Taking care of business. Stocks rose yesterday as optimism continues to slush around the markets. President Biden took the helm, and the real work starts… now.
N O T E W O R T H Y
What have you done for me… lately. Ok, ok, I did watch some of the highlights of yesterday’s inauguration. I am sure most of you saw some of it as well, so I will spare you from yet another recap, but there are a few things I would like to point out, not in any specific order of importance. First of all, yes, there were plenty of nice, shiny, and colorful outfits at the Capital yesterday. Typically, it is difficult to really get close-ups of the attendees as they are usually packed in, though the actual number of attendees has been a recent topic for scrutiny. So back to fashion. Yes there was plenty of it, but what was also striking was the lack of it. If you looked through the crowd carefully, you would have seen, one of what I referred to a few days back as one of the Fab 3, Treasury Secretary candidate Janet Yellen. She has been on the scene for a number of years and I am sure she has more than one fashionable get ups standing at the ready for her almost-new-boss’ swearing in. Nope, she donned a hooded, puffy, black parka, scarf, mask (of course), pants, and some very practical shoes. What does that say? It says “I am here to get the job done”. Love it… you do that Janet, because the economy needs you. After a bunch of great speeches, some great singing, some very Colonial looking marching bands, and a very moving poem by a young lady from California (she wore yellow), we witnessed President Biden with a pile of those folders emblazoned with the Presidential seal. You know, the ones that President Trump loved to sign often and show the cameras, usually sporting his very large signature… signature. Those would be executive orders. They are quite common. George Washington actually signed 8 of them during his stint as President. Franklin D. Roosevelt signed no fewer than 3,721 which is the most in history, while William Henry Harrison signed none. In fairness, William Henry Harrison only served for 31 days before dying of pneumonia. President Trump signed 220 executive orders during his single term, which is on the high side (per term) in recent administrations. Actually, it is not about the number, but rather the content. Last night, WHILE YOU SLEPT, President Biden signed a pile of those executive orders, many of them reversing some of Trump’s controversial orders. Unremarkable, except for the ones that got the most attention. Those dealt with the COVID crisis. The most notable thing for us in the investment world, is the new President’s focus on COVID, the vaccine, and the economy. Politics aside, all of the high hopes… and valuations… swirling around in the markets these days, can only be justified if the vaccine rollout is successful. The new President has surrounded himself with practical, realistic, and experienced professionals who give us the best chance of success. Dr. Anthony Fauci was not spotted at the inauguration yesterday because he was busy getting the US back into the World Health Organization, as directed by the President. WHO flaws aside, more resources are better than few in the global fight to end the pandemic. You keep going Dr. F., our health… and the stock market is depending on your good work. Finally, I want to turn to Senator Bernie Sanders, who though popular, has become an overnight media sensation. I don’t know about you, but my evening was dotted with frequent texts and my kids shoving their phones in my face with memes of Bernie Sanders, who was spotted with his own fashion statement. Though he took Janet Yellen’s practical look to a new level sporting a parka, big woolen mittens… and also some very practical shoes. I suppose we would expect that from a Vermont Senator born in New York. The takeaway from that is the ongoing importance of social media. We have learned that it is a powerful tool, which will hopefully be wielded in a responsible way going forward. A mittened Bernie Sanders sitting at the Last Supper, lunching with the Sex and the City girls, on a park bench sitting next to Forrest Gump, and edited into just about every pop iconic picture you could think of… is a good start. All tongue-in-cheek aside… the players are now different but the mission is the same: end the pandemic and support the economy in the interim. The market is counting on it… let’s get to work.
Stocks rose yesterday in response to some very positive early earnings reports. Companies are beating estimates, which is good, but optimism in their guidance provided most of the boost. The S&P500 rose by +1.39%, the Dow Jones Industrial Average climbed by +0.83%, the Russell 2000 Index advanced by +0.44%, and the Nasdaq Composite Index jumped by +1.97%. Bonds also advanced and 10-year treasury yields climbed +1 basis point to +1.09%.
– Housing Starts (Dec) may have grown by +0.8%, down from the prior month’s +1.2% advance.
– Building Permits (Dec) are expected to have slipped by -1.7% while they rose +5.9% in November.
– Initial Jobless Claims (Jan 16) are expected to be 935k, down slightly from last week’s surprise 965k report.
– Continuing Jobless Claims (Jan 9) are expected to be 5.3 million, up from the prior week’s 5.271 million claims.
– This morning, Truist and Fifth Third Bancorp beat estimates while Baker Hughes and FuelCell Energy missed. After the bell announcements are expected from IBM, Intuitive Surgical, PPG Industries, CSX, and Intel.
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