Archives of “April 2021” month

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US Senate rules to allow further Biden stimulus

  
  Analysis

This refers to arcane US Senate rulings that I shall leave it to those interested to chase up on further reading … I am just going to summarise a piece from the WSJ:

  • The Senate’s nonpartisan parliamentarian Monday ruled in favor of a Democratic effort to pass additional legislation through a process called reconciliation
  • Democrats have used reconciliation once this year to pass the $1.9 trillion coronavirus relief package
  • With the parliamentarian’s new advice to lawmakers, Democrats could now possibly use it a third time to skirt the 60-vote threshold necessary for most legislation to pass in the Senate.
Link here for more (Journal may be gated)
Long story, short is it allows MOAR stimulus …
  • “This confirms the leader’s interpretation of the Budget Act and allows Democrats additional tools to improve the lives of Americans if Republican obstruction continues,” the spokesman for Mr. Schumser said.
(Schumer is the Senate Majority Leader … pictured below, in the glasses)
This refers to arcane US Senate rulings that I shall leave it to those interested to chase up on further reading ... I am just going to summarise a piece from the WSJ:

World Bank head expects China, the US & other G20 to extend debt service freeze

  
  Analysis

One for the EM folks, comments from -World Bank President David Malpass on Monday

Report comes via Reuters (link for more):
  • expects an extension of the freeze in bilateral debt service payments through the end of 2021
  • referring to the G20 Debt Service Suspension Initiative (which has helped countries defer some $5 billion in payments through the end of 2020, with another $7.3 billion in deferred payments expected through June
  • Extending the debt payment freeze through year-end would save even more money that countries could use to combat the COVID-19 pandemic and support their economies
—
ps. Not breaking news, was out overnight (i.e. Europe/US time)

Near-term demand for oil may be derailed due to Europe virus debacle

  
  Analysis

A snippet from TD on their outlook (ps. ‘debacle’ in the headline is mine).

Firstly, on last week’s OPEC+ decision (ICYMI, no change to output but Saudi to reduce its voluntary curbs slowly in the on this ahead), re supply:
  • “OPEC+ deciding to phase in production increases over time, when combined with news that potentially there could be more Iranian output, could very well mean that the market perceives there will be an imbalance more than previously”
And, on the demand side:
  • “Demand from Europe being significantly slower may derail” the short-term outlook for consumption of oil
ps. As a counter, Goldman Sachs see increased demand ahead due to northern hemisphere summer months and suggest OPEC+ could increase supply at the next meeting (end of APril).

Barclays says market pricing of the Fed hiking cycle is too aggressive

  
  Analysis

Barclays cite the Federal Reserve’s “new framework” (which, ICYMI, is the Bank wants to see actual inflation above 2%, not just forecasts for inflation)

(which, again ICYMI, will delay any hikes, i.e. there will be no pre-emptive hiking … at least that what they tell us)
But what about tapering of the QE programme? That’s a way off too, Barclays analyst says (even after Friday’s strong NFP):
  • the road to full employment is still long
  • inflation is unlikely to remain at the levels priced in for long
(i.e. Barclays thinking, like everyone else, that the higher current inflation is transitory)
Therfore:
  • Market pricing of one hike by Q1 2022 & almost four by the of 2023 is too aggressive
Barclay’s caveat on there is still a long time until tapering (the first step to ‘normalisation’) is, “unless there has been substantial progress on broader metrics”

Dow and S&P close at record highs

  
Analysis, US Market
#  #  #

Nasdaq still 3.3% from the all time high

The Dow and S&P both closed at record highs. The Nasdaq index rose sharply today, but still trades around 3.3% from the all time high reached on February 16.
For the day:
  • S&P index rose 57.91 points or 1.44% at 4077.78.  At the highs the S&P was up 1.59%. The low was +0.69%..
  • NASDAQ index rose 225.48 points or 1.67% at 13705.59. At the highs the NASDAQ index is up 1.78%. The low was +0.76%.
  • Dow industrial average rose 372.27 points or 1.12% at 33525.48. At the highs the Dow industrial average was up 1.4%. The low was +0.21%
  • The Russell index rose for its 4th straight day. The index closed up 10.98 points or 0.49% at 2264.89. The high took the price up 1.13%. The low was at -0.20%.

Leading the Dow 30 was

  • Walgreens boots, +3.73%
  • Intel, +3.1%
  • Walmart, +2.8%
  • Microsoft, +2.76%
  • Boeing, +2.55%
  • Home Depot, +2.48%
  • Apple, +2.36%

Some other big gainers today included:

  • GM, +5.61%
  • Roblox, +5.22%
  • LivePerson, +4.75%
  • Ford, +4.44%
  • Tesla, +4.36%
  • Rackspace, +4.16%
  • Alphabet, +4.12%
  • Whirlpool, +3.74%
  • Facebook, +3.43%
  • Corning, +3.39%
  • Delta Airlines, +2.91%
  • Dollar Tree, +2.87%
  • Microsoft, +2.79%
soma losers today included
  • Novavox, -4.59%
  • ViacomCBS, -3.97%
  • FirstSolar, -3.61%
  • Gamestop, -2.85%
  • Chewy, -2.16%
  • Schlumberger, -1.96%
  • Snowflake, -1.85%
  • Goldman, -1.27%
  • BedBath and Beyond, -1.0%
  • Nio, -0.86%
  • AirBnB, -0.83%
  • FedEx -0.7%
  • Citigroup, -0.55%

Nomura reportedly to finalise, disclose losses tied to Archegos episode later this month

  
  Analysis

NHK reports

The initial estimates at the end of Q1 had Nomura sitting on roughly $2 billion losses – one of the worst-hit firms from the whole Archegos episode. While this is a rare event in the market, it isn’t one that investors are too concerned about anymore.
But at least it does offer some good lessons on the importance of risk management.

Ray Dalio on Focus

  
Analysis, Education
  • You can have virtually anything you want, but you can’t have everything you want.
  • Life is like a giant smorgasbord of more delicious alternatives than you can ever hope to taste. So you have to reject having some things you want in order to get other things you want more.
  • Some people fail at this point, afraid to reject a good alternative for fear that the loss will deprive them of some essential ingredient to their personal happiness. As a result, they pursue too many goals at the same time, achieving few or none of them.
  • In other words, you can have an enormous amount: much, much more than what you need to have for a happy life. So don’t get discouraged by not being able to have everything you want, and for God’s sake, don’t be paralyzed by the choices. That’s nonsensical and unproductive. Get on with making your choices.
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