Monday, January 18, 2021 – MLK Day. Markets closed.
Tuesday, January 19, 2021 – DIA 309.32 +.39%, QQQ 316.41 +1.46, SPY 378.65 +.79%
No meaningful data was scheduled for release. Markets appeared to react positively to Janet Yellen's push for an aggressive stimulus push as the new administration takes hold. The two best S&P 500 sectors on the day were Energy (XLE) 43.61 +2.01%, followed by Communication Services stocks (XLC) 66.47 +1.81%. American Express (AXP) 126.75 +3.77% (earnings 1/26 BMO) broke to a new high after being upgraded to overweight from underweight at JPMorgan. Goldman Sachs (GS) 294.20 -2.26% declined after beating earnings and revenue but GS Management warned that 2021 would be a difficult year. General Motors (GM) 54.84 +9.75% hit new highs on an announcing a new partnership with Microsoft (MSFT) 216.44 +1.78% to jointly develop self-driving cars through a new entity called Cruise LLC. Other names in the consumer Car sector were also in the spotlight as Carmax (KMX) 116.43 +9.39 hit new highs. After poor retail sales figures Friday, retailers ULTA Beauty (ULTA) 293.17 -2.88%, Ross Stores (ROST) 113.98 -2.56%, Costco (COST) 354.47 -2.2%, and Target (TGT) 188.16 -3.41% all continued under selling pressure.
Wednesday, January 20, 2021 – DIA 311.77 +.79%, QQQ 323.77 +2.33%, SPY 383.89 +1.38%
Inauguration Day, no meaningful data released. The major markets opened at all-time highs and continued higher as the transition of presidential power was completed without incident. The best S&P 500 sector on the day was Communication Services (XLC) 68.56 +3.14% with the laggard of the day being financials (XLF) 30.89 -.42%. The day’s rocket stock was Netflix (NFLX) 586.34 +16.85% which reported earnings after the bell Tuesday, in the clearest sign yet covid-19 has put people at home and in front of their video devices seeking entertainment, Netflix announced that they now have over 200 million subscribers and strong international growth. Homebuilders were strongly led by Pulte Home (PHM) 46.69 +6.09% which announced an expansion into the states of CO & NC, Lennar (LEN) 82.53 +5.48%, DR Horton (DHI) 75.11 +5.33%. All 3 appear to have broken their downtrends. On the downside Bank of New York Mellon (BK) 42.49 -7.27% missed on earnings. US Bancorp (USB) 45.58 -5.18% met earnings estimates (down 12% YoY) but did not give forward guidance.
Thursday, January 21, 2021 – DIA 311.87 +.03%, QQQ 326.36 +.80%, SPY 384.24 +1.73%
Initial Jobless Claims came in +900k v. +910K expected. Still heavy. Continuing Jobless Claims came in lighter than expected +5.054M vs. 5.4M expected, better but still high. Building permits came in strong at 1.709M vs. 1.604M expected and Housing Starts also were strong 1.669M vs. 1.56M. The Energy Sector (XLE) 42.29 -3.38% was hard hit on the day. In new presidential executive actions, the construction of the Keystone pipeline was ordered to be halted as well as a 60-day suspension on fracking lease renewals on federal land. Particularly hard hit was Murphy Oil (MUR) 13.01 – 14.01%, EOG Resources (EOG) 55.03 -8.59%, Devon Energy (DVN) 18.39 -7.91%, Occidental Petroleum (OXY) 21.54 -6.43%. On the upside Paccar (PCAR) 98.74 +10.46% maker of semi-trucks announced a joint venture with start-up Aurora Innovation to develop autonomous driving trucks. (PCAR reports earnings 1/26 B.M.O).
Friday, January 22, 2021 – DIA 309.97 -.61%, QQQ 325.42 -.29%, SPY 382.82 -.37%
Markit manufacturing PMI was released 59.1 vs. 56.5 expected. Likewise, the Markit Services PMI also came in higher at 57.5 vs. 53.6 expected. Financials were the worst-performing S&P 500 sector on the day (XLF) 30.34 -.72%. Huntington Bancshares (HBAN) 13.84% -4.62% missed on earnings (27 cents vs. 30 cents estimate per share) and revenue. Incyte Corporation (INCY) 97.89 +4.25% announced the FDA has accepted its biologics license application for its cancer drug Retifanlimab. International Business Machines (IBM) missed on earnings $1.778 vs. $2.07 expected, and revenue declined from the prior year. Intel (INTC) 56.66 -9.29% fell as the incoming CEO recommitted the firm to once again obtaining a leadership position in semiconductor manufacturing and operating foundries for certain products. (Semiconductor manufacturing is capital intensive, while intellectual property rights administration and sales are believed to be less so).
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