Weekly Market Snapshot – January 11th, 2021

Created by: Sam Tenney

House Democrats on Monday, January 11, introduced a second article of impeachment against President Donald Trump. The article will go to vote Tuesday in the House. ¹
According to JP Morgan, the 140,000 decline in non-farm payrolls for December 2020 is “The clearest evidence yet that the resurgence in Covid-19 cases has stalled the economy”. Service sector jobs have seen the largest loss and slowest growth, with only 54% of jobs recovered so far with industrial sectors recovering 66% so far. Currently, unemployment stands at 6.7%. ²
Raw commodities have been the market winner in recent weeks, with long positions open on commodity futures reaching a level not seen since 2011. With a falling dollar and low bond yields, traders believe commodities are set for a very bullish reversal in the coming months. ³

SOURCES

1. https://www.ft.com/content/906a66c1-01e0-422e-92d2-ebdebf0b95b9

2. https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insig…

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Weekly Market Snapshot – January 4th, 2021

Created by: Sam Tenney

Sunday, December 27th, the White House signed the bill to release $900 billion in stimulus spending and raise the government debt ceiling. The bill includes $600 direct payments to US citizens, as well as many government spending items for the next year.¹
As of January 1st, 2021, the United Kingdom “Brexit” departure from the European Union is official. Tax deals have been reached between the EU and the UK allowing the country to continue no taxes on imports and exports despite leaving the union.²
Calendar year 2020 returns for the US Market ended largely positive, with small cap equities ending the highest at a 20% gain, and real estate the lowest with a -5.0% loss. Nationwide lockdowns hurt the market at the beginning of the year, but massive monetary and fiscal stimulus, along with the reopening of the economy, has likely contributed to the markets positive outlook. ³

SOURCES

1. https://www.ft.com/content/b657be60-ba1a-4f25-8bfe-afd51ef56a8a

2. https://www.bbc.com/news/uk-politics-32810887

3. https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/market…

Weekly Market Snapshot – December 7th, 2020

Created by: Sam Tenney

As of Friday, December 11th, the FDA has approved the first emergency use vaccine for the Covid-19 disease. The Pfizer developed vaccine will be available in the US for immediate distribution to essential workers such as hospital employees. ¹
On Sunday, December 13th, a reported security breach in the IT company SolarWinds allowed a foreign government to access US treasury and commerce networks among other institutions. As of Monday, the government has asked all affected departments to turn off their network systems until a solution is found. ²
As of January 11th, 2021, an Executive order from the White House will ban US citizens from the trade of 31 Chinese securities that have been deemed “Communist Chinese military companies”, including China mobile and China telecom. ³

SOURCES

1. https://www.fda.gov/news-events/press-announcements/fda-takes-key-action…

2. https://krebsonsecurity.com/2020/12/u-s-treasury-commerce-depts-hacked-t…

3. https://www.ft.com/content/5e5bc018-dcf5-4292-877f-040a1aa15ec3

Weekly Market Snapshot – December 7th, 2020

Created by: Sam Tenney

The Government Accountability Office (GAO) in an official report has said it believes the Labor department to have released misleading reports on the week to week jobless claims data, suggesting the economic impact of the virus is worse than official numbers suggest, as well as claiming 29 US states to have improperly paid out weekly unemployment claims, many payments even falling below the national poverty line. ¹
The current Organization for Economic Opportunity and Development (OCED) guidelines suggest a global economic recovery to pre-virus Gross Domestic Product output can be expected by 3rd quarter 2021. However, high debt loads on small businesses driving much of the economies real throughput will be one of the challenges preventing a return to pre-virus nominal growth says the organization.²
The European Union talks with the United Kingdom over the “Brexit” trade negotiations are set to cut-off Wednesday December 10th. Currently the UK is not willing to extend negotiations into 2021, making a no-deal leave from the union a possibility. Currently many of the EU member countries have re-entered national lockdowns due to a rise in Covid-19 cases, raising questions for the future strength of the UK trade balances if a no-deal Brexit happens. ³

SOURCES

1. https://www.businessinsider.com/gao-report-flawed-weekly-jobless-claims-…

2. http://www.oecd.org/economic-outlook/

3. https://www.bloomberg.com/news/articles/2020-12-07/barnier-tells-diploma…

Weekly Market Snapshot – December 21st, 2020

Created by: Sam Tenney

As of Sunday, December 20th, congressional leaders have agreed on a $900 billion fiscal stimulus agreement. The bill included a further $600 in direct economic impact payments and a provision to raise the government debt ceiling. ¹
US Listed IPO’s this year have greatly overperformed, with a record $175 billion in first day offering volume for the year and an average first day return of 40% for the initial offerings.²
Friday, December 18th, the Federal Reserve announced it would re-open banks eligibility for share buybacks, after stopping any public traded banks from buying back shares as a safety measure for coronavirus economic concern.³

SOURCES

1. https://www.ft.com/content/844ed633-ed20-471b-8809-7f049e9e8ecb

2. https://archive.vn/iI3Pz

3. https://www.cnbc.com/2020/12/18/fed-to-allow-big-banks-to-resume-share-b…

Weekly Market Snapshot – November 30th, 2020

Created by: Sam Tenney

US initial jobless claims have risen slightly for the second week in a row, the first time since July we have seen consecutive increases in initial claims. This signals a possible short-term reversal in momentum of the US Covid-19 economic recovery. ¹
The US shopping holiday Black Friday is expected to conduct more online sales then physical retail sales for the first time in history. Around $9 billion in e-commerce spending was done on the holiday, and with foot traffic in retail shopping areas down 52% year over it is expected the physical retail sales will come in much lower than that.²
Bank of America Chief Investment Officer, Michael Hartnett, has said “Dollar Debasement” will be the theme of the coming decade. According to Hartnett, “Runaway stimulus and considerable public sector deficits” among other reasons “will contribute to a declining dollar value over the next decade”³

SOURCES

1. https://www.ft.com/content/4d8d35e9-f415-4cc9-bbf5-3b67ea4a9106

2. https://www.digitalcommerce360.com/article/coronavirus-impact-online-ret…

3. https://gsiexchange.com/will-the-feds-dollar-debasement-trigger-a-struct…

Weekly Market Snapshot – November 16th, 2020

Created by: Sam Tenney

The Consumer Price Index (CPI) was flat for October, registering a net neutral gain compared to September when the index rose 0.2%. This could possibly signal further slowing of the economic rebound, as inflation plays a key role in sustaining early business cycle growth. ¹
Credit card loans continue to deflate month over month, dropping to $755 billion the last week of October, down from $855 billion in February 2020. Most likely continued financial uncertainty has led many consumers to pay down credit card loans. ²
The US Budget deficit has grown more then 100% year over year, with October 2020 reporting a $284 billion budget deficit compared to just a $134 billion deficit in October 2019. This is a combination of increased government spending to combat Covid-19, as well as a decrease in tax revenues from Covid-19 related stay at home orders. ³

SOURCES

1. https://www.nytimes.com/2020/11/09/health/covid-vaccine-pfizer.html

2. https://www.bloomberg.com/news/articles/2020-11-09/eu-gives-green-light-…

3. https://am.jpmorgan.com/blob-gim/1383452890099/83456/weekly_market_recap…

Weekly Market Snapshot – November 9th, 2020

Created by: Sam Tenney

As of today, Monday November 9th, Pfizer has announced a 90% effective Covid-19 vaccine during trial testing. Major indices Dow Jones and S&P opened today up over 4% on the news. ¹
In the aftermath of a World Trade Organization lawsuit against the US for market manipulating aid to Boeing, the EU has levied around $4 billion dollars in tariffs on US goods, mainly Boeing jets.²
The pace of economic recovery continues to slow according to JP morgan, as October total non-farm payroll increased by 638,000 for a 0.5% total increase in employment, the slowest growth to date in payroll. Current total unemployment is at 6.9%.³

SOURCES

1. https://www.nytimes.com/2020/11/09/health/covid-vaccine-pfizer.html

2. https://www.bloomberg.com/news/articles/2020-11-09/eu-gives-green-light-…

3. https://am.jpmorgan.com/blob-gim/1383452890099/83456/weekly_market_recap…

Weekly Market Snapshot – October 10th, 2020

Created by: Sam Tenney

US Government bonds have faced their worse month since June, with yields on the 10-year treasury rising to their 4-month highs of 0.85%. Dan Ivascyn, group chief investment officer at investment firm Pimco, says the 10-year yield could top out at 1.25%¹
The Bank of England is increasing their current quantitative easing program by $100 billion pounds, to help the British economy during the UK’s second round of Covid-19 lockdowns.²
Year to date, the 5 largest stocks of the S&P 500 have returned 36%, while the remaining stocks are down -4% year to date. The market run since the bottom of Covid in March has also brought the S&P to the largest p/e ratio since the tech bubble. ³

SOURCES

1. https://www.ft.com/content/171357af-4d4f-493e-b950-4ca3971e5ad6

2. https://www.bloomberg.com/news/articles/2020-11-01/boe-set-to-combat-new…

3. https://am.jpmorgan.com/blob-gim/1383452890099/83456/weekly_market_recap…

Weekly Market Snapshot – October 10th, 2020

Created by: Sam Tenney

Municipal tax revenues are near record deficits currently, as many municipal cities fail to qualify for direct payments amid a collapse in tax revenues due to Covid-19. States are failing to properly fund municipalities as well, with a record $105 billion budget shortfall this year for states.¹
Domestic bank lending as a percent of assets has fallen to historic lows of 53%, despite near zero interest rate policies instituted by the Federal Reserve. Bank lending provides growth for the US economy through corporate and consumer lending generating economic activity.²
Third quarter earnings season has begun and given current releases estimates are a -15.8% year over year decline in S&P 500 operating earnings. However, 83% of companies have beat expectations and 76% have beat revenue projections. ³