Market Recap Week Ending January 1
Monday – Dow +204 to 30,403 (new record high) Nasdaq +94 to 12,899 (new record high) and the S&P +32 to 3,735 (new record high). All three indices set new all-time highs as the markets reacted to the signed stimulus bill. Nine of the eleven S&P sectors traded higher in the broad-based rally with Communication Services, Consumer Discretionary and Technology leading the way. Energy and Materials were the two laggards today…Intrigue in Washington; today the House passed, with support from 44 GOP members, an amendment to the stimulus bill to increase the direct payment checks to $2000 from $600. The Senate will vote on the matter on Wednesday if the Senate Majority Leader, Mitch McConnell (R-KY) allows it to come to a vote. Senator Sanders (I-VT) has vowed to block the veto override vote on the NDAA (National Defense Authorization Act) unless a straight up or down vote for the increased direct payments is allowed to proceed. This Senate showdown could keep the Senate in session through New Year’s Eve and New Year’s Day which would be very undesirable for the two Georgia Senators facing a runoff election on January 5th. Stay tuned.
Tuesday – Dow (68) to 30,335 Nasdaq (49) to 12,850 and the S&P (8) to 3,727. Despite the House’s vote for additional direct payments last night, all three indices took a collective breath today and consolidated. Nine of the eleven S&P sectors traded down today. The worst of the laggards was Real Estate, Industrials and Energy. The two positive sectors were Health Care and Consumer Discretionary…Intel (INTC) had a huge day, up +4.93% on news that activist hedge fund, Third Point, had accumulated a large stake and would be pushing for immediate change…UK regulators approved the Oxford-AstraZeneca Covid19 vaccine late tonight. The two dose vaccine is cheaper than those from Pfizer/BioNTech (PFE and BNTX) and Moderna (MRNA) and does not require ultra low temperatures for storage as do the other aforementioned vaccines…Showdown in Washington; with the President tweeting support for direct payments of $2000 per person, Senate Majority Leader, Mitch McConell (R-KY) blocked a straight up and down vote on the additional monies. Senator Sanders (I-VT) has threatened to filibuster the veto override vote of the NDAA unless a vote on additional support proceeds. Senator McConnell has now called Senator Sanders bluff and scheduled a vote on on the NDAA for late tomorrow afternoon. The Senate Majority leader will need unanimous consent to proceed. Otherwise, a vote most likely will not happen until Friday at the earliest on the NDAA. Support for the additional dollars of direct aid is growing within the GOP; Rubio (R-FL), Hawley (R-MO), Graham (R-SC), Perdue (R-GA), Loeffler (R-GA), and Fischer (R-NE) have all voiced support for the increased payments.
Wednesday – Dow +74 to 30,409 (record high) Nasdaq +20 to 12,870 and the S&P +5 to 3,732. Stocks rose on the good news coming out of the UK regarding approval of the Oxford/AstraZeneca (AZN) vaccine. Eight of eleven S&P sectors were positive led by Energy and Materials while the laggards were Communication Services, Consumer Staples, and Tech…Stimulus payments of $600 supposedly started hitting individual accounts last night…Washington Update; the standoff between Senator Sanders and Senator McConnell is playing out slowly. It will take a few days for McConnell to exhaust all of the procedural delays that Senator Sanders will erect but the Senate Majority Leader will be able to bring the NDAA veto override to a vote on Friday without bringing a vote on additional direct pandemic support to the floor of the Senate….
Thursday – Dow +196 to 30,606 (record high) Nasdaq +18 to 12,888 and the S&P +24 to 3,756 (record high). The Santa Claus rally continued on light volume on the last day of the year. Volumes were down about 15% from normal as many market professionals took the day off in advance of the holiday. Nine of the eleven S&P sectors were higher led by Utilities and Financials. Energy and Consumer Discretionary were the two sectors that traded down…Jobless claims dipped lower to 787,000, vs expectations of 833,000 and vs last week’s number of 806,000.
Friday – Markets closed in observance of New Year’s Day.
The week in review…Dow +407 or +1.3% Nasdaq +84 or +0.65% and the S&P +53 or +1.4%. The Santa Clause rally was alive and well this week. We shall see if it follows through on the first two days of the New Year, Monday and Tuesday.The short week was also on news. Jobless claims have improved two weeks in a row. Is that just from holiday hiring or is this an emerging trend with legs through the new year? The bright spot of the week was the approval by UK regulators of the Oxford/AstraZeneca (AZN) vaccine. This brings a third vaccine online and Johnson and Johnson’s is in Phase III trials. I think it is likely that by the end of February at the latest, we will have four vaccines to fight against Covid-19, which will greatly speed up the inoculation of the world’s population. The showdown in the Senate looks like it will prove to be much ado about nothing. The veto override vote should occur tomorrow unless the Senate Majority leader cannot whip 60 votes to enforce closure of debate. Most likely, it will be left to the next Congress to determine if they want to pass additional direct stimulus payments to the citizenry.
Happy New Year!!
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Disclaimer: This is not a recommendation to buy or sell any of the securities listed above. I personally, or a family member whose account I control, have positions in the following securities…AMZN, AAPL, Bitcoin (physical), Chainlink (physical), GBTC, GOOGL, LAZR, MSFT, NFLX, TSLA, and VLDR.