Happy New Years Everyone! I am sure many of you are thankful we’ve moved beyond 2020 into a new year. 2020 was a great trading year for us and I see 2021 being no different. In fact I believe this new year will offer up more surprises that most people are expecting. Get my short take in this quick holiday weekend summary.
WEEKLY SOUND BITES:
• The major indexes hit all-time highs but ended the week mixed, with small-caps recording losses. Stocks closed out a year of solid gains led by the technology-heavy Nasdaq Composite Index, which notched its best annual performance since 2009… Stocks began the week on a positive note, helped by Trump’s signature of a USD 900 billion coronavirus relief bill on Sunday night… Optimism over the rollout of new coronavirus vaccines also seemed to support sentiment. On Wednesday, the UK became the first country to approve the use of the vaccine developed by AstraZeneca and Oxford University, and hopes grew that U.S. regulators would soon follow… Case growth in the U.S. continued to moderate after the post-Thanksgiving spike, but the ongoing increase in hospitalizations raised further concerns about intensive care unit capacity in some parts of the country.
• The last week of the year saw very lite light economic calendar was highlighted by housing data. Home prices rose at a faster pace than predicted in October, but November pending home sales unexpectedly fell 2.6%, reflecting constrained inventories. Weekly jobless claims defied expectations for an increase and fell to 787,000, the lowest level in almost a month. The last-minute passage of extended unemployment benefits in the coronavirus relief bill threatened an interruption in some payments in the final week of the year, however.
• The fading likelihood of larger stimulus payments due to roadblocks in the Senate, along with month-end buying activity, pushed the yield on the benchmark 10-year U.S. Treasury note modestly lower as the week progressed…Meanwhile, the broad municipal bond market recorded modest positive returns through mid-week, outpacing Treasuries. Solid cash flows into muni bond funds continued to support the asset class…and finally, Investment-grade corporate bond spreads—the additional yield offered over Treasuries and an inverse measure of the sector’s relative appeal—tightened throughout the week. Trading volumes were light, however, and no new deals reached the market.
• And over in Europe, shares rose, lifted by the UK-European Union (EU) trade accord and the approval of a U.S. fiscal stimulus package…Most European markets closed early due to the New Year’s Day holiday…meanwhile, the UK government extended its strictest restrictions to additional areas, seeking to curb a surge in infections, hospitalizations, and deaths caused, in large part, by a new variant of the coronavirus. Three-quarters of the country is now in a de facto lockdown…Also of note, the EU and China agreed on an investment treaty after seven years of talks. EU Trade Commissioner Valdis Dombrovskis said the EU would gain improved access to the Chinese market for automotive, private health care, cloud computing, and air transport services industries, among others. The EU would also receive similar benefits in the insurance and asset management industries to the ones secured by the U.S. in its “Phase 1” trade deal with China. The two sides have yet to ratify the treaty. The EU hopes it will come into effect in 2022.
• And finally, Chinese stocks finished a holiday-shortened week at multiyear highs as investors anticipated stronger growth in 2021. The country’s benchmark SSEC Index rallied Friday to its highest close since February 5, 2018, while the blue chip CSI300 Index recorded its highest close since June 15, 2015, according to Reuters. For the year, the SSEC Index advanced 14% and the CSI300 Index rallied 27%, buoyed by signs of an accelerating economy as China became the first major world economy to successfully contain the coronavirus…Ant Group stayed in the spotlight as the Chinese financial technology giant remained the target of a growing regulatory crackdown. The People’s Bank of China (PBOC) is considering plans to force Ant Group to shed equity investments in some financial companies, a move that would curb its influence over the sector, Bloomberg reported Thursday, citing unnamed individuals.
Enjoy this Holiday Edition of the Weekly Round-Up;
Don’t Be a Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !
hpb
