more bucks for states, employees, and stimulus checks. A surprise guest came in the form of Even Stephen (Mnuchin) who called on the House Speaker and Deal Seeker (Nancy Pelosi) with his own version of a deal which included corporate protections and funding for states leaving nothing for individuals. Yes, there was drama indeed, but at least all parties appear willing to strike a deal, which appears more likely than in the past. All of the back and forth, though somewhat confusing, has cast some positive sentiment on the markets, helping traders digest the growing numbers of COVID cases.
How far we have come. Clearly, we are not out of the woods yet when it comes to the COVID healthcare crisis. Additionally, the global economy is nowhere near where it was at the onset of the pandemic. Markets, on the other hand, have a slightly different take. I saw a nifty chart prepared by S&P Global Indices that showed the percent of recovery completed amongst several of its popular indexes. The firm’s most popular index, the S&P500, is 100% recovered, but we knew that. To get the 100% label, an index must have made a new all-time high since the end of April. Anything less is reported as the percent recovered between an index’s 2020 high and low. In addition to the large cap S&P500, the 100% club includes China 500, Asia 50, Global 1200, MidCap 400, SmallCap 600, TOPIX 150 (Japan), and TSX Composite (Canada). The laggers include Europe 350 (72%), Latin America 40 (66%), United Kingdom (65%), Global 1200 Energy (52%), and Global 1200 Airlines (44%). There you have it, the best and the almost-theres. We have made a lot of progress. We are almost there. Stay focused. Stay safe.
THE MARKETS
Stocks rose yesterday on positive exchanges between lawmakers seeking agreement on a new stimulus package. The UK’s inoculation has begun and Pfizer is one step closer to getting FDA approval which added to the positive momentum in stocks.
The S&P500 rose by +0.28%, the Dow Jones Industrial Average climbed by +0.35%, the Russell 2000 Index jumped by +1.4%, and the Nasdaq Composite Index added +0.50%. Bonds also climbed and 10-year treasury yields gave up -1 basis point to 0.91%.
NXT UP
- JOLTS Job Openings (Oct) may have fallen to 6.3 million from October’s 6.436 million.
- The Treasury will sell $38 billion 10-year notes.
- DOE Crude Oil Inventories (Dec 4) are expected to have declined by -849.25k barrels.
- The DoorDash IPO begins trading today.