Hey everyone, we are coming up on the end of year craziness we’ve seen throughout most of 2020 and the kick off of a new year. Most forecasts are extremely bullish! Get my take in this week’s Market Round-Up.
WEEKLY SOUND BITES:
• Major indexes reached record highs (same as COVID cases and Deaths) as expectations grew for the passage of another federal coronavirus relief package…Trading volumes were muted through much of the week in advance of the rebalancing of the S&P 500, which electric carmaker Tesla was set to join the following Monday… signs of progress emerged in congressional attempts to craft a new stimulus bill…the outlines of a roughly USD 900 billion package appeared to emerge, including roughly USD 600 direct payments to individuals and supplementary federal unemployment assistance of USD 300 per week…The rollout of the Pfizer-BioNTech coronavirus vaccine on Monday also seemed to bolster sentiment. On Thursday, a U.S. Food and Drug Administration (FDA) advisory panel gave its approval to Moderna’s similar mRNA vaccine, which would nearly double the expected number of total doses available by the end of the year…
• The toll the virus is taking on economic activity also became clearer during the week. On Wednesday, the Commerce Department reported that retail sales contracted 1.1% in November, roughly triple the expected decline and the worst showing since April. Weekly jobless claims, reported Thursday, reached 885,000, well above expectations and the highest level since early September…Continuing claims fell back to a new pandemic low, however…
• Long-term Treasury yields increased modestly through most of the week, as fiscal relief hopes and optimism about vaccine distribution outweighed the generally disappointing economic data…at its Dec 15–16 meeting, the FOMC held its policy rate steady, as expected, and elected to maintain the current composition of its bond purchases…and in an adjustment from its prior statement, the FOMC said that it will continue buying Treasuries and agency mortgage-backed securities at its current pace “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.” The Fed remains very dovish…
• And regarding BREXIT negotiations the UK Prime Minister Boris “Bull Dog” Johnson said we are in a critical phase saying a no-deal scenario was “very likely” unless the EU’s position changed “substantially.” Meanwhile the EU indicated it would be “very challenging” to bridge the “big differences before the deadline which has been moved (again!) to this coming Sunday…the UK Parliament is on standby for an emergency sitting before Christmas to consider the approval of a deal.
Enjoy This Week’s Market Round-Up;
Don’t be a Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !