Market Recap Week Ending February 12

Monday – Dow +237 to 31,385 (record close) Nasdaq +131 to 13,987 (record close) and the S&P +28 to 3,915 (record close). The market cheered Janet Yellen’s recommendation of the Biden administration’s stimulus plan over the weekend. The newly minted Treasury Secretary said if passed, the economy could return to full employment by 2022. In addition, both houses of Congress passed budget resolutions on Friday that began the reconciliation process that would allow the stimulus plan to pass with a simple majority vote in the Senate…Energy was on a tear today (+4%) as it has been for the year (+16% YTD) and led ten of the eleven S&P sectors higher. Small cap has also been an outperformer for the first few weeks of the year, with the Russell 2000 index up 15.9% YTD…The US 10-year Treasury yield traded just off of a yearly high at 1.15% which helped the banking and financial sectors…Take-Two Interactive Software (TTWO) beat numbers and raised guidance and yet the stock traded down 5% in after-hours trading…Simon Property Group (SPG), American’s largest mall owner, announced weaker numbers than a year ago along with lower occupancy and yet the stock traded up after hours on the CEO’s comments that this year would be better than 2020…Tesla (TSLA) announced a $1.5 billion investment into Bitcoin, pushing the cryptocurrency to a new high of $47,031/coin. The auto/battery/solar company also announced that they would begin accepting Bitcoin as payment for their products in the near future…In a worrisome development on the Covid front that bears watching; South Africa has suspended usage of the UK approved (but not FDA approved) Oxford/AstraZeneca (AZN) Covid-19 vaccine as it is not providing protection against mild to moderate illness for those infected with that country’s dominant strain of the virus, 501Y.V2 (also known as B.1.351). However, the AZN vaccine is showing promise against the dominant variant version of the disease in the UK, B.1.1.7, which is also quickly becoming the dominant strain here in the United States….

Tuesday – Dow (10) to 31,375 Nasdaq +20 to 14,007 (record close) and the S&P (4) to 3,910. A slow day on the street saw the Dow and the S&P hit intraday highs before finishing in the red but the Nasdaq set yet another closing record. Six of the eleven S&P sectors traded higher, led by Real Estate and Industrials. Energy, scorching hot since the beginning of the fourth quarter last year, was the worst of the sectors today, trading down 1.5%…Cisco Systems (CSCO) reported better than expected top and bottom-line earnings numbers but traded down 5% post-close as their biggest busines, infrastructure platforms continues to struggle…Twitter (TWTR) beat numbers easily and traded up 2% post-close…Lyft (LYFT) lost less than expected on better revenues and traded up 11% despite missing on its ridership numbers…Some promising news regarding the South African B.1.351 Covid-19 variant; in a study of the effects of the Pfizer/Moderna vaccines on people who have recovered from original Covid, a single dose of these mRNA type vaccines generates a strong immune response against the South African B.1.351 variant….

Wednesday – Dow +62 to 31,437 (record high) Nasdaq (35) to 13,972 and the S&P +6 to 3,916. While all three indices logged intraday highs, only the Dow was able to sustain its record. The inflation report came out today and while energy rose 3.5%, core inflation, which excludes food and energy was flat. Fed Chairman Jerome Powell’s stated that the labor market is nowhere near where it needs to be and as such monetary policy will continue to be accommodative…General Motors (GM) reported better earnings on inline revenues, but their guidance was extremely conservative, faulting a global chip shortage. The stock traded down 1.2% after hours…Coca Cola (KO) beat earnings but missed its revenue estimates and traded down slightly post-close…Uber (UBER) traded down nearly 5% post-close after losing less money than expected but revenues missed expectations….

Thursday – Dow (7) to 31,430 Nasdaq +53 to 14,025 (record close) and the S&P +0 to 3,916. Jobless claims totaled 793k last week vs expectations of 760k claims but improving vs last week’s upwardly revised number of 812k claims. Seven of the eleven S&P sectors traded down with energy in the rearguard, down 1.5% and Tech leading the gainers, up 1%…Disney (DIS) jumped more than 2% after the company reported great earnings numbers and 95 million paid subscribers to it’s Disney + streaming service….

Friday – Dow +27 to 31,458 (record close) Nasdaq +69 to 14,095 (record close) and the S&P +16 to 3,934 (record close). The Biden administration’s announcement that it will purchase sufficient Covid vaccines in order to inoculate all 300 million adults in the U.S. sent all three indices to new highs. The reopening, economically sensitive stocks and sectors led the rally with Energy and Material up 1.4% and 1.02% respectively. Real Estate and Utilities were the only two sectors that traded in the red today…The administration also announced that the federal government will ship 1million doses of vaccine to 6500 pharmacies distributed around the nation….

The week in review…Dow 310 or 1% Nasdaq 239 or 1.7% and the S&P 48 or 1.2%. It will be a short weekly summary. Earnings were good, another $1.9 Trillion in stimulus appears to be on track, the Fed continues to be accommodative, and thus all three indices set multiple records this week. Next week all eyes are on whether we will get an EUA from the FDA for Johnson and Johnson’s (JNJ) Covid vaccine (it could come at any time). Obviously, the new variants in South Africa and the UK bear watching as well. The market is closed on Monday in observance of President’s Day.

Earnings we are watching next week…

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