Hey Folks, here in the US we had a nice Holiday break in the trading week with Thanksgiving as we cap off a very strong trading month for November. Now as we roll into another traditionally strong trading month market price action will get very interesting. Get my take in this holiday shortened trading week below;
WEEKLY SOUND BITES;
• A new round of vaccine optimism and diminishing political uncertainty helped stocks build on recent gains for the holiday-shortened week. Most of the major benchmarks hit record highs, with the narrowly focused Dow Jones Industrial Average gaining the most attention by crossing the 30,000 threshold for the first time…and as Q3 Earnings comes to an end we are seeing 80% beat rate for an average gain of 18%…in the value vs growth argument, Goldman came out and said if the top 5 companies in the S&P 500 (MSFT, GOOGL, FB, AMZN and AAPL) which account for 25% of the S&P 500 weighting were to fall 10% but the remaining stocks rise by 10% then the overall S&P would gain 5%…from a Volatility perspective, we have now seen over 194 consecutive trading days where the VIX has traded above 20, which is the longest streak since 2009…
• Economic data appeared to play a role in draining some of the week’s gains on Wednesday. Initial jobless claims rose unexpectedly to 778,000, their highest level in five weeks, while personal incomes fell 0.7% in October, offsetting September’s gain. The University of Michigan’s gauge of November consumer sentiment was revised slightly lower and hit its lowest level (76.9) since August. The Conference Board’s measure of consumer confidence, reported Tuesday, also fell more than expected. Core (excluding defense and aircraft) capital goods orders surprised on the upside, however, rising 0.7% in October and building on September’s surge of 1.9%. New home sales also surprised on the upside.
• Bitcoin continues to move higher, even with a reset in price at the end of this past trading week…Investor willingness to accept Bitcoin as a way of hedging against inflation is gaining in popularity with bigger institutions…Gold has historically been the “go-to” inflation hedge but as more outlets like PayPal accepting and easily converting Dollars to Bitcoin we will see this trend continue..
• European shares rose for a fourth consecutive week, fueled by positive vaccine developments, fading U.S. election uncertainties, and expectations that the U.S. Congress may compromise on a smaller economic stimulus. However, the advance lost steam after the UK and Germany extended coronavirus restrictions and vaccine euphoria waned.
• In Asian markets we saw Japanese stocks surge in the holiday-shortened trading week with their weekly performance capping a 16% advance thus far this month and marking its highest level since April 1991… and in China we saw Chinese stocks rising for the week as solid economic data outweighed concerns about rising defaults among domestic bond issuers…
Enjoy this week’s Round-Up;
Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !
hpb
