Post by Admin/YBB on Dec 26, 2020 7:04:49 GMT -6
[Italics within the brackets are my additions/elaborations]
www.barrons.com/magazine?mod=BOL_TOPNAV
Pg M1, Trader: Stocks were mixed. But small-caps have been hot and may have rallied bit early [typically they do well early in the year]. R2000/IWM more than doubled [+102%] from March 18 low; it is 30% above 200-dMA; it has made new high in December only twice in history and both times it was lower 3 months later. Breadth has been OK. Big techs have been left behind in the recent market runup; they peaked in early-September. While it is good that the market can move up without the big techs, a sharp break in big techs will take the market down. [For a postmortem of columnist’s 2020 picks, see online/paper issue]
The CME FedWatch tool is based on current fed fund futures quotes around the FOMC meetings and the assumption of gradual fed fund rate changes.
ZIRP [0-0.25% fed fund rate] through September 2021 FOMC meeting.
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html ]
For the week [index changes only], DJIA +0.07%, SP500 -0.17%, Nasdaq Comp +0.38%, Russell 2000 +1.72%. DJ Transports -0.34%; DJ Utilities -1.32%. [Rotating spot R2000 +1.72%]. US$ index (spot) +0.34%, oil/WTI futures -1.77%, gold futures -0.31%.
YTD [index changes only], DJIA +5.82%, SP500 +14.62%, Nasdaq Comp +42.71%. [Rotating spot R2000 +20.11%]
Pg M4, Europe: The largest global chemical, German BASF [BAS.ge/BASFY] is attractive. It has several vertically integrated product lines. It is a good economic rebound play.
Pg M4, Emerging Markets: EM growth [NIO, MELI, SE, TCEHY, etc] has been hotter than the US growth. But it isn’t cheap anymore and may consolidate [i.e. move sideways] in 2021. Instead, look at EM consumer stocks [HTHT, YUMC, HDB, etc].
Pg M6, Commodities: Soybean rally may continue into 2021 due to bad dry weather in South America and high demand from China. ETF is SOYB.
Pg M5, Options: In the worst year imaginable for its theme parks and movies, Disney/DIS pivoted hugely into streaming and its stock has rallied. Recommended is pairing DIS call-buying with put-selling [beware risks].
[SP500 VIX 21.53, SKEW 148.27 (high)] [Yahoo Finance data]
Pg M27, M32: A flat week in Europe [Spain +0.93%, Finland -0.82%, Greece -1.51%] and a down week in Asia [New Zealand +2.07%, Indonesia -2.17%]. The equity CEF index [data to Thursday] outperformed the DJIA and its discount was -6% [wide fluctuations between -4% to -16% over the last few months].
Treasury rates 3-mo yield 0.09%, 2-yr 0.13%, 5-yr 0.37%, 10-yr 0.94%, 30-yr 1.66% [Treasury data*]. Dollar rose, DXY 90.36, +0.6% [M35]. Gold [Handy & Harman spot, Thursday] No data but see above; the gold-miners fell. [^XAU was at 143.73, -0.81% for the week]
*Treasury Yield-Curve www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
Top FDIC insured savings deposit rates*: Money-market accounts 0.61%; 3-mo Jumbo CD 0.40% [most are 0.25% or below], 1-yr CDs 0.70%; 5-yr CDs 1.00% [M33].
*For local rates www.depositaccounts.com/banks/rates-map/
Bonus from Part 2. Due to post length limitation (approx. 1,260 words or 6,760 characters), these won’t be repeated in Part 2.
Pg 22: Cover Story, “Try These 6 Travel and Leisure Stocks to Play a Vaccine-Driven Rebound in Demand”. Hotel/resorts WH, VAC, STAY, WYNN; cruise line NCLH; casinos CZR. Also mentioned are WYND, HGV, HLT, H, MAR, CHH; RCL, CCL; MGM, LVS, BYD, PENN.
Pg 5, Up and Down Wall Street: An Australian study showed that headlines have transient effects on stocks but cause and effect are unclear; it was based on a new sentiment index [NSI] derived from positive and negative articles on economy in major papers. Some services track smartphone data, social-media data, job postings, restaurant reservations, airport traffic, credit card expenditures. World Uncertainty Index [WUI] tracks occurrences of the word “uncertainty” in the news. Lot of uncertainty suddenly emanated from DC on 3 important bills [defense, budget, Covid-19]. Economic data are weakening [jobs, confidence, income/spending]. Inflation expectations are rising [that is the difference between Treasury yields and TIPS yields].
Chinese yuan has been getting stronger due to faster Chinese recovery from Covid-19. It didn’t have to use large stimulus [PBOC balance sheet hasn’t grown much]. Stephanie Pomboy [MacroMavens] notes an odd behavior of this downturn and recovery – it hurt services more than goods [typically the reverse happens in normal downturns]. China also made internal economic shifts during the pandemic; reduced its US Treasury holdings; it has been buying commodities [Dr Copper, steel, oil, gold, grains]. It has let some zombie state companies fail. It is using regulations to tame big techs such as BABA. The larger goal is to make yuan a viable alternative to dollar.
Pg 7, Streetwise: Home-gym/fitness stocks [PTON, NLS] continue to rally. Competition is growing from AAPL, AMZN, FB, GOOGL, LULU, and private companies.
More later….
www.barrons.com/magazine?mod=BOL_TOPNAV
Pg M1, Trader: Stocks were mixed. But small-caps have been hot and may have rallied bit early [typically they do well early in the year]. R2000/IWM more than doubled [+102%] from March 18 low; it is 30% above 200-dMA; it has made new high in December only twice in history and both times it was lower 3 months later. Breadth has been OK. Big techs have been left behind in the recent market runup; they peaked in early-September. While it is good that the market can move up without the big techs, a sharp break in big techs will take the market down. [For a postmortem of columnist’s 2020 picks, see online/paper issue]
The CME FedWatch tool is based on current fed fund futures quotes around the FOMC meetings and the assumption of gradual fed fund rate changes.
ZIRP [0-0.25% fed fund rate] through September 2021 FOMC meeting.
www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html ]
For the week [index changes only], DJIA +0.07%, SP500 -0.17%, Nasdaq Comp +0.38%, Russell 2000 +1.72%. DJ Transports -0.34%; DJ Utilities -1.32%. [Rotating spot R2000 +1.72%]. US$ index (spot) +0.34%, oil/WTI futures -1.77%, gold futures -0.31%.
YTD [index changes only], DJIA +5.82%, SP500 +14.62%, Nasdaq Comp +42.71%. [Rotating spot R2000 +20.11%]
Pg M4, Europe: The largest global chemical, German BASF [BAS.ge/BASFY] is attractive. It has several vertically integrated product lines. It is a good economic rebound play.
Pg M4, Emerging Markets: EM growth [NIO, MELI, SE, TCEHY, etc] has been hotter than the US growth. But it isn’t cheap anymore and may consolidate [i.e. move sideways] in 2021. Instead, look at EM consumer stocks [HTHT, YUMC, HDB, etc].
Pg M6, Commodities: Soybean rally may continue into 2021 due to bad dry weather in South America and high demand from China. ETF is SOYB.
Pg M5, Options: In the worst year imaginable for its theme parks and movies, Disney/DIS pivoted hugely into streaming and its stock has rallied. Recommended is pairing DIS call-buying with put-selling [beware risks].
[SP500 VIX 21.53, SKEW 148.27 (high)] [Yahoo Finance data]
Pg M27, M32: A flat week in Europe [Spain +0.93%, Finland -0.82%, Greece -1.51%] and a down week in Asia [New Zealand +2.07%, Indonesia -2.17%]. The equity CEF index [data to Thursday] outperformed the DJIA and its discount was -6% [wide fluctuations between -4% to -16% over the last few months].
Treasury rates 3-mo yield 0.09%, 2-yr 0.13%, 5-yr 0.37%, 10-yr 0.94%, 30-yr 1.66% [Treasury data*]. Dollar rose, DXY 90.36, +0.6% [M35]. Gold [Handy & Harman spot, Thursday] No data but see above; the gold-miners fell. [^XAU was at 143.73, -0.81% for the week]
*Treasury Yield-Curve www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
Top FDIC insured savings deposit rates*: Money-market accounts 0.61%; 3-mo Jumbo CD 0.40% [most are 0.25% or below], 1-yr CDs 0.70%; 5-yr CDs 1.00% [M33].
*For local rates www.depositaccounts.com/banks/rates-map/
Bonus from Part 2. Due to post length limitation (approx. 1,260 words or 6,760 characters), these won’t be repeated in Part 2.
Pg 22: Cover Story, “Try These 6 Travel and Leisure Stocks to Play a Vaccine-Driven Rebound in Demand”. Hotel/resorts WH, VAC, STAY, WYNN; cruise line NCLH; casinos CZR. Also mentioned are WYND, HGV, HLT, H, MAR, CHH; RCL, CCL; MGM, LVS, BYD, PENN.
Pg 5, Up and Down Wall Street: An Australian study showed that headlines have transient effects on stocks but cause and effect are unclear; it was based on a new sentiment index [NSI] derived from positive and negative articles on economy in major papers. Some services track smartphone data, social-media data, job postings, restaurant reservations, airport traffic, credit card expenditures. World Uncertainty Index [WUI] tracks occurrences of the word “uncertainty” in the news. Lot of uncertainty suddenly emanated from DC on 3 important bills [defense, budget, Covid-19]. Economic data are weakening [jobs, confidence, income/spending]. Inflation expectations are rising [that is the difference between Treasury yields and TIPS yields].
Chinese yuan has been getting stronger due to faster Chinese recovery from Covid-19. It didn’t have to use large stimulus [PBOC balance sheet hasn’t grown much]. Stephanie Pomboy [MacroMavens] notes an odd behavior of this downturn and recovery – it hurt services more than goods [typically the reverse happens in normal downturns]. China also made internal economic shifts during the pandemic; reduced its US Treasury holdings; it has been buying commodities [Dr Copper, steel, oil, gold, grains]. It has let some zombie state companies fail. It is using regulations to tame big techs such as BABA. The larger goal is to make yuan a viable alternative to dollar.
Pg 7, Streetwise: Home-gym/fitness stocks [PTON, NLS] continue to rally. Competition is growing from AAPL, AMZN, FB, GOOGL, LULU, and private companies.
More later….