S&P 500 ends down after rallying to best November ever

Today’s 271 point drop in the Dow was attributed among other things to a sell off from the substantial November rallies, month-end rebalancing of portfolios as the rotation from growth to value continues, and a lower than expected brick-and-mortar holiday shopping weekend, though online sales broke records. But there also can be no doubt that it was also a pandemic on/vaccine off day as the market grows more cautious about the spike upon the spike that’s experts predict in the weeks leading to Christmas due to an abundance of Thanksgiving travel (though it was less than half the usual holiday travel so more Americans than not still heeded the CDC travel advisory.)  Volume was way up at 15 billion but cannot be trusted since it was artificially elevated due to the end-of-month rebalancing. We’ll get a better picture tomorrow when we’ll also get more clarity from the Fed.  

Succinct Summation of Week’s Events for 11.27.20 (plus The Strange Last Days of Steve Bing)

Below is the weekly summation after this long holiday weekend. The main positive is that, three weeks after the election, the Biden transition has officially now begun, hopefully clearing the way for a smoother than expected transfer of power. The main negative is that a relief bill is still not forthcoming leaving a record 26 million Americans without funds to buy even essential basics like food. This weekend I could only find downbeat articles about the growing pandemic and the post-election chaos. 

The Complete Berkshire Hathaway Portfolio

For your weekend reading I once again offer the latest edition of U.S. News Invested, which this week contains the detailed rundown of the 47 holdings in Warren Buffett's portfolio. I'd say that a review of these 47 frames would be well worth anyone's time. Enjoy the final day of this very pleasant holiday weekend before the ravages of winter set in on Monday.  

Wall St. gains, Nasdaq hits record high as holiday shopping begins

Black Friday turned out to be a surprisingly mixed day of both pandemic worries and vaccine optimism as Britain gave AstraZeneca the thumbs up despite questions over their trial data and Black Friday sales, though tarnished, still reached a record for online sales. This was balanced by the Nasdaq closing at a record high boding well for a good December market while hospitalizations also set a record at over 89,000.  So there was plenty of up and down with the close up a very modest 37 points. Given the holiday and a short Friday session, volume was quite light at 6.8 billion. 

Medicare Pandemic Changes

Happy Thanksgiving everyone and, if there's one thing that we can all be thankful for in this pandemic year is that we all still have our health (and hopefully none of you who are reading this have tested positive).  In the spirit of this and the major objective of keeping our health, I thought it appropriate on this Thanksgiving to share today's edition of the PBS program WealthTrack, which bring us all up to date on the status of Medicare (for all us retirees) in this pandemic age.  Enjoy the remainder of your long holiday weekend.  

Stocks dip on U.S. jobs data; dollar down, oil up

After two days of vaccine optimism the markets reverted back to pandemic worries when investors considered the downside of Yellen as Treasury Secretary (good funding = bad dollar) and some negative economic news on the surprising jump in jobless claims and unemployment. And with the daily COVID-19 death toll exceeding 2,000 for the first time since May, the Dow dropped 173 points. Volume, though a little below the already substantially elevated 4-week average, was nonetheless also, at nearly 10.8 billion, considerably higher than we usually see prior to a major holiday. Happy Thanksgiving everyone! We’re getting a day off from watching those charts. 

Dow scales 30,000 on vaccine headway, Biden transition

The Dow went past 30,000 today for the first time in history, soaring 454 points due to a second day of vaccine optimism and a greenlight to begin the Biden transition, two major steps toward relieving market uncertainty on the pandemic and election. For the second day there was the hoped for rotation from the pandemic-safe tech stocks to the more sensitive cyclical stocks, signaling a positive outlook for 2021. As summed up by today’s expert, “If 2020 has shown us anything it is that stock markets have a tremendous ability to look past bad news if there is sun on the horizon.” At nearly 14.2 billion, volume was huge.

Cyclical gains lift stocks, Yellen news gives brief boost

The market has been wavering back and forth between pandemic worries and vaccine optimism. Today was a vaccine trade day with all three indexes in positive territory, the Dow up 327 points. Two big boosters: Astra Zeneca announced a third vaccine, this one 90% effective, and Biden announced Janet Yellin as the new Treasury Secretary creating new optimism for the next stimulus package which Mnuchin dampened last week. Overall, it was another major move from the pandemic-safe tech stocks to the more cyclical value stocks, and any moves along those lines reflect optimism for a recovery. Volume will be lighter than usual this week due to the holiday – but not today, going above the 4-week average at 12.1 billion shares traded.  

Succinct Summation of Week’s Events 11.20.20 (plus The Biggest Stock Market Reversal In History)

Below is the end-of-week weekly summation, the main positives being vaccine progress and an all but exhausted panoply of election litigation options. The main negatives remain the spiraling infection and death rates combined with Trump's unprecedented efforts to overturn the vote. The bonus this Sunday night is a very instructive graphic posted today on The Big Picture blog showing the historical relationship between intrayear drawdowns and yearly returns. Even though the two usually correlate (that is big drawdowns translate to big negative returns), this chart shows the years since 1929 when they did not correlate.  And 2020 is at the top of the list.  It's the biggest stock market reversal in history. And welcome to winter as we just had our first measurable snow for the year. It's still too early to put on the snow tires though. 

WINNING THE LOSER’S GAME

For your weekend reading pleasure I once again submit this week's segment of the PBS program Wealth Track, hosted by Consuelo Mack. The topic this time is, in a word, "timeless," as she discusses Timeless Investment Strategies with one of Wall Street's foremost experts on the subject, Charles Ellis. His thesis is that investing can be simple and the 7th 2017 edition of his book, "Winning the Loser's Game," tells all about it. The 8th edition will be available next May.  You can start with this book, or you can start with this 25 minute program.  Enjoy the weekend.  

Wall Street closes lower as surging COVID-19 cases offset vaccine hopes

For a fourth day pandemic worries overshadowed vaccine optimism as the Dow took a dive straight down all day ending the session 219 down with the consensus remaining that “this is likely to continue until we have an approved and distributed vaccine.” Adding to the day’s anxiety is a tug of war triggered by Mnuchin between the Fed and the Treasury over relief lending, Mnuchin announcing that he will expire the Fed’s lending programs at the end of the year. These two institutions are supposed to work together rather than compete and could have “serious implications.” Another tough news item was the WHO advising that remdesivir should not be used as evidence of its effectiveness is lacking. Volume remains high and exactly in line with the 4-week at 10.7 billion. 

Wall Street closes higher as new stimulus talks ease shutdown worries

The Dow spent most of today’s session almost 150 down as once again spiraling pandemic and shutdown worries dominated vaccine optimism, though late in the session there was some added hope when news came from the Congress that stimulus negotiations could begin again soon, which in turn sent the market back up again to close 44 up. But investors today once again fled the value scene and transferred wealth back to the ever reliable tech sector, the only sector not to be overly impacted by shutdowns. But rising unemployment and a hospitalization rate soaring by a whopping 50% kept a predictable lid on things. 472 S&P companies have now reported in for Q3 and nearly 85% have beaten estimates. Volume remains very brisk at nearly 11 billion. 

Wall Street dives as shutdown worries overshadow vaccine hopes

For the second day, virus worries have overtaken vaccine optimism with the Dow spiraling downward 344 points. This is despite the fact that Pfizer, following Moderna’s really good news, had its own good news that the latest tests for its vaccine show that it’s also 95% effective. But the scales tipped toward the virus today with the news of record levels of infections and continuing lockdowns. Q3 is almost over. 468 companies of the S&P 500 have now reported with almost 85% beating estimates. Volume was again quite high and above the 4-week average at 11.4 billion.  

Wall Street closes lower as shutdown worries loom

It didn’t take a Warren Buffett to predict that consumer spending would be down in the midst of this raging pandemic with no stimulus in sight. Yet when the Commerce Dept released its retail sales report today showing spending decelerating, it nevertheless sent the markets decelerating. So much for these things already being priced in. And the consensus is that we’d better get used to this up and down, this flip-flop. Until the vaccine is rolled out and is proven effective, the market is going to be “vaccine versus the virus.” Q3 is wrapping up with 465 companies now reporting and nearly 85% beating estimates. And despite today’s retail sales report, giant retailers Walmart, Home Depot, and Kohls all turned in glowing reports. Volume remains high at nearly 10.5 billion. 

S&P 500, Dow close at all-time highs on reignited vaccine hopes

It was another big 3-digit day as Wall Street bet on a 2021 that would be post-pandemic given the breaking news of now a second vaccine from Moderna that looks even more promising than the Pfizer vaccine announced last week. Yet despite the long-term outlook, there remains serious concern of this enormous new spike and the damage it could do to the economy before we are in the post-pandemic period six to twelve months from now. But on optimism that could be a full year coming, the Dow jumped 470 points. Tuesday we get the retail sales data which will tell us how the consumer is doing in this withering recovery sans a new stimulus package. Volume was strong at 10.9 billion. 

Succinct Summation of Week’s Events 11.13.20 (plus the AAII on Dollar Cost Averaging)

Below is the usual weekly summary, the main positives being the new vaccine proving 90% effective and subsequently the markets continuing to move higher. The main negative as always is the record high levels of COVID that just continue to move higher. The bonus this Sunday evening is a revisit of an AAII article I missed last month but rediscovered this weekend, all about Dollar Cost Averaging as an investment strategy, one of my personal favorite strategies that has always proven to not only be very easy but also very low risk and reasonably profitable. It's a good review for those of you already familiar; an essential primer for those who are not.  We ended the weekend with some horrible weather but looking for better in the week ahead.  Enjoy the week ahead. 

Recording of AAII Seminar on O'Neil by Amy Smith 11/10/20

For those of you who missed it, for those of you who attended but may not have received the YouTube link, below is the recording of the Amy Smith Zoom seminar on O'Neil as given by the AAII at the meeting this week 11/10/20.  It was scheduled for 2 hours but she actually managed to encapsulate the entire IBD approach to investing in just one. 

S&P boasts record close with earnings reports adding to vaccine fueled optimism

For some time now, vaccine news has been driving the market. Yesterday was the exception when there was no news, good or bad, that satisfied anyone. But today we got back to the normal routine that vaccine news is driving the market and that combined with good earnings news propelled the Dow up another 399 points. The spurt back into the conventional sectors of energy, real estate, and industrials was a clear indication of “optimism around the economy.”  It also pacified investors with the Biden news that there are no plans for a national lockdown in 2021.  Still, the sentiment remains (as validated today by the Fed) that the spike in COVID cases will damage the economy unless there is a suitable stimulus package. The good news is that 90% of S&P companies have reported now for Q3 and the profit estimates are now for a 7.8% contraction rather than the 21.4% forecast in October. Volume was right in line with averages with nearly 9.9 billion shares traded. 

Wall Street ends sharply lower as pandemic fears resurge

Once again there was a major sell off as the markets grapple with the reality that the vaccine is still a ways off and, meanwhile, there’s a raging pandemic to deal with.  All sectors lost, tech and value together, as investors cope with “the reality is that we don’t know what the new normal is going to look like.”  The Dow sank 317 with the Nasdaq and S&P also plummeting. The good news is that, despite the day’s drop, the week has been kind with the S&P gaining almost 2 percent this week.  (And perhaps the news tonight of Moderna’s promising new treatment was announced after the closing bell; perhaps then a rally tomorrow?) 10.3 billion shares changed hands putting volume on par with the elevated trading that’s been going on the past four weeks. 

Nasdaq closes higher with technology stocks back in favor

It was a seesaw day, up a hundred for much of the day, then down a hundred in late session, then recovering to close down a very modest 29 points. The trend of the last two days to abandon the glitzy pandemic tech stocks in search of value got reversed today as investors scrambled to get back into tech and growth with the sentiment being that “we’ll probably have these fits and starts of the rotation until we get into the spring.” There remains greater optimism for the longer view of the economy post pandemic.  The chip index rallied 3.7% while the value index lost ground. Volume, though sharply down from the last two days, was still very much in line with the 4-week average at 9.6 billion. 

Nasdaq retreats as technology stocks lose favor

For the second day, with the good news regarding the presidential election being settled and a promising vaccine on the move, the market again responded by enthusiastically moving away from the pandemic-benefiting tech stocks to the more traditional value stocks.  The sentiment is that if the economy can reopen sooner rather than later the “stay-at-home” stocks won’t be as valuable. Amazon, Facebook and Microsoft all fell while the S&P value index gained 1.3 percent. Investors have by and large been ignoring Trump’s election outcome complaints. The only downside to the news is that the vaccine progress dims the prospects for another multi-trillion dollar relief bill, something small businesses and the unemployed desperately need.  With the Dow boosted another 262 points, volume was again way above average at 12.6 billion. 

Wall Street rallies on coronavirus vaccine trial results

With the elimination of election uncertainty over the weekend, I knew there was going to be a rally today but had no idea it was going to be in the quadruple digits. Up over 1300 points as late as 2 pm, the Dow settled in the final two hours to still close a whopping 834 up. It was the double boost of the Biden victory combined with what was arguably even better news about some terrific promise on the vaccine front as Pfizer announced their new vaccine had tested very well and would be ready for distribution by the end of the year. With the worst case scenario suddenly now looking quite a bit less likely, buying soared, especially with all the traditional stocks that had been taking a beating during the pandemic. Conversely, the tech stocks that had been doing well during lockdown now took a hit as reflected in the Nasdaq diving 181 points. And the end of the day dive was only the result of McConnell saying that election investigations would continue. But the stocks hardest hit in the last nine months (i.e. airlines and cruise lines) all surged, Carnival up over 39 percent. The best news is that volume was enormous at 17.2 billion. 

Succinct Summation of Week’s Events 11.6.20 (plus Working With William O'Neil)

After this extraordinary week, below is the summation, the main positive being the strong rally the markets had, the main negative that, at least as of 4:30 p.m. Friday when this was published "WTF, this still isn't over yet?"  Alas, a mere 19 hours later it was over and we should see relief sweeping the markets Monday since the biggest fear was that it wouldn't be over. The big bonus this Sunday night is a final heads-up on the free AAII Zoom webinar "Working With William O'Neil" that takes place this Tuesday night 11-10-20 from 7-9 pm.  You must be registered to view it. I will try to do a Screen Record from my video editing software and, if it's not made available by the AAII on YouTube (which it probably will be), I will put it up on YouTube myself if I can get a good recording.  Stay tuned. 

Powerful Macro Forces

This week's edition of the PBS program Wealth Track is a pretty good summary of how this week's election has impacted and is expected to continue to impact the markets.  

Wall Street ends little changed, posts big weekly gain on Washington gridlock hopes By Chuck Mikolajczak

There was a 200 point sell off right out the gate (profit takers?) that almost immediately reversed itself as buyers came back into the picture for a third consecutive day of optimism that the tight election will result in a divided Congress that will make it difficult for a President Biden to pass large parts of his agenda. However, this all depends on the Republicans keeping the Senate and there could still be major surprises up ahead if the Democrats prevail in the four undecided races, something currently considered improbable but not at all out of the realm of possibility. Unemployment dropped sharply in October to just under 7% but job recovery remains painfully slow in the absence of fiscal support. After the early morning sell off, the Dow gained steadily all day to close at 66 down and volume remains unusually high at just under 10.4 billion. 

Wall Street rallies on bets for divided U.S. Congress, Fed holds steady

For the second day, the markets continue to take solace in the tight election as a forecast of a divided Congress in which the economic and business status-quo will remain essentially unchanged. That’s what investors want, for the markets to keep going the way they’ve been, hopefully get more stimulus, definitely keep the Fed’s monetary policy loose. Tech and industrials will continue to be winners.  So for the second day, there was a big boost, today 542 points on the Dow. The Nasdaq gained over 2% coming close to its September record; the S&P was boosted by a 4.4% surge in the tech index. Volume was way above the 4-week average at 10.4 billion.  

Stocks jump as Wall Street thinks tight U.S. election means gridlock

Even though a quick decisive outcome has been the market’s Wish #1 for some time now, investors actually took comfort today in the tightness of the race.  Translation: a divided congress means no major policy changes. A Biden presidency would likely see a similar economy with the same winners as before. Thus the Dow bolted up, some 700 points shortly after noon but then settled to close 367 up.  The session saw the biggest daily percentage gain in the S&P since June 5 and for the Nasdaq since April 14.  There was also the usual boost from a prompt outcome triggering an expected new stimulus deal. The VIX is now at a two week low and volume was considerably above average at nearly 10.4 billion. 

Wall Street closes sharply higher on U.S. Election Day stimulus hopes

The polls had only been open for 2-1/2 hours when the market opened and the fact that everything was going peacefully and smoothly for the most part boosted confidence. There is the sudden added confidence that results may be known sooner than expected and that a quick resolution heightens the likelihood of a swifter stimulus deal bolted the Dow up 554 points. The VIX even hit a one week low. Investors are already starting to feel more relaxed. Volume was pretty much in line with the 4-week average at 8.9 billion. 

Wall Street rises but market braced for choppy week on eve of U.S. election

With all the volatility that’s expected this week, combined with the markets last week having their biggest decline since March, investors jumped on the band wagon to buy on the dip and pushed the Dow up 423 points. This may be the last rally until a victor is declared, an outcome considered very unlikely for tomorrow. But for those who are bettors, the ones going for a Biden victory boosted solar stocks and smalls caps while the Trump bets went to the financial sector.  But Clorox had a good day having their best sales growth in two decades during Q3. There was such a huge demand for their products that bleach and wipes were constantly sold out.  I can personally testify that I had to wait until June before I was able to purchase a Clorox product. They couldn’t get them out of the factory fast enough. But it’s going to be a tough week. Brace for more dips. Volume at 9.0 billion was almost exactly in line with the 4-week average. 

Succinct Summation of Week’s Events for 10.30.20 (plus Inside the Wild Stock Market)

It's Sunday night and below once again is the weekly summation, the main positives that Q3 GDP growth rising 33% (after falling 31.4% in Q2, so we're even again) and early voting setting records. The main negatives, as always, are the COVID spikes which this week includes the new lockdowns in Europe and the worst weekly market sell off since June.  The bonus this Sunday night is a prescient article from Medium that offers an explanation for the crazy stock market ride we're on and how election junkies can turn it into profits.