FOMC responses coming in – “no surprises” #AnirudhSethi

A summary of the main point Lloyds make about Wednesday’s Federal Open Market Committee

  • policy update contained no surprises.
  • left interest rates and its asset purchase target unchanged
  •  The Fed continues to promise that it stands ready to offer more support to the economy if warranted but there seems to be growing confidence that more action may not be needed. Nevertheless. any tightenng in monetary policy is still probably a very long way away and markets don’t expect an interest rate hike until 2024. 
More:
  • Recent US economic data has actually been mixed
  • the signs are that the vaccine rollout is increasing the Fed’s confidence that economic conditions will improve significantly later this year
  • Hopes of further fiscal stimulus from the Biden Administration probably have provided a further boost
On the ‘tapering’ of QE question, which some officials at the Fed have indicated may commence in 2021, Lloyds remind that Powell has been quick to “stamp on this idea” and reiterated the point again at his presser.
A summary of the main point Lloyds make about Wednesday's Federal Open Market Committee 

US Indices close the day with modest gains in down and up session.

Major indices rebounds off the lows into the close

The major indices opened modestly higher, moved lower into the midday, and rallied back higher into the close before finding some selling at the bell.   The Nasdaq led the way higher with a gain of 0.28%. The Dow was not far behind with a gain of 0.19%
The final numbers are showing:
  • S&P index rose 1.58 points or 0.04% at 3801.19. The high price reached 3810.78. The low price extended to 3776.51
  • NASDAQ index rose 36 points or 0.28% at 13072.43.  The high price reached 13105.03. The low extended to 12963.91
  • Dow closed up 60 points or 0.19% at 31068.69.  The high price reached 31114.56. The low extended to 30888.76
  • The Russell 2000 mid-cap stocks also close higher with solid gain of 1.63%. The index closed at its highs for the day.

Some of the bigger winners today included:

  • Doordash, +14.96%
  • AirBNB, +8.55%
  • Chewy, +7.3%
  • Uber, +7.25%
  • Corsair, +7.09%
  • General Motors, +6.24%
  • Zoom, +5.65%
  • Ford, +5.11%
  • Lyft, +4.78%
  • Tesla, +4.73%
  • Schlumberger, +4.64%
  • Rite Aid, +3.94%
  • Lam research, +3.86%
  • Goodrx, +3.5%
  • Beyond Meat, +3.3%
  • Intel, +3.28%
  • United Airlines +3.26%
  • Goldman Sachs, +2.79%
Losers today included:
  • Western Digital, -3.28%
  • Intuitive Surgical, -3.12%
  • Boston Scientific, -3.10%
  • Comcast -2.93%
  • Twitter, -2.37%
  • Facebook, -2.32%
  • Merck at -2.27%
  • General Mills, -2.16%
  • AMD, -1.94%
  • Visa, -1.93%
  • Intuit, -1.87%
  • Disney, -1.73%
  • Pfizer, -1.59%
  • Box, -1.57%
  • Morris -1.54%
  • MasterCard, -1.52%
  • Black Knight -1.38%
  • Nike -1.35%
  • McDonald’s -1.23%
  • Nio, -1.21%

S&P and Dow close at record levels at year end

Nasdaq the big winner in 2020

The S&P and Dow are closing at record levels at the year end.
  • The Nasdaq led the charge in 2020 with a gain of 43.64% That was the largest gain since 2009
  • S&P was up 16.26%.  Since 2010 the S&P is up 240%
  • 57% of the gain in the S&P was from Microsoft, Amazon and Apple
  • The Dow is closing up 7.25% after spending most of the year in the negative. It wasn’t until the gap break higher on November 9th, that the index moved above and stayed above the closing level from 2019 at 28538.44. The Dow was down over -36% at the March low
The final numbers today are showing:
  • S&P index rose 24.03 points or +0.64% to 3756.07
  • NASDAQ index rose 18.279 points or 0.14% at 12888.28
  • Dow industrial average rose 196.92 points or 0.65% to 30606.48
Some of the big gainers for the year include:
  • Nio, +1112.94%
  • Tesla, +743.03%
  • Zoom, +395.71%
  • Crowdstrike, +324.74%
  • Square, +247.89%
  • Chewy, +209.97
  • Nvidia, +121.93%
  • Paypal, +116.51%
  • Albemarle, +101.97%
  • AMD, +99.98%
  • US steel, +88.93%
  • Slack, +88.03%
  • Apple, +80.75%
  • First Solar, +76.77%
  • Amazon, +76.26%
Some big losers for the year include:
  • United Airlines, -50.9%
  • Raytheon, -46.77%
  • Exxon Mobil, -46.03%
  • Schlumberger, -45.7%
  • American Airlines, -45.01%
  • Wells Fargo, -43.9%
  • Boeing, -34.29%
  • Walgreens, -32.36%
  • Delta Air Lines, -31.24%
  • Chevron, -29.92%
  • AT&T, -26.41%
  • Raytheon technologies, -24.12%
  • Citigroup, -22.82%
  • under armor, -22.42%
  • Boston Scientific -20.50%
  • Intel, -16.76%
  • General Dynamics, -15.61%
  • Southwest air, -13.65%
For the Dow 30, the biggest winners included:
  • Apple, +80.75%
  • Microsoft, +41.04%
  • Nike, +39.64%
  • Salesforce, +36.82%
  • Walt Disney, +25.27%
  • Home Depot, +21.63%
  • Walmart, +21.3%
  • Honeywell, +20.17%
The biggest losers from the Dow 30 include:
  • Boeing, -34.29%
  • Walgreens, -32.36%
  • Chevron, -29.92%
  • Intel, -16.76%
  • Bank of America, -13.94%
  • Merck, -10.06%
  • J.P. Morgan, -8.85%
  • Cisco, -6.69%

Disney boosts Dow into positive territory. The NASDAQ and S&P close lower

Major indices decline for the week

The shares of Disney rose by over 13% and boosted the Dow up by over hundred points alone. That was enough to lift the Dow to a near 50 point gain on the day. However, all the major indices had declines for the week with the S&P leading the way to the downside.

  • S&P posts 3 day losing streak
  • Dow industrial average closes higher for the 1st time in 3 days
  • Russell 2000 has its 6 straight weekly gain as money flows from high cap,to low cap stocks
the final numbers are showing:
  • S&P index fell -4.65 points or -0.13% to 3663.46
  • NASDAQ index fell -27.938 points or -0.23% to 12377.82
  • Dow industrial average rose 46.95 points or 0.16% to 30046.23
for the week:
  • S&P index fell -0.96%
  • NASDAQ index fell -0.69%
  • Dow industrial average fell -0.57%
  • The Russell 2000 gain 0.96% after falling -0.63% today
Some winners today included
  • Disney, +13.59%
  • Goodrx, +9.51%
  • chewy, +9.03%
  • Rackspace, +3.84%
  • Lockheed Martin, +1.78%
  • Microsoft, +1.32%
  • Emerson, +1.3%,
  • Honeywell, +1.25%
Some losers today included:
  • Qualcomm, -7.37%
  • Nio -7.19%
  • Doordash, -6.0%
  • Snowflake, -5.34%
  • American Airlines, -5.17%
  • Corsair, -4.65%
  • Corning, -4.15%
  • Airbnb, -3.93%
Although Doordash and Airbnb make the list of some of the big losers today, their IPOs this week were nothing short of spectacular.
Doordash was priced at $102 and is ending the week at $178.84, while Airbnb was priced at $68 a share and is closing at $139.03.
With all the IPOs being smash before the end of the year, Wall Street is reaping huge rewards. There is no recession there. Meanwhile, there is still no progress on Covid relief today.

Brazil central bank holds rates at 2.00%, says believes inflation is temporary

Comments from Brazil’s central bank

  • Reaffirms forward guidance that it doesn’t intent to reduce monetary stimulus as long as specified conditions met
  • Latest readings in inflation were above expectations
  • Despite the expected cooling in food prices, inflation is still expected to be high
  • Inflation expectations and baseline forecasts remain below target for relevant policy horizon
  • Continues to monitor inflation developments carefully, in particular, underlying inflation
  • Soon the conditions for maintaining forward guidance may not be satisfied
  • Forward guidance removal doesn’t mean rate hike
The drop in BRL this year has certainly been inflationary and that’s unwinding now. At the same time, you can see the growing concerns about inflation.

China November PMIs: Manufacturing 52.1 (expected 51.5) & Non-manufacturing 56.4 (expected 56.0)

These are the official China PMIs for the month, from the country’s National Bureau of Statistics.

Manufacturing 52.1 big beat and at its highest since September 2017

  • expected 51.5, prior 51.4

Non-manufacturing 56.4 also for a beat, expanded for the ninth straight month, best since June 2012

  • expected 56.0, prior 56.2

Composite 55.7

  • prior 55.3
Via Citi:
  • overall production should carry on the momentum
  • export orders were most likely still robust ahead of Western holiday seasons, and domestic demand may continue to hold up
(Citi comments from a pre-releases note)

Stocks up for the 4th straight day. NASDAQ gains 2.5%

Dow, S&P and NASDAQ on track for the best week since April

The major stock indices closed sharply higher for the 4th consecutive day. The Dow, S&P and NASDAQ on track for the best week since April:

  • 10 of the 11 sectors of the S&P closed higher with energy dipping into the negative at the close
  • Dow closes less than 1% below its 2020 breakeven level
  • NASDAQ index is up close to 9% for the week
  • NASDAQ closes less than 2% from the all-time high
  • S&P index closes 2% from its all-time high
  • the S&P index is up 7.4% for the week (was down around 6% last week)
  • 4 straight days higher
The final numbers are showing:
  • S&P index up 67.01 points or 1.95% at 3510.45
  • NASDAQ index up 300.14 points or 2.59% at 11890.92
  • Dow industrial average up 542.52 points or 1.95% at 28390.18
Some oversize winners today included:
  • Qualcomm, +12.79%
  • FirstSolar, +8.91%
  • Papa John’s +8.12%
  • United Airlines +6.0%
  • Southwest Airlines +5.42%
  • American Airlines +5.32%
  • PayPal +5.3%
  • Caterpillar +5.12%
  • J.P. Morgan, +4.05%
  • Bank of America, +3.89%
  • Salesforce, +3.85%
Some losers today included:
  • AliBaba, -2.76%
  • Northrop Grumman, -2.6%
  • Bristol-Myers Squibb, -2.54%
  • Exxon Mobil, -2.11%
  • Lockheed Martin, -1.96%
  • Pfizer, -1.52%
  • Phillip Morris, -0.85%
  • Gilead, -0.4%
  • Snowflake, -0.3%
  • Boston Scientific,

US indices close lower but rebound into the close eases the pain

NASDAQ index leads the way to the downside

The major indices are closing lower on the day but did rebounded into the close which eased some of the downside pain.
  • Dow close that is lowest level since July 31
  • Amazon, Apple close over 5% lower. Apple closes 20% below its all-time high
  • Twitter plunged 21%
  • Facebook fell -6.3%
  • Major indices post the 2nd straight monthly declines
  • Dow has it’s worst month since March
  • NASDAQ closes nearly 10% below its all-time high
  • S&P closes just 1.21% from the 2019 close
  • S&P closes 9% from all time high
The final numbers are showing:
  • S&P index fell -40.15 points or -1.21% at 3269.96
  • NASDAQ index fell -274 points or -2.45% at 10911.59
  • Dow industrial average fell 157.51 points or -0.59% at 26501.68
Looking at the ranges and changes for the major indices in North America and Europe, Portugal led the way to the upside. Other gainers were the France’s CAC, Spain’s Ibex, and Italy’s FTSE MIB. The NASDAQ index was the biggest loser for the day.
For the week,

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Amazon, Facebook, Twitter, Alphabet all come in better than expectations

Amazon:
  • revenues $96.15 billion vs.$92.70 billion estimate
  • EPS $12.37 vs. $7.41 estimate
  • the caveat is AWS numbers came in about expectations and apparently there was favorable taxes
  • Amazon shares are trading down at $3163 after closing at $3211
Facebook
  • EPS $2.71 vs. $1.91 estimate
  • revenues $21.47 billion vs. 19.28 billion estimate
  • Facebook shares are trading down at $275 after closing at $280.83

Twitter

  • revenues 936 million vs. 777 million estimate
  • earnings-per-share $0.19 adjusted vs. $0.06 estimate
  • Twitter is trading down at $46.33 after closing at $52.43
Alphabet
  • revenues 46.17 billion vs. 42.90 billion estimate
  • earnings-per-share $16.40 vs. $11.29 estimate
  • Alphabet shares are trading up at $1638 after closing at $1556.88
Starbucks
  • earnings-per-share $0.51 vs. $0.31 estimate
  • revenues $6.2 billion worth of $6.06 billion estimate
  • Starbucks shares are trading up at $89.40 after closing at$88.30

Fauci on the news wires – sees a whole lot of pain if COVID-19 trends do not change

Dr Fauci, Director of the National Institute of Allergy and Infectious Diseases in the US, in an interview with CNBC

  • sees a whole lot of pain if covid trends don’t change
  • mask-wearing, distancing would have a big impact
  • very little appetite
  • for lockdown in US
  • changes need to be made to combat in US
  • doubtful White House will mandate national mask-wearing