Monday, November 30, 2020 – DIA 296.62 -.88%, QQQ 299.62 +.20%, SPY 362.06 -.44%
Chicago PMI was 58.2 vs. 59 expected. Pending home sales came in -1.1% vs. an expected up 1% (some analysts pointed to a tight inventory of homes available). The market remained overbought on several measures, i.e. Sentiment as measured by CNN Fear & Greed index. Reports circulated that the Trump administration might place several Chinese manufacturers on a no-trade list. Chinese retailer JD.com (JD) 85.35 -4.52% and Chinese communications company NetEase (NTES) 90.37% -3.18% reacted to the news and were hit hard. Moderna popped (MRNA) 152.74% +20.24 % as the Drug maker moved to have its vaccine approved by the FDA. The energy sector (XLE) 36.76 -5.53% continued under big profit-taking. EOG Resources (EOG) 46.88 -8.85%, Pioneer Natural Resources (PXD) 100.58 -8.62%, Diamondback (FANG) 39.96 -8.18%.
Tuesday, December 1, 2020 – DIA 298.44 +.61%, QQQ 303.46 +1.28%, SPY 366.02 +1.09%
ISM Manufacturing PMI came in as light @ 56.5 vs. 58 expected. The Markit Manufacturing PMI reported numbers meeting the expectations of 56.7%. However, The Markit Manufacturing Employment index disappointed at 48.4 vs. 51.4 expected. Under 50 is contraction. The Markit Manufacturing Prices Paid came in higher (Inflationary) at 65.4 vs. 65. The Markit Manufacturing New Orders index was very strong at 65.1 vs. 53.4 expected. Traders and investors continued to focus on the 2 most ready vaccines for COVID-19 as well as talks about delivering much-needed stimulus. Up big on the day were Tech names Western Digital (WDC) +5.33%, & Micron (MU) 67.08 +4.67% which raised fiscal 1st quarter guidance. Down big on the day were pandemic beneficiaries Zoom (ZM) 406.31 -15.06% and Etsy (ETSY) 154.67 -3.75%. Energy stocks (outperformers in November) continued under profit-taking; Apache (APA) 12.37 -4.03%, and Occidental (OXY) 15.13 -4.00%.
Wednesday, December 2, 2020 – DIA 299.18 +.25%, 303.85 +.13%, SPY 366.79 +.21%
ADP Employment Change for November disappointed +307K vs. 410K expectation. UK regulators approved the COVID-19 Vaccine by Pfizer (PFE) 40.80 +3.53% with partner BioNTech (BNTX) 121.09 +6.21% The markets ended slightly positive but quiet tape on the day. Boeing (BA) 223.85 + 5.09% continued its rally after the re-approval of the 737-Max jetliner and continued optimism an imminent vaccine will release pent up demand to fly and travel again soon. NetApp (NTAP) 59.23 +9.32% surged on an improved profit forecast and bullish guidance leading to an upgrade by 5 investment firms. Potential vaccine beneficiary drug store chain Walgreens Boots Alliance (WBA) 39.84 +3.59% pivoted and was higher after coming out of a pullback from a recent high of 44.87. Walgreens is set to be a major outlet for the distribution of the vaccines. Energy sector names traded higher on reports of better distillate pricing and higher oil prices in general, Chevron (CVX) 89.87 +2.77%, Valero (VLO) 58.07 +6.75%, Apache (APA) 13.11 +5.98%. OPEC meeting got underway with talk of limiting output. Business software company Salesforce.com (CRM) 220.78 -8.52% disappointed on earnings and received criticism for overpaying for Slack Technologies (WORK) 42.71 - .25% and was downgraded by Citigroup.
Thursday, December 3, 2020 – DIA 300.86 +.29%, QQQ 304.28 +.14%, SPY 366.69 -.03%
ISM Services PMI for November printed 55.9 vs. 56 expected. Continuing Jobless Claims came in much better than expected 5.52M vs. 5.915M. Initial Jobless claims did so as well 712K vs. 775K expected. ISM Services New Orders for November came in far ahead of expectations 57.1 vs. 49.6. ISM Prices Paid showed 66.2 vs. 61.6% (Inflationary). The market appeared to be consolidating its recent gains after a blowout historic month in November, although with demonstrated rotation. The day’s disaster du jour was office software company Splunk (SPLK) 158.03 -23.25% which surprised the street and reported a wider than expected loss, causing a cascade of downgrades by no less than 6 investment firms. Walgreens Boots Alliance (WBA) 42.82 +7.48% continued its rally on vaccine imminent Vaccine distribution. CVS Health (CVS) 72.52 +4.15% rallied as well, as CVS Pharmacies are also due to be a prime venue for Covid-19 inoculations. Grocery store chain Kroger (KR) 30.88 -4.37% disappointed on earnings and guidance.
Friday, December 4, 2020 – DIA 302.59 +.84%, QQQ 305.52 +.41%, SPY 369.85 +.86%
Non-Farm Payrolls for November came in far lower than the anticipated with +245K vs. an expected +469K. Labor force participation rate disappointed 61.5% vs.61.7% expected. The U6 measure of people not fully employed was 12%, the last reading was 12.1%. The Unemployment rate declined to 6.7% and in line with 6.8% expected. Factory orders were better than expected but still muted on the production front +1% vs. +.8%. The market was quiet on the news front but positive on the day. Energy (XLE) 40.63 +5.45% was the leading sector on the day. Oil names Breaking out and Surging to Fresh 5-month Highs; Occidental (OXY) 18.59 +13.42%, Diamondback (FANG) 47.22 +12.67%, Marathon (MRO) 6.85 +10.66%, Apache (APA) 15.18 +10.48%. EOG Resources (EOG) 53.00 +10.03%. Technology stocks continued to power ahead, laggard Western Digital (WDC) 51.75 +6.75% powered up and out of a 9-month base. Market leader QUALCOMM (QCOM) 157.62 +5.14% hit new highs after a week of consolidation. The only demonstrable sector showing weakness was utilities (XLU) 62.41 -1.00%.
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