The halfway mark. Stocks closed mixed but mostly down yesterday as a new strain of COVID, found in the UK, spooked bulls. Congress got the job done, passing a $900 billion relief package.
N O T E W O R T H Y
Flotation devices. Yesterday was an interesting one, not only in the markets, but also in the bigger picture. The bigger picture as in the WAY bigger picture, like the solar-system-big. First off, Jupiter and Saturn appeared to have a near collision yesterday night. Ok, they are actually around 450 million miles apart, but from here on earth they appeared really close. In fact, they haven’t aligned that closely since 1623! I will save you the math and say that it was a long time ago… in our very own galaxy. Let’s take the positive route and call it a good sign that things are starting to look up. Also happening in the Milky Way Galaxy, more specifically, our solar system, on the humble planet Earth, the Northern Hemisphere experienced Winter Solstice. At 5:02 AM yesterday, as I wrote my daily note, Winter officially arrived, making yesterday the shortest and darkest day of the year. I always reflect on that day, because every day that follows gets longer… and lighter. I think it is fitting in such a “dark” year that we can reflect on the ever-shortening days and now look forward to ever-brightening ones. And it comes at a pivotal point as well, with vaccines being rapidly delivered and a new relief bill being freshly approved by both chambers of Congress, WHILE YOU SLEPT… or looked up at the night sky. That stimulus package, though a bit late, and a bit smaller than many economists would like, will be a welcomed salve for the weakened economy. The details of the bill are still emerging, but the highlights are as follows. Stimulus checks -> $600 for individuals who qualify, Unemployment Benefits -> $300 extra per week, PPP (Paycheck Protection Program) loans for struggling small businesses -> $248 billion to the rescue, Schools and Education -> $82 billion in aid, Vaccines -> $69 billion in additional funding, airlines -> will receive an additional $15 billion, public transit -> will get $27 billion in relief, and rental assistance -> $25 billion including an eviction moratorium extension. Additionally, $15 billion has been allocated to assist live entertainment venues, movie theaters, and cultural institutions. There are struggling local theaters everywhere across the country with New York City’s Broadway having been closed since last March and not planning to reopen until May, 2021. Finally, lawmakers decided to help restaurants out by allowing big business to deduct 100% of meals on their taxes, dubbed the “three martini lunch stimulus”. While I am not so sure that one will have a big impact on restaurants, nor will it cause big companies to encourage their employees to eat out more often, but it certainly is a congressional wink to corporate America. It was nice to see lawmakers finally come together to work things out. Many analysts argue that the aid is not enough, but it will certainly have a positive impact in this final push to get things back to normal. So, yes, perhaps this is the true turning point for the economy and the nation’s health. Not unlike the days, which will henceforth grow longer and brighter. Stay positive… stay healthy.
THE MARKETS
Stocks traded mostly lower yesterday as investors were spooked by an new COVID strain being uncovered in the UK. Stocks erased deeper earlier losses. Gains were led by the banking sector which traded up in response to the Federal Reserve’s announcing on Friday that banks will be permitted to resume stock buybacks after being restricted earlier in the crisis. The S&P500 fell by -0.39%, the Dow Jones Industrial Average advanced by +0.12%, the Russell 2000 Index added +0.02%, and the Nasdaq Composite Index slipped by -0.10%. Bonds fell and 10-year treasury yields fell by -1 basis point to 0.93%.
NXT UP
- Annualized GDP Growth (3Q) is expected to be +33.1%, in line with earlier estimates.
- Conference Board’s Consumer Confidence (Dec) may have climbed to 97.0 from last month’s 96.1.
- Existing Home Sales (Nov) are expected to have slipped by -2.2% after climbing by +4.3% in October.
- Richmond Fed Manufacturing Index (Dec) is expected to have fallen to 11 from 15.