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Main Takeaways
- Oxford vaccine, AstraZeneca will receive emergency approval in the UK
- Bitcoin futures have burned higher in the last few days
- The American Petroleum Institute report shows higher-than-expected weekly crude investment attraction
(Open Market Thursday) Today’s trade may be like watching dry beige paint. But after a year like 2020, that might be just what some would call it.
As you might expect during a week shortened by a holiday, trading volumes in stocks in all three major U.S. indices were lower than the average yesterday. That may also be true today as it is the last trading day of the year and many investors and traders seem to have closed the books by 2020.
There’s not much on the economic calendar other than the jobless application figures this morning, which came in at 787,000 compared to Briefing.com’s consensus expectation of 800,000.
This close-up number has suddenly remained above 800,000 in recent weeks, so the data is better than expected than a welcome improvement. But the weekly number is still much higher than in pre-release days and it is a reminder that the economy seems to be far out of the woods as widespread vaccinations seem far away.
A new vaccine gives the arm a market perspective
There was some good news about the face of the vaccine yesterday, as a British regulator gave permission for emergency use of vaccines from Oxford University and AstraZeneca (AZN).
With that vaccine comes together with the makers of Moderna (MRNA), and Pfizer
PFE
In other words, the market seems to be more focused on the future than the present. With that backdrop, the Energy and Materials sectors were the best performers on Wednesday, indicating that investors may have been diverting some money into revolving stocks that would benefit from a reopening economy.
Despite the struggle to raise so much of the transport incentive, the market still seems to be overwhelmed by the previously announced just $ 600 payments, which the government has already started circulating.
Going to the finish line
FINL
FINL
However, even though the Dow Jones industrial average ($ DJI) closed at a level, Wednesday ‘s market gains were not significant.
This could be due to market participants looking for another catalyst to move stocks significantly higher as a lot of vaccine optimism has already been introduced, as the motivational reviews are $ 600.
Remember: Markets are closed tomorrow for New Year ‘s Day, but today will be a full session. The weekly options end today. If the flow of news is quiet today, it is possible that traders and investors will just go through the last trading day of a difficult day around 2020. Many traders and money managers tend to make the door leave this time. year, willing to take on any new roles.
But holiday markets can be a two-edged sword. If there is any news about the stimulus or virus fronts (or any of the topics we mentioned in our 2021 Outlook), the market could be more choppy. Also, it is worth remembering that the last hour of today ‘s session may see a bit more movement as some market participants may use that time to spend a few minutes building positions.
After we stop to celebrate the new year, we will jump right back on the treadmill next week. Investors are likely to keep a close eye on Georgia’s running elections. And we also expect to receive a massive collection of economic data including a sharp-looking manufacturing index, weekly jobless claims, and the big event of the week – Friday’s nonfarm payroll report.
As this year draws to a close, we would like to wish you a very happy and, especially, healthy new year.
The thinkorswim® platform from TD Ameritrade
CHART OF THE DAY: CRYPTO VOLATILE. Since their launch a year or two ago, bitcoin (/ BTC-candlestick) futures have gone from a mess, to a rebound, to a parabolic in the last few days. Compared to classic payment methods such as the dollar ($ DXY – blue line) and inflation hedges like gold (/ GC – purple line), bitcoin has seen more than the share of volatility. Data sources: CME Group
CME
Is inflation on our way? Nobel laureate economist Paul Samuelson once shouted that the stock market had forecast “nine of the last five recessions” – a way of saying that the market is not a perfect barometer of what is to come. It’s worth keeping that in mind when you look at the recent rise in the price of bitcoin futures (/ BTC – see chart above). Considering recent comments from the Fed about keeping rates low for an extended period of time and the potential for inflation to run hot – along with new fiscal stimulus and suggestions for more to come – it is a shame to ‘look at / BTC as a potential tool in future inflation.
But pull up a gold card from the financial crisis in 2008 through 2013 and you may see the same vivid thing – the flood of liquidity was supposed to be used in the new era of inflation. But he didn’t play like that. Inflation declined, despite a low unemployment rate, and gold spent the last decade reversing many of these gains from 2008-2013. Gold – like bitcoin – has rebounded recently, but it’s hard to say whether inflation is just around the corner this time around, or whether it’s another of those false warnings of Paul Samuelson ‘s kind.
2021 and 4080: On Tuesday the SPX released a new record above 3750, an indication that the forward-looking stock market continues to price 2021. But could valuations be a little late? ? Investment research firm CFRA has a 12-month price target for the SPX of 4080, which means a 9.5% gain from Tuesday’s close. That forecast comes as global domestic product estimates for 2021 are around 5% for developed and emerging markets, and each region’s employment projections are in the double-digit figures for the United States. , emerging markets, and developed international markets. But there seem to be signs that a warning could be in order. “Domestic equity markets appear to have experienced too much 2021 economic recovery and EPS … and as a result could be vulnerable to Q1 withdrawals,” CFRA said. The group noted that the Russell 2000 was more than 30% above its 200-day moving average, while the SPX’s next-month 12-month price-to-earnings ratio was 42% higher. higher than the 20-year average.
Energy power: Oil prices appear to have tail prices that could help keep the recovery in the Energy sector on track. A weaker dollar helps to increase demand for dollar-denominated crude from buyers using other currencies. At the same time, other coronavirus vaccines could help get the global economy on its feet and help increase demand for crude. Domestically, the U.S. economy, and therefore demand for oil, could be helped by stimulating transportation. And in the short term, a report from the American Petroleum Institute shows a larger-than-expected weekly crude investment attraction has helped boost domestic futures. However, it is worth noting that the Energy sector is the worst performer of the year, having slipped by more than 36% a year through Wednesday ‘s closure, and the global economy appears to be far from out of the question. forest as vaccine distribution is just beginning.