The daily volume of S&P 500 futures is greater than the volume of the stocks that make up that index.
Archives of “February 2021” month
rssWhite House says actively engaged in addressing chip shortage impacting vehicle makers
A spokesperson for the US administration says has asked US embassies to identify how foreign govmts, companies can assist
- officials have met with automakers and suppliers to identify chokepoints
- urging companies to work cooperatively to address the current shoirtage
- reviewing critical supply chains to identify vulnerabilities, take steps including increased US domestic production of chips
- have thanked Taiwan for its efforts to resolve the shortage of automotive chips
—
Many firms are producing flat out, there is no easy short term fix to this. Can’t blame the WH for trying, and maybe they’ll manage to hasten new production, but the fix will be time.
Goldman Sachs with a carry funding tip, use yen instead of USD
Goldman Sachs highlight funding long EM positions with yen, CHF, and the Taiwan dollar
Says these are ‘rate resistant compared with the rising yield in the US:
- short yen, CHF in a reflationary environment
Dow leads the way for the 2nd consecutive day
Record close for the Dow 30. NASDAQ index lags. S&P near unchanged
The Dow industrial average is leading the way for the 2nd consecutive day. The index is also closing at a record level for the 2nd day in a row and is up 3 days in a row.
The S&P index is closing near unchanged. The NASDAQ index and Russell 2000 index – which have led so far in 2021 – are the laggards but off session lows.
The final numbers are showing:
- Dow industrial average +91.52 points or +0.29% at 31614.27
- S&P index -1.16 points or -0.03% at 3931.43
- NASDAQ index -82 points or -0.58% at 13965.50
- Russell 2000, -16.76 points or -0.74% at 2256.13
Leading the way in the Dow 30 today includes:
- Verizon, +5.24%. Berkshire Hathaway increased their position last quarter
- Chevron, +3.01%. Again, Berkshire Hathaway increase the position last quarter
- Home Depot, +2.03%
- Merck and Co, +1.74%
- Nike, +1.62%
Other winners include:
- US steel, +10.12%
- Wells Fargo, +5.17%
- CVS, +3.09%
- Booking.com, +2.31%
- Northrop Grumman, +2.16%
- Bristol-Myers Squibb, plus
- Rite Aid, +1.91%
- Target, +1.59%
- Amazon, +1.21%
Thought For A Day
European shares end the day in the red
German DAX, -1.1%. France’s CAC, -0.3%. UK’s FTSE 100, -0.5%
The major European shares are ending the day in the red. The declines were led by the Italian and German markets. The provisional closes are showing
- German DAX, -1.1%
- France’s CAC, -0.3%
- UK’s FTSE 100, -0.5%
- Spain’s Ibex, -0.4%
- Italy’s FTSE MIB, -1.2%
in the European debt market, the yields are ending mostly lower with UK yields down 5 basis points to leading the way. Italian yields are the only country with higher rates today. They rose by 1.1 basis point.
In other markets as London/European traders look to exit
- spot gold is trading down nearly $20 at $1774. The low price reached $1769.65 as flows followed the dollars movements (as the US dollar moves higher, the price of gold tends to move to the downside).
- Spot silver is down $0.11 or -0.39% at $27.12
- WTI crude oil futures are trading up $0.15 or 0.25% $60.20. It has had a volatile run falling from a high of $61.26 to a low of $59.43 on the back of a Wall Street article saying that Saudi Arabia was looking to rollback the voluntary production cuts.
- Bitcoin is trading up by $2497 or 5.13% at $51086. The high price reached $51,717.88
US dollar strengthens after sizzling retail sales report
EUR/USD falls, near 1.20
The US dollar is near the best levels of the day right across the board after January retail sales rose 5.3%, blowing away expectations for a 1.1% gain.
EUR/USD has been a chief loser in the move, falling 30 pips to 1.2030. The pair hasn’t fallen below 1.20 since February 4.
Other moves are more-modest with the US dollar rising around a dozen pips.
The moves would be larger but there are some automatic stabilizers built into the market. The thinking is that strong data diminishes the need for fiscal stimulus from Congress. So while consumers are better off now, they might not be getting as much help later.
I think this doesn’t change the playbook for Congress so it’s ultimately going to be good for the dollar and equity futures, so long as the Fed doesn’t waiver in its belief that high spring/summer inflation will be temporary.
US PPI final demand for January 1.3%% vs. 0.4% estimate
US PPI data for January 2021
- Final demand MoM 1.3% vs. 0.4% estimate
- Ex Food and energy 1.2% vs. 0.2% estimate
- Ex food and energy, trade 1.2% vs. 0.2% estimate
- Final demand YoY 1.7% vs. 0.9% estimate
- Ex food and energy YoY 2.0% vs. 1.1% estimate
- ex food, energy, trade YoY 2.0% vs. 1.0% estimate
Producer price inflation numbers much higher than expected which will get the market thinking that the wholesale inflation would push into the consumer price data. US stocks are lower with the NASDAQ down around -67 points (as implied by the futures). The Dow industrial average has also moved lower after trading higher. Yields have also moved back toward unchanged level and the longer end.
US January advance retail sales +5.3% vs +1.1% expected
US January 2021 retail sales data:
- Prior was -0.7% (revised to -1.0%)
- retail sales ex auto +5.9% vs +1.0% expected
- retail sales ex auto and gas +6.1% vs +0.8% expected
- retail sales control group +6.0% vs +1.0% expected
Prior numbers and revisions
- December retail sales ex auto revised to -1.8% from -1.4%
- November retail sales ex auto and gas revised to -2.5% from -2.1%
- November retail sales control group revised to -2.4% from -1.9%
Huge beats on retail sales. Those stimulus checks work. There are some minor negative revisions to the prior but they’re eclipsed by the big beats on the headline.
German health minister says that data shows virus variants are spreading quickly in Germany
Comments by German health minister, Jens Spahn
- New UK variant now makes up for more than 20%
- But infections are still decreasing despite higher proportion of new variants
- 10 million vaccine doses will be delivered next week
- More deliveries mean that pace of vaccinations can speed up significantly
Although the virus situation in Germany is taking a turn for the better, lawmakers remain guarded on the spread of virus variants and medical capacity.
For now, the lockdown is extended to March but we’ll see in the coming weeks how the situation develops and if the government feels that enough progress is made to relax restrictions a little ahead of Easter.