Monday, December 7, 2020 – DIA 301.11 -.49%, QQQ 307.25 + .57%, SPY369.09 -.21%
No major data released. Markets gapped down on the opening bell on worries for the upcoming Brexit date and related trade concerns, but by end of the day were mixed. Discussions appeared to be gaining momentum for a $980 Billion-dollar pandemic relief package in Congress, and there was continued anticipation of a fast-track FDA emergency use authorization and the imminent release of a vaccine for COVID-19. Big Tech showed leadership on the day, with Netflix (NFLX) 515.78 +3.51% in a continued rally from its October 14 to November 10 decline. Chinese communications services company NetEase (NTES) 89.41 +2.32% rallied and is challenging support. It has been underperforming the market since early July. On the downside Intel (INTC) 50.20 -3.43% came under pressure as media reports continued to point out that Apple (AAPL) 123.75 +1.23% is transitioning to using its own Apple-made processors, excluding Intel. (Note that AAPL is 10% of INTC revenue!).
Tuesday, December 8, 2020 – DIA 302.20 +.37, QQQ 308.29 +.34%, SPY 370.17 +.29%
Non-Farm Productivity came in 4.6% vs. an expected 5% for Q3. Unit Labor costs came at -6.6% vs. an expected -8.9%. The NASDAQ continued to hit record highs, but price action was modest. The Energy Sector (XLE) 40.27 + 1.49% continued its blistering rally with Marathon (MRO) 7.07 +5.68%. Occidental (OXY) 19.13 +5.17% showing continued strength. On the downside, the housing sector came under selling pressure, with Lennar (LEN) 72.50 -5.02%, DR Horton (DHI) 70.83 -4.02%, Pulte Home (PHM) 42.04 -3.62% all taking it on the chin. The 10-year Treasury note index (TNX) has almost doubled since late August (higher rates are never good for housing). The 10-year rate is used to benchmark most home mortgages. Late in the day, the state of Texas filed multi-state litigation with the supreme court! - claiming that in the recent presidential election, that the voting laws were unconstitutionally changed & sued the 4 battleground states named!
Wednesday, December 9, 2020 – DIA 300.88 -.44%, QQQ 301.31 -2.26%, SPY 366.85 -.90%
Job openings for October were higher than expected coming in at 6.652M vs. 6.3M. The equity markets opened flat to higher but as trading developed through the day, significant selling surfaced, especially in technology names. The S&P 500 index showed a bearish engulfing candle on heavier volume than the day before. Salesforce.com (CRM) 220.57 -3.20% was under pressure as well as Apple (AAPL) 121.78 -2.09%, Microsoft (MSFT) 211.80 -1.95%, Tesla (TSLA) 604.48 -6.99% and Zoom (ZM) 385.36 -6.47%. On the plus side Baidu (BIDU) 151.59 +4.55% was upgraded by UBS, and Expedia (EXPE) 128.84 +2.03% was mentioned positively in a financial publication. By the end of the day, 17 additional states were said to file briefs joining the Texas multi-state lawsuit that was brought before the SCOTUS on the legality of the recent presidential election balloting changes.
Thursday, December 10, 2020 – DIA 300.50 -.13%, QQQ 302.52 +.4%, SPY 366.87 +.01% flat
CPI ex-food & energy came in stronger than anticipated MoM +.2% vs. the .1% expected. CPI on a YoY basis was 1.2% vs. 1.1%. Continuing Jobless claims were much higher than anticipated 5.757M vs. 5.335M. Initial jobless claims were much higher than anticipated as well at 853K vs.725K. Equity markets showed signs of indecision, as the unchanged level was crossed multiple times on the day. Crude Oil broke to a fresh 9 month high of 46.88 +2.97% which drove the energy sector higher (XLE) 41.60 +3.09%. The standouts in the sector with blowout days were Occidental (OXY) 21.31 +9.9%, Apache (APA) 16.50 +9.85%, Devon Energy (DVN) +6.22%. Losers on the day included Fastenal (FAST) 48.39 -2.50% which had hit a 52-week high the day before and saw some profit-taking. Pandemic beneficiary Dollar Tree was down (DLTR) 108.29% -2.32% after it was reported the retailer had fewer hedge fund holders in the last filings report. Also, work uniform supplier Cintas (CTAS) 347.75 was down again -1.89% and made a fresh 30-day new low.
Friday, December 11, 2020 – DIA 300.93 +.13%, QQQ 301.85 -.22%, SPY 366.30 -.12%
Michigan Consumer Sentiment came in at a Robust 81.4 vs. 76.5 expectation. Producer Prices Ex-Food & Energy came in at 1.4% vs. 1.5% YoY expected. Disney (DIS) 175.72 +13.59% soared on its television streaming plans and guidance, holding up the DJIA. (DIA) QUALCOMM (QCOM) 144.28 -7.36% which has been a bull market leader tumbled on news that Apple (AAPL) 122.41 -.67% would build its own chips. Expedia (EXPE) 123.02 -5.71% got hit after being downgraded by Citigroup. After trading hours SCOTUS denied hearing the Texas multi-state lawsuit on the “lack of standing” to bring the case before the court.
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