As of 11:15 a.m., the market is tumbling and the VIX “Fear Index” is up 15.79% to 22.22. My January 26 VIX Call Options with a strike at 20 (VIXW220126C00020000) have soared 61.11% to sell at $290 a contract. With the expiration date of January 26 approaching I’m selling this position today.
In the week ahead expect the financial markets to pay more attention to the crisis unfolding in Ukraine. War between Russian and Ukrainian forces on Ukrainian soil remains a low probability event in my opinion but it odds aren’t nearly as low as they were a month ago.
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. My eighty-six YouTube video “Bitcoin and Kazakhstan” went up today.
Applications for unemployment benefits in regular state programs rose last week to 207,000 for the week ended January 1, the Labor Department reported today, Thursday, January 6. That was up 7,000 from the prior week and above the 195,000 predicted by economists surveyed by Bloomberg. The total remained near historic lows.
Shares in China’s Evergrande Group have been suspended from trading in Hong Kong, the property developer announced on Monday. The company did not give a reason. Leaving us to speculate and there’s plenty to speculate with. Evergrande missed new coupon payments of $255 million due last Tuesday–and that’s just the beginning
Everyone on Wall Street who manages more than a dime will be watching Friday’s release of the jobs report for December. Any hint of how the Delta and Omicron Variants have/will affect the economy will be gobbled up and turned into strategies for the next 10 to 12 weeks (until spring, that is.) Economists surveyed by Bloomberg expect that the economy added 400,000 jobs in December
The CBOE S&P 500 Volatility Index (VIX) hasn’t moved much so far in today’s session. The so-called “fear index” is down just 0.23% to 17.26 as of 3:20 p.m. New York time. But there’s been strong action in the options market with risk hedges for the end of January and the middle of February showing losses. I’m going to use today’s selling to buy two VIX Call positions in the Volatility Portfolio.
Judging from the close of Monday’s trading session, there looks to be enough fuel for a Santa Claus rally to end 2021. The Standard & Poor’s 500 closed up 1.38% and the Dow Jones Industrial Average gained 0.98%. The NASDAQ Composite was ahead by 1.39% and the small cap Russell 2000 was higher by 0.89%.
Real gross domestic product (that is after inflation) increased at an annual rate of 2.3 percent in the third quarter of 2021, the Bureau of Economic Analysis announced today. That’s an increase from the 2.1% increase reported for the quarter after what’s called “the second estimate” in November. And this follows on the 6.7% annual growth rate reported for the second quarter.
Yesterday the Standard & Poor’s 500 fell 1.14% and market leading stocks such as Applied Materials (AMAT) dropped 0.78%. Big drug stocks made up the only sector in the green as Pfizer (PFE) rose 2.59%,and AbbVie (ABBV) gained 1.23%. The fears yesterday were that the Omicron Variant of the Covid-19 virus would slow the economy and that Senator Joe Manchin had just killed prospects for any stimulus from the Biden Administration’s Build Back Better bill. Today the S&P 500 closed up 1.78%. A market leader like Applied Materials rose 4.42%. A big drug stock such as Pfizer was down 3.39%.
I’ve learned over the years never to think that a piece of legislation is dead until I’ve seen its proponents cut off its head and bury it at a cross roads with garlic around its neck and a stake through its heart. But I’d certainly entertain the idea that the Biden administration’s Build Back Better plan is dead at the hands of West Virginia Democratic Senator Joe Manchin. And that defeat for Build Back Better means a huge set back in efforts to put the U.S. economy on the right side of the battle to temper global climate change. So today’s sell off of companies looking toward federal spending to accelerate growth in those sectors makes perfect sense. Other “Green” stock either didn’t fall or actually rose because growth for those companies isn’t dependent on government subsidies.
On Wednesday stocks were up as technology shares soared after the Federal Reserve announced that it would cut its bond purchases more quickly than expected and (may) raise interest rates three times before the end of 2022. The logic, I think, to the tech share rally was that these stocks would, again, be able to grow even if the economy as a whole faltered. So that day saw Apple (AAPL) gain 2.85%; Nvidia(NVDA) soared 7.49%, and Palo Alto Network(PANW) climbed 5.42%, to name just three tech stars for the day. Thursday, December 16, the market seemed to have second thoughts.
