Of course, a sector can rally on new cash coming off the sidelines. Often, however, when one sector rallies another falls as investors use profits from that sector to fund new buys. That seems to be what happened today when “green” stocks rallied and technology shares fell.
The Standard & Poor’s 500 closed up 0.64% today to a new closing high and ended the year ahead more than 16%. The Dow Jones Industrial Average also closed in record territory after a gain of 0.65% on the day. The Dow is up about 7% for 2020. The NASDAQ Composite managed a gain of 0.14% to bring its gain to 40% for 2020. Today’s advance in the Santa Claus period–which historically also includes the first two trading days in January so it’s not quite over yet–is a good omen for 2021.
The big vaccine story today is out of China–just before the start of the Lunar New Year travel season
A coronavirus vaccine developed by Chinese drugmaker Sinopharm is 79% effective in protecting people from the coronavirus, according to interim data released Wednesday by the company Sinopharm. The results for the two-shot vaccine were based on interim analysis from Phase 3 trials.
Yesterday stocks moved higher on news that President Donald Trump had actually signed the combined coronavirus stimulus/relief and government spending bill. I guess after contemplating the possibility of no bill and another government shutdown, even $600 checks seemed like a big deal. Today, not so much. Worries that Republican Senate Majority Leader Mitch McConnell will prevent the House-passed bill increasing the size of those checks to $2,000 from even coming up for a vote on the floor of the Senate were enough to trigger a mild retreat in stock prices.
Sell today if you’re looking to sell to generate tax losses for 2020. After today, December 29, you can still sell but the losses will count for the 2021 tax year.
On Tuesday President Donald Trump tweeted a video heavily criticizing the recently passed coronavirus stimulus/relief bill–and a huge funding bill to keep the government running–and implying that he could veto the bill. Today, Wednesday, December 23, stocks barely budged. The Standard & Poor’s 500 was up 0.07%. The Dow Jones Industrial Average gained 0.38%. The NASDAQ Composite was down 0.29% and the NASDAQ 100 fell 0.51%. The small cap Russell 2000 picked up 0.87%. The iShares MSCI Emerging Markets ETF rose 1.02%. Why the lack of reaction?
For the week ended December 12, the number of Americans filing initial claims for unemployment in regular state programs rose on a seasonally adjusted basis to 885,000, an increase of 23,000 from the previous week. That was the largest gain in the last three months. A Bloomberg survey of economists had projected 818,000 initial state claims and 5.7 million continuing claims on an adjusted basis.
Signs of a market top Part 1: Looks like a topping market to me–see TSLA, DASH, ABNB, AI for evidence
I see all the signs of a market that’s moved beyond enthusiasm to excess. This stage in a market is called many things. A market melt. Forming a top. You get the idea. We won’t, of course, know if the current levels constitute a top until we get a sustained downturn. And waiting for that confirming downturn can take a while and be very painful if you’ve tried to time the turn with shorts or Put Options and turn out to have been early. The topping process can go on for a while.
Senate Majority Leader Mitch McConnell continues to refuse to endorse the $908 billion package and today offered up a new proposal to eliminate his demand to exempt companies from legal liability for coronavirus damages (say, if they lied to workers about infections in their workplace) in exchange for Democrats dropping their insistence of $160 billion of so in aid for states and cities. “It’s my view, and I think it’s the view shared by literally everybody on both sides of the aisle, that we can’t leave without doing a Covid bill,” McConnell said at a news conference. “The country needs it.” Democrats weren’t having any of McConnell’s “compromise.”
That’s the spirit, Congress! House to vote tomorrow on a one-week spending extension to prevent a government shutdown on Saturday
House majority leader Steny Hoyer, Democrat of Maryland, confirmed in a tweet that the House will vote on a one-week spending extension Wednesday to avert a government shutdown on Saturday. “The House will vote on Wednesday on a one-week CR [continuing resolution] to keep government open while negotiations continue,” Hoyer wrote.
News this week from the Food & Drug Administration on a coronavirus vaccine–and maybe even the start of vaccinations–plus news on action on funding to keep the government open past Friday–plus news on a new coronavirus stimulus package–all this week
Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi spoke Thursday about a new coronavirus relief and stimulus package and about funding the government after the current stop-gap authorization expires on December 11. It’s the first time the leader of the Senate Republicans and the House Democrats have talked since November 3.