Hey Folks, lot of potential turmoil in the markets with Volatility remaining higher than normal. Enjoy this week’s take on the markets.
WEEKLY SOUND BITES
• Major indexes finished the week mixed, but not before all but the S&P 500 Index hit record intraday highs this past Thursday…Biden announced his plans for USD 1.9 trillion of stimulus, although it appeared to contain few market-moving surprises…this week also brought the unofficial start of earnings season, with banking giants JPMorgan Chase, Citigroup, and Wells Fargo reporting fourth-quarter results before the start of trading on Friday. Despite upside earnings surprises, shares in all three fell as trading began, with Wells Fargo leading the declines on a revenue miss…analysts polled by FactSet were expecting overall earnings for the S&P 500 to have declined 6.8% (on a year-over-year basis) in the final quarter, the fourth-worst showing over the past decade. For 2020, analysts were anticipating that earnings fell 13%…
• A bigger factor in Friday’s pullback may have been the morning’s news of a 0.7% drop in retail sales in December—more than expected and the third straight monthly decline, according to revised data. The broad-based drop—sales fell 1.4%, excluding the volatile auto segment—was not apparently due to COVID-19 restrictions, with the decline concentrated in online sales. Weekly jobless claims, reported Thursday, hit 965,000, the highest level since mid-August. The manufacturing sector remained in much better shape, with industrial production surging 1.6% in December, roughly three times consensus estimates. Colder December weather and a snapback in utility demand drove part of the gains, however…
• The retail sales data seemed to push Treasury yields lower on Friday, but long-term yields increased modestly through most of the week, supported by stimulus plans and dovish comments from Fed Chair Jerome “Power Ranger Boom-Boom” Powell…he affirmed that the central bank has no plans to raise interest rates anytime soon and would first need to see inflation remain above 2% for some time…
• Shares in Europe fell as the resurgence in coronavirus infections dented optimism surrounding plans for further fiscal stimulus in the U.S…Expectations for additional U.S. fiscal stimulus triggered reflation hopes, moderating the fall in core eurozone yields…European governments continued to toughen and extend lockdowns amid the emergence of new, highly infectious variants of the coronavirus and increasing hospitalizations of patients…
• Chinese stocks fell as the U.S. added another nine Chinese companies to its investment blacklist on Thursday, taking the total to 44 names that the Trump administration claims have ties to China’s military… Small clusters of the coronavirus infections have appeared in China in recent weeks, as well as the country’s first COVID-19 death since May… China’s December exports climbed a better-than-expected 18.1% year-on-year in U.S. dollar terms. For all of 2020, exports grew 3.6% year over year to a record USD 2.6 trillion, while imports declined 1.1%. The latest trade data showed that China continues to record the strongest export growth in Asia and underscored the country’s economic strength as most major economies are struggling to control the pandemic…
Enjoy This Week’s Round-Up
Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !
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