Succinct Summation of Week’s Events for 1.29.21 (plus Capitol Riot Arrests)

Below is the usual weekly summation, the main positive this week being that 27 million doses of vaccine have been given with a daily average of 1.2 million, the main negative being the market crashes of Wednesday and Friday, the worst since October. The bonus this weekend is a telling graphic that sums up in one eyeshot the overall national participation in the riot of January 6th. Of course, these are just the 116 arrests to date and there will be likely many more coming. But there is some consolation that so few people from each state were involved and that it even took an assemblage from most of the 50 states to put together that mob of one thousand. Hope everyone had a great weekend.  

8 Top Reddit Stocks Gaining Buzz

For your weekend, I submit below the other side of the great Wall Street Story of the Week -- the debacle with Reddit, GameStop, and the hedge funds, as presented by yesterday's edition of U.S. News Invested. I suspect that the SEC will ultimately determine that this group of so-called retail investors are not democratizing the market at all  but engaging in market manipulation. 

Wall St drops after J&J vaccine data, GameStop effect weighs

The “bad boys” buying up Gamestop were back in action again after Robinhood, among others, eased restrictions thus again crushing the hedge funds with their shorting issues and causing the markets to crash again, all of which is being investigated by the SEC for suspected stock manipulation.  Other factors contributing to the sell off include news casting some doubts on the upcoming J&J vaccine, the dangers of the South African variant, labor costs rising and consumer spending falling.  What is continuing to save the day is positive Q4 reporting with 84% of 184 companies now beating estimates.  Volume continues to spike with 17.1 billion shares traded. 

Wall St. rebounds as earnings heat up, short worries cool

As was easily predicted, there was a very quick recovery today of more than half of ysterday’s losses and a much more detailed explanation below for yesterday’s panic, far better than the simplistic “the Fed disappointed.”   It seems the sell off was due to a labyrinth of factors including fears of a poor Q4 and hedge funds dramatically increasing the sale of long positions in order to cover a dramatic increase in shorts.  But positive Q4 reports today, particularly from such heavyweights as Microsoft, Amazon and Alphabet, put those fears to rest, at least for the day.  But at valuations running now at 22.7x, this could change.  The really good news is that in an environment where positive surprises have come to be expected, for Q4 we are now seeing more than the usual.  With 159 companies having reported, 83% have beaten estimates and the latest government data shows Q4 GDP increasing 4 percent. Volume was again huge at nearly 19.6 billion. 

Stocks slump to worst day in three months in wake of Fed statement

Yesterday it was noted that expectations are so biased towards the upside right now that even the smallest hiccup can cause stocks to get slammed. It was really the smallest of hiccups that caused the biggest slam since October with the Dow diving a whopping 633 points and the other indexes not far behind. What was the hiccup? The Fed simply did not announce further stimulus for the coming month. Since no one expected them to, this should have not have caused any waves. But it did and was taken as a signal that with the slow rollout of the vaccine, Q1 is not going to go well.  There has of course been the continuing concern that stocks are way overvaluated and the markets are looking for Q4 cues to evaluate this. Even though no cues came today, the Fed statement (or lack thereof) sparked a massive sell off with the VIX at 37, its highest since October 30^th. Volume was completely off the charts at a massive 23.4 billion shares traded. I can’t remember the last time it was even near that.  But is there any doubt that in another day or two investors will realize this was a gross overreaction and rally again?  

S&P, Nasdaq slip from record levels as earnings season gains speed

The markets spent almost the entire session today in the black if only modestly so only to dip briefly and modestly into the red just minutes before close. Microsoft did well with its Q4 report after beating Wall Street estimates but the negative impact of the pandemic on such stalwarts as American Express and Verizon made their marks felt. Upside has become the expectation so any sign of weakness will see stocks getting slammed. But big eyes will remain on Q4 to see if the currently very high 22x valuations are justified. Volume remains above average at 14.3 billion. 

Stimulus jitters dent Wall Street's early gains; Nasdaq, S&P at records

It was another quite volatile day with the Dow down a good 400 points just before noon on concerns that the new stimulus bill may not pass for several more weeks. As today’s expert summed it all up, “stimulus – that is what it is all about. The market loves money, whether it is fiscal or monetary, and right now you have both. So if you pull the rug out from stimulus plans, that might be a problem, but they aren’t going to do that.”  The Dow rebounded in the afternoon to close down just 36 points and, once again, concerns about a quick recovery shifted buyers back to the “stay at home” tech winners. Microsoft will turn in its Q4 tomorrow and, besides the tech winners, the defensive sectors outperformed the day. Volume was back way above the 4-week average at just under 16.4 billion. 

Succinct Summation of Week’s Events 1.22.21 (plus a Financial To Do List for 2021)

Again I bring you the weekly summation, the main positive that there was indeed a smooth transition of power, the main negative of course being the 400K+ deaths from COVID.  The bonus this Sunday is again this week's edition of Consuelo Mack's WealthTrack program on PBS, the topic being something we can all use. Given the extraordinary changes we all witnessed in 2020, what adjustments should we be making to our Financial To Do List for 2021?  Consuelo gives us Part 2 of her interview with Morningstar's Christine Benz who tells us all about it.  Hope everyone had a great weekend.  

8 Virtual Reality Stocks to Watch in 2021

Is the future finally here?  I for one have been looking forward with rapt anticipation for Virtual Reality to become, well, an actual reality! But it never seems to quite get here. Aside from the incredible educational tools it would provide, allowing us to learn everything from auto mechanics to brain surgery, in this day and age of pandemic lockdown, the sky would be the limit as to the kind of marvelous virtual vacations one could take. So this week's edition of U.S. News Invested was quite encouraging that, pretty soon now, we may not only be able to go to a Best Buy and purchase some impressive headgear, but also some pretty incredible software to go with it.  One can only hope. See you on the beach in Tahiti. Enjoy the weekend. 

Dow, S&P close lower as IBM, Intel weigh, coronavirus concerns rise

The blue chip stalwarts failed us today sending the Dow and S&P down a bit, once again demonstrating that the optimism over economic recovery is waning, confidence in cyclicals diminishing and the pandemic love affair with tech continues unabated. Defensive sectors have advanced as they usually do on down days. Despite all this, manufacturing came in at its highest in more than 13 years and, for the week, all three indexes advanced as the Nasdaq posts its best weekly performance since early November. Of course, the one more credible explanation for all this that is usually pointed out but today remains unspoken, is that with valuations near a 20 year high, today’s losses could just be simple profit-taking as more Q1 results filter in. For the first time in a while, volume is very close to the 4-week average of 12.7 billion, though just barely beating it at 12.8 billion. 

S&P, Nasdaq close at record highs on optimism about Biden stimulus plan

For the second day the S&P and Nasdaq hit new record highs as investors continued the buying spree triggered by optimism that the Biden administration will produce more pandemic relief.  As COVID surges, the markets are going back to the old playbook of buying tech. The Dow was up and down a hundred points in each direction before dropping to break-even minutes before close. Data showed housing and manufacturing doing well and showing strong momentum going into the year.  2021 S&P earnings are expected to be up 24% vs the 15% drop in 2020.  But much of this will be under review as Q1 proceeds with the markets closely scrutinizing whether valuations, currently near a 20 year high, can be sustained. Volume continues above average at 13.3 billion. 

Wall Street closes at record highs as Netflix jumps, Biden inaugurated

Netflix turned in a glowing Q1 report which in turn sparked a buying spree in all the pandemic-supported tech stocks, shooting the Dow up 257 and the Nasdaq 260.  With tech having a rare good day of outperformance, the market is concluding that the tech run is being extended. Biden started his first day as president by signing 15 executive actions hitting the ground running and heightening the expectations for a new trillion plus stimulus. Now with stock valuations near a 20 year high, investors must assess Q1 profits and decide if these valuations are justified.  Volume remains robust and above average at just under 13.7 billion. 

Wall Street closes higher as Yellen backs more stimulus

With Janet Yellen today lobbying at her confirmation hearing for a big stimulus package, the markets all jumped into high gear on the hopes that this could be “an underpinning for the markets to continue to move higher.” The Dow moved up 116, the Nasdaq 198. The economy-linked stocks went higher, the defensive lower. All in all, a very good pre-inauguration day with volume still reflecting an above average exuberance at nearly 13.9 billion. 

How to Hold Social Media Accountable for Undermining Democracy

For your MLK Day, the markets are closed so I submit below an article from Harvard Business Review posted on my favorite Wall Street web site, The Big Picture, by stock guru Barry Ritholtz.  It addresses a very timely problem that is also very topical for this particular holiday -- how social media, the initial intent of which was to promote democracy through unfettered free speech, has instead undermined democracy and what to do about it.  

Succinct Summation of Week’s Events 1.15.21 (plus Bank of America's Top Stock Picks)

Below is the weekly summation, the main positive being that, as of Wednesday, we'll be seeing the end of the daily dramas or, as Barry Ritholtz puts it, "welcome a return to boring." The big negative is that we continue to learn very disturbing things about all the bloodshed at the Capitol. It is everyone's hope that the end of 2021 will see a return to some semblance of calm and normalcy again. The bonus this Sunday is a page out of this week's U.S. News Invested in which they outline all the best stocks for 2021 that Bank of America (which owns Merrill Lynch) are recommending as buys.  Have a great week.  

RETHINK FINANCIAL PLANS - A message from Consuelo

For your viewing, I submit Thursday's segment of the PBS program WealthTrack, hosted by Consuelo Mack, as she interviews Morningstar's Christine Benz on the importance of reevaluating our financial plans in view of COVID.  This is especially geared towards those families whose finances have been impacted by the pandemic either by virtue of job loss and/or medical expenses if a family member has the virus. This is particularly topical since the new variant has now been discovered in both Wayne and Washtenaw. But even if you have not been impacted, the emergency financial plans under discussion are still well worth listening to.  Have a great weekend. 

Wall Street closes lower as banks, energy shares tumble

It was another strange day since all week the markets were planning to take their cues from the banks Q4 reports today. And even though the banks turned in better than expected reports, all their stocks still fell and along with them the market as a whole, the Dow down 177 points. But the real reason for the slump was more likely today’s data showing further declining retail sales. As today’s expert put it, “Weaker than expected data is a big driver.” But there’s also some truth in last week’s euphoric optimism being brought into check. “[The market] doesn’t need a catalyst before it begins to fall on its own weight.” S&P Q4 earnings are expected to decline 9.4% but this will be more than offset by a forecasted Q1 gain of 16.4 percent. Volume remains above the 4-week average at 14.1 billion. 

Wall Street ends lower as investors weighed stimulus hopes and bleak jobs data

The markets  behaved strangely again today, the Dow up over a hundred points most of the day on the hopes and expectation that Biden would announce a stimulus close to $2 trillion.  Then when the actual announcement came in at $1.9 trillion, suddenly there were second thoughts about it being too much and possibly stoking inflation, and sent the Dow crashing down in the last few minutes to close down 68.  Today’s expert though opined that it was really just “a tug of war going on between further stimulus and a jobs market that has a long way to go” after disappointing jobs data was published. This tug of war, she said, would continue to keep markets range bound. Then there’s the third theory that investors are just sidelining waiting for Q4 reporting to start on Friday from the big banks. However put, volume remains above the 4-week average at just under 14.4 billion. 

S&P closes higher with defensive sectors leading gains

Today investors got out of value and cyclical stocks and switched back to defensive stocks while awaiting details on the next stimulus and developments on the impeachment. The Dow ended just about even (8 down) while the Nasdaq and S&P had modest gains as everyone is in wait-and-see mode awaiting the start of Q4 reporting on Friday. Another downside was the Fed’s  Beige Book which showed a modest economic increase but also a rise in unemployment. The growth index rose, the value index fell.  Volume is still above the 4-week average at 13.8 billion. 

S&P 500 ends with slightest gain as small caps favored

Investors continued to show optimism that a President Biden will bring more stimulus which in turn will quicken the economic recovery and thus boosted all three indexes, the Dow 60 points. Financials and cyclicals, the sectors that have been most beaten down by the pandemic and would most benefit from a recovering economy have been the big winners. But caution remains ahead of earnings season which begins Friday and the move for a second impeachment of Trump. But today’s expert downplays these cautions in stating, “investors were simply rotating their investments.” Volume remains considerably above the 4-week average at 15.2 billion. 

Wall St ends lower with Washington turmoil, earnings in view

There was a modest amount of profit taking today from last week’s record highs and a little bit of caution due to last week’s riots and talks of a second impeachment, but all in all it wasn’t a bad day. Investors are still optimistic about more stimulus and this was demonstrated by a buying spree in the economically sensitive sectors that will benefit from a recovery, and a sell off in the defensive sectors. But as today’s expert tried to temper things, “When markets are looking at something as critical as the governance of the United States, even a little bit of uncertainty can have a meaningful impact.”  Q4 starts on Friday so investors are likely to be cautious leading into it, taking their cues from the big banks that will be submitting the first reports.  Volume remains way above the 4-week average at nearly 14.1 billion.

Succinct Summation of Week’s Events for 1.08.21 (plus voter approval of insurrection)

Below is the usual weekly summation, the main positive being the markets rallying on the hopes of more stimulus, the main negative of course being the unprecedented historic events that took place this past Wednesday. Having the single worst COVID day on record also made the top of the list of negatives.  The bonus I offer this Sunday evening is a frightening graphic illustrating the alarmingly high minority support that registered voters have for Wednesday's violence, that a minority of 1 in 5 voters actually approve of what happened. This is one poll that I really do hope is fake news.  Hope everyone had a great weekend.  

Overvalued Markets

For your weekend viewing, I submit this week's episode of the PBS WealthTrack program hosted by Consuelo Mack. The topic is one that I'm sure is on everyone's mind -- is the current market overpriced or, do the major changes ahead -- a new administration, the vaccine, hopes for an economic recovery -- make room for even more growth? Seek some insight below as she interviews an expert on this subject, Robert Shiller.  Enjoy the weekend.  

Wall St ends higher in renewed rally on hopes of further stimulus

The Dow was some 250 points in the red for most of the day due to poor labor data showing the economy losing jobs for the first time in eight months, the continuing pandemic onslaught and the very slightest tweaking from Washington that bigger stimulus checks may not be coming. Then, in the 11^th hour, Biden commented that the stimulus “will be in the trillions, an entire package” and the market closed up modestly in the black to the tune of 56 points on the Dow.  Despite the day’s cynicism, the S&P is above 3,800 for the first time and all three indexes closed the week with gains. Though pullbacks will be expected, it is also expected that the stimulus will boost consumer spending and lift the economy.  Volume was again way above average at 14.4 billion. 

Wall St tops new highs on Democrat-driven stimulus hopes

For the second day, investors remain enthused about the Democrat-controlled Congress and the likelihood that suggests for more stimulus for a quicker economic recovery. The Dow closed up 211 points, all the indexes closed at record highs. As today’s expert says, “the market is looking forward to a Biden presidency with more structure and stimulus” and with a Democrat Congress likely to be friendly towards small businesses.  Though jobless benefits dipped a bit, they are still way too high so all eyes are on Friday’s December jobs report.  Volume remains way above average at 14.1 billion. 

Dow, S&P 500 close higher, but pro-Trump protests weigh on gain

Yesterday it was reported that the markets saw equal pros and cons in the Georgia elections and that investors actually preferred divided government.  Today the Dow shot up 700 points on the news of the Democratic sweep and the hopes for more stimulus and infrastructure. Then, at 2:20 p.m., the market went into freefall as swarms of protesters stormed the Capitol, overwhelmed police and took control of the building.  It has been the most dramatic day and most significant domestic crisis since 9/11.  By 4 p.m. the markets started leveling off and still closed up, the Dow up a considerable 437 points. Before 2:20 though, financials had hit a one-year high.  Contrary to yesterday, investors now see a Democrat-controlled Senate as a net positive for economic growth.  Volume was huge at 16.6 billion. 

Wall Street closes higher; focus on Georgia election outcome

The best assessment of today’s gains in all the indexes is simple profit taking ahead of the runoff elections in which polls give the Democrats a slight edge. The overall expectation though is for a consolidation of December’s gains as portfolios get rebalanced. The consensus is that there are pros and cons to either side winning in Georgia. A Democrat victory will pave the way for larger stimulus and infrastructure spending but also for more regulation and taxes.  Investors would prefer a divided government for the checks and balances.  Economic data from the ISM shows the highest level of manufacturing in 2-1/2 years, attributed to the pandemic shifting demand from services to goods. Despite today’s expert saying, “My sense is we may get some clarity around the runoff by tomorrow, so why invest today?” – volume was still very robust at nearly 14.4 billion, way above the 4-week average of 11.1 billion. 

Wall Street ends lower on worries over Georgia elections, virus surge

After the stellar gains we saw in Q4 and especially in December, it was no surprise to Wall Street observers to see a pullback on this first trading day of the new year, the Dow to the tune of 382 points. Of course, in this first week of the year there remains a great deal of uncertainty – the threat to Biden’s agenda for more stimulus and infrastructure spending from the Georgia elections on Tuesday, and of course the future of the vaccine rollout amidst the spike and the implications for the recovery.  As today’s expert put it, “How we get from start to finish will be filled with frequent pullbacks because people will be looking at short-term headlines.” But what is likely more significant is another expert, “Investors are at a point where they want to take a breather  while they assess all the different things coming in the new year.”  Today’s good news: manufacturing is at a six year high. Today’s bad news: jobless claims remain stubbornly high.  Volume has returned to elevated levels with a very brisk 14.1 billion shares traded. 

Video: Wrapping up 2020 (plus Astrological Predictions for 2021)

It appears even Barry Ritholtz took a very rare holiday this weekend as there is no usual succinct weekly summation. Instead what he posted is a 6 minute video "Wrapping Up 2020" which I submit below. And to spare you any further reading assignments this final holiday weekend, your bonus this Sunday night is an amusing little chart he posted today giving HIS somewhat sardonic astrological predictions for the coming year.  Enjoy!  

The List: 2021

For your weekend reading, from Friday's Washington Post, the list of what will be in and what will be out for 2021!  Enjoy!  

An Extraordinary Year from PBS' WealthTrack

For this first day of 2021 I must share yesterday's WealthTrack program on PBS hosted by Consuelo Mack. This program focuses on her most illustrious interviews this year, thereby providing yet another summary perspective on 2020.  Enjoy. Enjoy the weekend. Enjoy the New Year. 

Wall Street closes out wild pandemic year with Dow, S&P at records

Happy New Year! I guess I was lead astray yesterday when I looked up Wall Street New Year’s Eve hours on google and it said trading would be only until 2 pm. Indeed, trading was all day and all three indexes spent almost the entire session in the red until just after 2 pm when they zoomed up and all three closed in the black to end 2020, the Dow up 196 points.  The only explanation below is that jobless claims, though down from last week, remain well above the peak levels of the Great Recession.  But the following Reuters article is well worth the read as it is a very good summary of the whole year, the wild pandemic year, and ending on the very good news that both the Dow and S&P are at records, namely because investors are looking not at 2020 but ahead to a hopefully much brighter 2021.  Volume data was not published today but, per the CBOE, 9.4 billion shares were traded, which is right in line with this light holiday week.