Hey Folks the markets showed some strength in this US Holiday shortened trading week. But, I am noticing price action feels a bit “spongy” so we must be careful. Enjoy this week’s update.
WEEKLY SOUND BITES;
• Major indexes moved higher for this US Holiday shortened week, hitting new intraday highs on Thursday before a pullback on Friday… As fast-growing technology-related stocks led the gains, the market’s recent rotation into small-caps and value stocks reversed, at least temporarily. Trading volumes remained exceptionally high, reflecting, in part, heavy participation by individual investors… On Tuesday, former Fed Chair “”Boom Boom” Powell and Treasury Secretary nominee Janet “Aunt Bee” Yellen told the Senate Finance Committee that it was necessary to “act big” to help the economy deal with lockdowns and high unemployment… Investors may have been further encouraged by her statement that “Wrong Way” Biden was focused on supporting the economy rather than raising taxes…the month of Feb has traditionally been one of the worst trading months following a new with a new President in office…since 1927, Feb has fallen 4% on average…
• The week’s relatively light economic calendar did not appear to play a major role in driving markets. Weekly jobless claims fell back from a multi-month high but remained elevated, at 900,000, while IHS Markit’s preliminary gauges of both manufacturing and service sector activity in January surprised on the upside. The housing sector remained in outstanding shape, with existing home sales and housing starts at their highest levels since 2006…
• Treasury yields remained generally steady over the week…generally positive economic data helped to offset downward pressure on yields from the Fed’s Treasury purchases and news of an extended lockdown in Germany and other countries across Europe…hopes for additional stimulus and positive corporate earnings reports bolstered the performance of high yield bonds. High yield investors were also mostly focused on new deals, and the market saw steady issuance throughout the week…
• China’s economy officially grew by 2.3% in 2020, near forecasts and underscoring the country’s remarkable recovery from prior-year coronavirus lockdowns. Fourth-quarter real gross domestic product growth accelerated to 6.5% year-on-year, making China the only major economy to regain its pre-virus trend….Chinese stocks rallied amid strong economic data and on hopes of warmer U.S.-China relations under “Wrong Way” Biden…In an early test case for U.S.-China relations, China’s three biggest telecom companies appealed the New York Stock Exchange’s recent decision to delist their U.S.-listed shares, a move that is expected to receive a response within 25 days. On the coronavirus front, China now has 22 million people under lockdown as officials try to contain a recent outbreak in Hebei Province.
Enjoy this Week’s Round-Up;
Don’t Be a Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !