Succinct Summation of Week’s Events for 02.05.21 (plus Winning By Losing Less)

Sun 2-7-21

Below is the usual weekly summation, the big positive being the week's rally, the big negative being payrolls coming in below forecast. The big bonus this Sunday night is again this week's segment of the PBS program WealthTrack and its guest Charlie Dreifus talking at length about the pic that has dominated our conversations since Day One: increasing profits by cutting losses.  Please also make note of the P.S. at the end suggesting the required reading of Jason Zweig's Wall Street Journal column, "The Intelligent Investor" and its commendable analysis of the GameStop mania. Hope everyone had a great weekend.  

Investing in Uncertain Times: Four Ways to Move Forward.

For those unable to participate last month, below is a YouTube link to the January 25th AAII webinar "Investing In Uncertain Times: Four Ways to Move Forward" as presented by Morningstar guru Janet Brown. Enjoy and stay warm this weekend.  

S&P 500, Nasdaq post biggest weekly gains since early November

The Dow and S&P rose for the fifth straight session marking their longest streak since August bolstered by the expectation of a big stimulus package and a continued upbeat Q4. The VIX fell to its lowest point in three months and GameStop started gaining again after Robinhood removed all barriers to buying. The SEC continues its investigation into fraud. With the VIX down and Q4 humming along, volume finally fell below the 4-week average at 13.6 billion. 

S&P 500, Nasdaq hit record closing highs amid upbeat earnings, data

It was another record breaking day with both the S&P and Nasdaq reaching all-time highs and the Dow up for the fourth straight day on positive Q4 reports, strong enough that the S&P is now headed for positive Q4 earnings instead of the previously forecasted decline. We’re getting closer to a COVID relief bill, the payrolls report due tomorrow is expected to show a 50,000 job increase, and the VIX has fallen to its lowest level in two weeks.  The retail trading frenzy continues to fizzle, GameStop stock has fallen again, the SEC continues its investigation into fraud and Secretary of Treasury Yellen has stated that they will be studying the recent frenzy deeply before taking any action. All in all, the Dow gained 332 on volume of just under 14.1 billion. 

S&P 500, Dow end up for 3rd day as Alphabet jumps, volatility eases

Though the VIX was reported to be down today, it was nevertheless another wild ride with the Dow swinging from a -170 to a +110, finally settling at a +36 at close. The good news is that GameStop and the retail trading frenzy continues to fizzle  while the SEC reviews the whole situation for fraud. Amazon declined 2% on the news of Bezos’ surprise move which doesn’t really make a lot of sense since the overall sentiment on his successor is upbeat. Private hiring came in at 174,000 after a drop in December while the services industry hit a two year peak. Volume came in just under 14 billion. 

Wall Street jumps for second day; Amazon says Bezos to step down from CEO role

The GameStop sizzle is fizzling with the stock dropping 60% today alone and bringing relief to the short sellers. Robinhood is in trouble seeking a billion dollars in loans to cover its orders. Combine all that with the optimism over shrinking COVID cases for the first time since September and a generally bright Q4 with 80% of reporting companies surpassing expectations, and all the indexes were way up, the Dow 475 points.  Volume is finally back in line with the 4-week average at 14.7 billion. 

Wall Street ends up sharply, led by gains in tech shares

The profit-takers swooped in today to scoop up tech shares while the rebellion among the retail traders switched to the silver markets, which went crazy today. However, being a much smaller market, the impact was quite a bit less than it was last week which saw the steepest sell off since October. Silver though hit its highest in 8 years but the VIX eased off from last week’s 3 month highs.  And Robinhood, one of the key players in this uprising, had to go looking for a bank hoping to raise a billion dollars to fulfill their orders.  Not much econ news today except manufacturing slowing a bit but, after weeks of greatly elevated volume and especially last week when there were three days of over 20 billion shares traded, today volume was back to almost normal (normal for these excitable times anyway) coming in at 15.9 billion.