Monday, January 4, 2021 – DIA 302.32 -1.13%, QQQ 309.31 -1.41%, SPY 368.79 -1.36%
Markit Manufacturing PMI was released at 57.1 vs. the prior 56.5 (above 50 denotes expansion). At the opening, the major indexes opened higher to greet the New Year of trading. But as news of increased infection rates, a new strain of COVID-19, and lockdowns the markets ended the day in the red. News over the weekend that a group of Senators and Congressman would object to the Electoral College certification on the 6th appeared to add pressure as well. FLIR Systems (FLIR) 52.24 +19.19% agreed to an 8 billion dollar cash and stock acquisition by Teledyne Technologies (TDY) 362.39 -7.55%. Walgreens Boots Alliance (WBA) 41.40 +3.81% having found support on its 50 day moving average advanced on heavier volume and a large bar. Gold ETF (GLD) 182.33 +2.23% gapped up on the open and traded higher then settled near the high of the day. But the miners did even better. Miners ETF (GDX) 38.51 +6.91% and Junior Gold miners ETF (GLDJ) 58.05 +7.02% both advanced. Commodity companies did well too. Copper company Freeport –McMoRan Inc. (FCX) 27.14 +4.30%. On the downside, the cruise line companies, Norwegian (NCLH) 23.72 -6.69%, and Carnival (CCL) 20.38 -5.91% both dropped on the virus news.
Tuesday, January 5, 2021 – DIA 303.84 +.50%, QQQ 311.86 +.82%, SPY 371.33 +.69%
ISM Manufacturing PMI came in strong 60.7 vs. 56.6 expected, and up from the previous 57.5%. ISM Employment was also 51.5 v. 50.7 expected. Prices Paid 77.6 v. 65.7 expected. But New Orders suffered and fell below expectations due to bottlenecks in current deliveries 67.9 v. 74.8. The energy sector was focused on two events. Iran seized a South Korean freight ship and Saudi Arabia unilaterally announced a 1 million barrel per day oil production cut. Both news items saw WTI trade north of 50 dollars. Halliburton (HAL) 20.41 +8.39%, EOG Resources (EOG) 53.92 +8.14%, Devon Energy (DVN) 17.36 +7.63%, Hess (HES) 56.54 +7.08%. In the technology sector, Intel (INTC) 50.61 +1.89% continued its rally from the prior week.
Wednesday, January 6, 2021 – DIA 308.21 +1.44%, QQQ 307.54 -1.39%, SPY 373.55 +.60%
ADP employment change disappointed with a negative -123K vs. +88K expected. Markit PMI Services disappointed coming in at 54.8 vs. 55.3 consensus. But US Factory orders were better than expected at +1% vs. .7%. FOMC minutes were released with no unexpected changes. Advancing issues vs. declining issues were solid. Financials ruled the day with both the money center and regional banks in the lead. In the Dow, Goldman Sachs (GS) 285.55 +5.40% led. Regionals banks did even better for example, Key Bancorp (KEY) 18.16 +9.73%, Fifth Third (FITB) 30.26 +9.6%. Potential infrastructure spending plays did well also, Caterpillar (CAT) 193.86 +5.57%. Technology stocks, some of which had big gains in 2020 got hit (talk of capital gains taxes being raised in the new Congress), Apple (AAPL) 126.60 -3.37%, Microsoft (MSFT) 212.25 -2.59%, Salesforce.com (CRM) 216.15 -2.42%.
Thursday, January 7, 2021 – DIA 310.5 +.74%, QQQ 314.98 +2.42%, SPY 379.13 +1.49%
ISM Services PMI posted better than expected 57.2 vs. 54.6 up from the prior number. Initial Jobless claims came in better than expected but continued very elevated 787K vs. 800K. Continuing claims were better but again remained elevated 5.072M vs. 5.2M. ISM new orders showed better 58.5 v. 54.9. Markets were focused on the fallout from the breach of the Capitol building by rioters the previous day. The major markets closed at an all-time-highs on good breadth. Walgreen’s Boots Alliance (WBA) 45.26 +5.18% led the Dow. 3M (MMM) 169.72 -2.57% suffered a downgrade by BofA securities. DXC Technology (DXC) 28.91 +9.3% released a statement saying a French consulting group Atos was interested in buying the company.
Friday, January 8, 2021 – DIA 311.04 +.17%, QQQ 319.03 +1.29% SPY 381.29 +.58%
Non-Farm Payrolls came in far worse than expected with a contraction 0f -140K vs. an expected gain of 71K. The unemployment rate was steady at 6.7%, and there was an additional improvement in the U6 underemployment number which fell to 11.7% vs. the prior level of 12%. The market was weak for most of the day as more rancor over the breach of the capitol building became evident, but rallied to close positive by the end of the day. Chinese artificial intelligence firm Baidu (BIDU) 240.25 +15.57% as the company confirmed speculation it would enter the smart electric vehicle market, additionally, it had a price target raised to $250 by Mizuho Bank. New Relic (NEWR) 75.18 +15.77% announced a management change. On the downside Sarepta Therapeutics (SRPT) 82.29 -51.29% was hit hard on news a drug in development for a form of Muscular Dystrophy failed to meet its primary endpoint.
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