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Toppy Tuesday – More Free Money Helps Us Re-Test the Highs

Here we are again!

Dow 30,404, S&P 3,735, Nasdaq 12,840, NYSE 14,405 and Russell 1,996.  Not only did the new $900,000,000,000 stimulus bill get signed but IMMEDIATELY after that, President Trump teamed up wiith the House Democrats to pass an additional $1,400 per citizen (of Georgia) handout to help us pay those Christmas Credit card bills and decide who to vote for in Thursday's Senate Run-Offs.

One of my big concerns is there would be selling ahead of the end of the year but clearly that hasn't happened, possibly because most people's gains are too short-term to have consequences for timing long-term capital gains, which may increase significantly next year under Biden (especially if the Democrats win the Senate).  That hasn't happened so there's no significant pressure to sell and the volume of trading is virtually none so it takes very little to manipulate the market higher and give 2020 a fantastic close – no matter what's actually wrong with the economy:

Date Open High Low Close* Adj Close** Volume
Dec 28, 2020 371.74 372.59 371.07 372.17 372.17 38,851,900
Dec 24, 2020 368.08 369.03 367.45 369.00 369.00 26,457,900
Dec 23, 2020 368.28 369.62 367.22 367.57 367.57 46,201,400
Dec 22, 2020 368.21 368.33 366.03 367.24 367.24 47,949,000
Dec 21, 2020 364.97 378.46 362.03 367.86 367.86 96,386,700
Dec 18, 2020 370.97 371.15 367.02 369.18 369.18 136,542,300

So, if things have seemed quite to you on the trading floor, that's because no one is there!  Just a few bots doing some automated trading and some ETFs automatically putting people's paychecks into overpriced stocks at the end of each day – the market at its finest…

New highs on low volumes don't count – they are unproven and untested and often unrealistic but we'll have to wait a week or so before the traders come back to make real decisions and, by then, we should be getting reports of the holiday virus surge which will hopefully be couter-acted by positive vaccine results and a more concrete roll-out schedule.  Meawhile, between now and next Tuesday, 15,000 more Americans will die from Covid - about 1/2 of the World's total deaths for the week - that's how disproportionately poor our handling of the virus has been!

We are going to ring in the New Year in the US celebrating our 20,000,000th infection and we're going to honor it by carelessly gathering in large groups – isn't that special?  

The only special number we have to worry about is $14Tn, that is the amount of money Central Banks have added to the Global Money Supply this year, up almost 20% from the 80Tn start.  20% more money and no inflation – that is very odd?  Will we have a massive, inflationary boom next year or will it take another $14Tn next year just to fill the gaping hole that's been blown in the Global Economy by Covid?

Stay turned and we'll see.

 


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  1. Good Morning.


  2. Como estas, 1020…….


  3. Phil//  No inflation inspite of massive monetary supply – could that be seen in the stock appreciation, residential realestate apprication and bitcoin?  These assets have spiked so much so the standard inflation gauge isn't catching them since they are not common man's things used on a daily basis.

    Thanks.



  4. Muy Bien snow, y tu como estas?


  5. Que bieno vamos ablar Espaniol ahora


  6. Yodi El Bilingue!  :)


  7. Ja wohl da hast du Recht


  8. me amour….Google Translate. surprise


  9. Je peux faire semblant la plupart du temps….. :)


  10. But don't try it with option trading


  11. Vamos a hablar español aqui? Ou alors français!


  12. Just now Phil thinks he landed at the wrong site.


  13. lol! I'm sad now, that Korean alphabet doesn't show up here.

    Ma'afgan sahaya!


  14. But seeing that he wants to move to Europe in any case he might as well start learning, possible 25 different languages ?


  15. Switzerland has only 4 by them self


  16. Good morning!

    • More market records seem to be in store for today, with futures ahead by 0.5%, after the signing of a COVID relief bill that lifted reopening plays like cruise lines, airlines and casinos. Megacaps led the major averages on Monday, while nine of the 11 S&P sectors ended in the green.
    • "The market right now is clearly foaming at the mouth," said Charlie McElligott, a market analyst with Nomura Securities, though the rapid gains seen this year are dividing some investors on how to proceed in 2021.
    • The bears: Ominous parallels have been made between this market and the internet bubble, and a correction could at least be in the cards. Valuations are also stretched beyond memory, while traditional stock metrics and fundamentals have gone out the window. Runaway shares for recent IPOs like DoorDash, Airbnb and Snowflake could additionally cause some alarm, especially when the companies aren't profitable and CEOs express bewilderment over their stock prices.
    • The bulls: Assurance from the Fed that it will continue easy money policies, keeping markets stable and interest rates low. Retails investors, who have piled into the market this year, also seem to be a driving force for the market's upward trajectory. The contentious presidential election is now over and a national vaccine rollout further signals the start of an eventual return to normal.
    • Looking back: The S&P 500 is up 15.6% for the year and the Dow has advanced 6.5% over that time frame despite the pandemic. The Nasdaq Composite, meanwhile, has soared more than 43% in 2020.
    • Chain store U.S. comparable sales rose 8.9% Y/Y in week ended Dec. 26, accelerating from the 6.5% increase in the prior week, according to Johnson Redbook.
    • December sales are expected to rise 4.9% Y/Y and 0.2% from November 2020.
    • Sales picked up and traffic counts rose in the day leading up to Christmas, with shoppers active in omnichannel shopping, ordering online, in-store shopping, curb pick-up, and home delivery.
    • Nevada Gaming Board reports November gaming win -17.8% Y/Y to $771.2M.
    • Gaming win was down 32.6% to $349.8M on the Las Vegas Strip.
    • Sector Watch: Caesars Entertainment (CZR -0.5%), MGM Resorts (MGM -1.8%) , Boyd Gaming (BYD -0.8%), Wynn Resorts (WYNN -0.3%), DraftKings (DKNG -1.9%), Las Vegas Sands (LVS +0.1%), Churchill Downs (CHDN -1.3%), Penn National Gaming (PENN -1.9%), Full House Resorts (FLL +0.1%) and GAN (GAN -2.9%), Red Rock Resorts (RRR -1.2%).

    Simon Property finally closes Taubman purchase

    • Simon Property Group (SPG +0.4%) completes its acquisition of an 80% stake in Taubman Realty Group Limited Partnership ("TRG"), ending a tumultuous saga that included attempts to end the deal and lawsuits before agreeing on a new agreement in November.
    • As part of the deal, Simon acquired all shares of Taubman Centers (NYSE:TCO) common stock for $43.00 per share in cash.
    • The Taubman family sold about a third of its ownership interest at the transaction price and remains a 20% partner in TRG.
    • "This investment will enhance the ability of TRG to establish innovative retail environments for consumers and to create new job prospects for the communities in which it operates," said Simon Chairman, CEO and President David Simon, noting that the deal adds "some of the world's premier retail assets" to SPG's portfolio.
    • Total consideration for the acquisition, including the redemption of TCO's 6.5% series J cumulative preferred shares and its 6.25% series K cumulative preferred shares, was ~$3.4B and was funded with existing liquidity, including proceeds from Simon's recently completed equity offering.
    • On Monday, Taubman Center shareholders approved the transaction

    FAA introduces new rules to speed drone adoption

    • Federal officials have launched new drone rules that could help open the skies for widespread commercial deliveries, allowing operators to fly small drones over people and at night under certain conditions. The regulations will give the FAA and law enforcement a handle on what's actually flying around in the skies, requiring remote identification technology to pinpoint them from the ground.
    • Meet the new "Remote ID" standard: The new rules eliminate requirements that drones be connected to the internet to transmit location data, but they must broadcast remote ID messages via radio frequency broadcast (meaning they can be used in areas without internet access). Drone manufacturers will have 18 months to begin producing drones with Remote ID, and operators will have an additional year to provide Remote ID.
    • Other rules: For at-night operations, drones must be equipped with anti-collision lights that can been see for three miles. The "small unmanned aircraft must also not cause injury to a human being that is equivalent to or greater than the severity of injury caused by a transfer of 25 foot-pounds of kinetic energy upon impact from a rigid object, does not contain any exposed rotating parts that could lacerate human skin upon impact with a human being, and does not contain any safety defects."
    • Quote from FAA Administrator Steve Dickson: "The new rules make way for the further integration of drones into our airspace by addressing safety and security concerns. They get us closer to the day when we will more routinely see drone operations such as the delivery of packages."
    • Stats: Drones represent the fastest-growing segment in the entire transportation sector, with currently over 1.7 million drone registrations and 203,000 FAA-certificated remote pilots.
    • Some history: UPS (NYSE:UPS) won the government's first full approval to operate a drone delivery airline back in October 2019, while Alphabet's (GOOGGOOGL) Wing became the first company to get certification for a single-pilot drone operation. This past summer, the FAA granted Amazon (NASDAQ:AMZN) permission for delivery trials, while Walmart (NYSE:WMT) jumped into the drone delivery race in September

    Russell got clobbered – down 1.8%.


  17. Stocks/Rookie – Yes, the money has to go somewhere and it's in stocks at the moment but, if the market crashes – then all the money they printed simply disappears.

    • Money is printed – goes right to purchase stocks and bonds.
    • Stocks and bonds inflate by 20%
    • Stocks and bonds then crash 20% and ALL the printed money is wiped out yet the debt is still on the books and we have no long-term assets to show for our spending binge.  

    Languages/Yodi – 4 years of French taught me I suck at languages.  That's why I'm moving to Jersey.

    Chart points to bitcoin ‘peaking out’ in early 2021, trader says. 

    China’s economy is still months away from a full recovery, business survey finds.

    House overrides Trump veto of $740 billion defense bill, sends to GOP-led Senate.

    Surge in online shopping is straining America’s busiest port, official says.

    China's Antitrust Crackdown On Tech's Giants Leads To Massive Losses.

    BMW Will Produce An Additional 250,000 EVs Over Next 3 Years, CEO Says.

    California Gov Warns LA Lockdown Likely To Be Extended; Spanish COVID Deaths Top 50K: Live Updates.

    WHO Chief Scientist Warns "No Evidence COVID Vaccine Prevents Viral Transmission".

    Some of 2020’s Most Expensive Stocks Sink in Year-End Selloff

    Korea’s Consumer Sentiment Retreats Amid Worst Virus Wave

    Chinese Retailers See Rise in Loan Rejections, Beige Book Says.


  18. What is going on with INTC? Spiked suddenly, but I do not see any news


  19. Intel shares are trading higher after Dan Loeb's Third Point reportedly called on the company to explore strategic alternatives.


  20. Thank you, vkat_mn



  21. INTC says they will work with Third Point

    • The bill to raise the latest round of stimulus checks to $2,000 looked to have the votes to pass with some Republican support, but Senate Majority Leader Mitch McConnell blocked the Democrats' efforts to quickly pass it by unanimous consent.
    • The S&P (SP500) -0.2%, which was slightly higher before the move, turned negative. The Nasdaq (COMP) -0.4% and the Dow (DJI) -0.3% are also lower.
    • McConnell didn't elaborate on why he blocked a vote, but said the Senate should "begin a process" on increasing checks that also includes reform Big Tech via Section 230 and investigating claims of voter fraud. Those last two things were what President Trump said he was promised in return for voting for the COVID relief bill that provided checks of $600 per person.
    • Only one of 11 S&P sectors is gaining: Healthcare (NYSEARCA:XLV).
    • Energy (NYSEARCA:XLE) is the weakest sector, despite WTI futures +0.6% rising.
    • The megacaps are split, with Amazon still in the lead.
    • Intel is top S&P performer as Third Point pushes for strategic changes
    • The Federal Reserve is extending its Main Street Lending Program by eight days to allow more time to process a rush of applications it received on or before Dec. 14, 2020.
    • The lending program is one of the emergency lending facilities that Treasury Secretary Steven Mnuchin said would expire at year end because the CARES Act didn't permit it to to be extended. That interpretation has been disputed.
    • The Main Street program is meant to give small and medium-sized businesses access to credit during the pandemic. Until recently, it didn't receive many applications. Mnuchin, during Congressional testimony, said the money could be better spent elsewhere.
    • The extension to Jan. 8, 2021 was approved by Mnuchin, the Fed said.
    • In the first five months of the $600B Main Street facility, only $5B in loans were generated. But as of Dec. 23, there were $14.59B in loans in the facility.
    • The Treasury's decision to end several emergency lending programs run by the Fed had revealed a rift between the central bank and the government agency.
    • Daniel Loeb's Third Point has asked Intel (NASDAQ:INTC) chairman Omar Ishrak to immediately address the company's market share losses and the departure of top chip designers, according to a letter viewed by Reuters.
    • The hedge fund holds a nearly $1B stake in Intel.
    • Loeb says Intel's most urgent problem is the "human capital management issue" as chip designers have left, "demoralized by the status quo."
    • Loeb notes that Intel has lost its foundry pole position to TSMC (NYSE:TSM) and Samsung (OTC:SSNNF,OTC:SSNLF), and AMD (NASDAQ:AMD) is taking market share from Intel's core PC and data center markets. Nvidia (NASDAQ:NVDA) is dominating AI computational models while Intel is barely present in the market, says Loeb.
    • Loeb asks Intel to consider strategic alternatives. A Reuters source says this could include separating chip design from the foundry operations, which could involve a manufacturing joint venture.
    • Intel shares are currently are currently up 6% to $49.88. AMD is down 1.9%.
    • INTC is down 23% YTD, taking a beating after a 7nm process delay due to a defect in the process node, Apple's in-house silicon launch that began a two-year breakup process with Intel, and recent reports that Microsoft is planning its own in-house silicon for data centers and Surface PCs.
    • Redfin's new report indicate a increase of 14% Y/Y to $320,714 in median home sale price during the 4-week period ending Dec. 20.

    • Pending home sales surged 34% Y/Y with single week ending Dec. 20, pending sales growing 30% from the same week a year ago.

    • New home listings for sale were up 12% Y/Y while active listings dropped 31% to an all-time low.
    • For the week ending Dec. 20, the seasonally adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other services from Redfin agents—expanded 23% from pre-pandemic levels in January and February.
    • Mortgage purchase applications decreased 5% week over week (seasonally adjusted) while Y/Y it was up 26% (unadjusted) during the week ending Dec. 18.
    • "Redfin's forecasts suggest the new year will bring many more new listings, but they will likely be snatched up quickly. So if you are a homebuyer, now is a good time to get pre-approved for a mortgage, and come up with your wish-list, so you can act quickly when your dream home hits the market," Redfin chief economist Daryl Fairweather commented.
    • On the other hand, a separate Redfin report says that six of the ten most competitive cities for buying a home this year are in Washington state.

    • Fairweather further adds, 2021 will see more home sales than any year since 2006. Annual sales growth will increase from 5% in 2020 to over 10% in 2021.
    • By the end of 2020, he sees homeownership rates to rise above 69% for the first time since 2005.
    • Danielle Hale, realtor.com chief economist expects 2021 sales to rise 7% and prices to surge 5.7%; high buyer demand and still-lagging supply will keep prices growing.
    • "With home builder confidence near record highs, we expect continued gains for single-family construction, albeit at a lower growth rate than in 2019," SVP, chief economist National Association of Home Builders Robert Dietz commented.
    • Previously: S&P CoreLogic Case-Shiller HPI jumps more than expected in October.
    • Sector Watch: (NYSE:EQR)(NYSE:WELL)(NYSE:TOL)(NASDAQ:LGIH)(NYSE:AVB)
    • ETF Watch: Most of them have outperformed the broader S&P 500 ETF in the past 6 months: (NYSEARCA:XHB)(BATS:ITB)(NYSEARCA:PKB)(NYSEARCA:IYR)

    • Chinese regulators are reportedly looking to reduce the empire of former Alibaba (NYSE:BABA) chairman Jack Ma and could take a larger stake in his businesses, according to Wall Street Journal sources.
    • Ma is also the controlling shareholder of fintech giant Ant Group. Alibaba holds a roughly 33% non-controlling stake in Ant.
    • In late October, Ma, China's richest man, publicly criticized regulators and leader Xi Jinping for stifling innovation and a risk-control initiative, respectively. Days later, regulators suspended Ant Group's plans for a record-breaking dual IPO in Hong Kong and Shanghai.
    • Last week, China launched an anti-monopoly investigation into Alibaba, reportedly concerned about the e-commerce giant's impact on brick-and-mortar stores.
    • Earlier today, Bloomberg reported that Ant Group planned to move its financial operations into a holding company that could be regulated like a bank.
    • Alibaba shares are currently up 5.5% to $234.58.
    • The campaign to vaccinate people against COVID-19 may finally get more workers back to offices in mid-2021 after most office staff have spent the pandemic working from home, the Wall Street Journal reports.
    • Office-building landlords have been hoping for a return to the office for months, especially in New York City, where many smaller enterprises, such as coffee shops and delis, depend on commuters to sustain their businesses.
    • It may take until spring or summer of next year for enough people to be vaccinated, or who have recovered from the virus, to achieve so-called "herd immunity," according to public health officials and real estate executives.
    • A lot rides on the pace of and timing of the return to offices  — landlords including office REITs; commercial mortgage investors, banks and mortgage REITs. In addition, commercial real estate brokers and property managers also depend on the health of the CRE industry.
    • But the repopulation of offices won't take place as quickly as the office exodus occurred, and procedures are likely to be transformed, at least for awhile.
    • Initially, office density is likely to remain low, workers will wear masks, and other safety procedures are likely to remain in place.
    • Furthermore, a number of major employers have already suggested that the workplace will be forever changed, as they shift toward hybrid models that rotate between work-from-home, satellite office, and/or main office sites.
    • Gensler, a design firm, is working with a half dozen Fortune 100 companies on such "hub-and-spoke" strategies, Co-Chairman Joseph Brancato told the WSJ.
    • Some businesses exploring the hub-and-spoke model have started talks with co-working firms like WeWork (WE) and Industrious for the "spoke" part of the model.
    • The lower demand for office space could mean rents will fall as much as 8% next year, commercial real-estate service firm CBRE forecasts. Still, that's not as drastic as the 13% drop in office rents experienced in the wake of the 2008 financial crisis.
    • At least 65% of the U.S. population must be immune to the virus for the contagion rate to decline to fewer than 10 new cases per 100,000/day, the point at which a major return to the office it likely to begin, the WSJ said, citing public health experts.
    • Ashish Jha, dean of Brown University School of Public Health, expects that ~45% of the U.S. population will likely have received vaccines by late spring or early summer. Add to that the 25% of the population that will have contracted and survived COVID-19. (However, it's still unclear how long those who have survived COVID-19 retain immunity).
    • Some companies are moving toward implementing return-to-office plans. In New York, for example, 25 new tenants looking for space entered the office market per week in the first two weeks of December vs. 20 per week in November, data firm VTS said. That's still far less than what it would be in a normal year.
    • On a broader basis, only 22.9% of workers in 10 cities tracked by Kastle Systems had returned to the office in the week of Dec. 16, that's down from 27.4% in mid-October, the highest rate since the pandemic began.
    • Sector stocks to watch include office REITs City Office REIT (CIO -0.8%), JBG Smith Properties (JBGS -1.6%), SL Green Realty (SLG +0.4%), Vornado Realty (VNO -1.1%), and Boston Properties (BXP -0.8%);
    • Commercial mortgage REITs: Starwood Property Trust (STWD -0.7%), Blackstone Mortgage Trust (BXMT -1.0%), Colony Credit Real Estate (CLNC -1.1%), Ladder Capital (LADR -1.3%), Apollo Commercial Real Estate (ARI +0.1%);
    • Property management names: CBRE Group (CBRE -0.6%), Jones Lang LaSalle (JLL -1.3%), and Cushman & Wakefield (CWK +0.7%).
    • S&P 1500 Composite Mortgage REIT Index (purple line) and S&P 1500 Composite Office REITs Index (orange) lag the S&P 500 (blue) and the S&P 500 Industrial REITs Index (green) over the past year:
    • Employees in the New York metro area appear to be the most reluctant to return to the office, according to Kastle Systems data as of Nov. 4.

  22. Not much damage except to the Russell, which should be happy with the $900Bn.  Don't tell me the extra $400Bn was baked in?