Friday turned out to be a wild session as all the action came into the close and after the bell with big news from the Federal Reserve, big volume in Tesla (TSLA) and big earnings results from Nike (NKE).
Market Breadth | NYSE | NASDAQ |
Advancing | 1,334 | 1,667 |
Declining | 1,809 | 2,112 |
52 Week High | 270 | 446 |
52 Week Low | 4 | 8 |
Up Volume | 2.46B | 3.47B |
Down Volume | 4.62B | 3.59B |
Market breadth was negative despite the strong rally during the final minutes of trading. Five of the eleven sectors edged into the plus column, but there was more conviction to the downside, especially in Energy and Real Estate.
S&P 500 Index | -0.35% | |
Communication Services XLC | +0.09% | |
Consumer Discretionary XLY | -0.49% | |
Consumer Staples XLP | +0.22% | |
Energy XLE | -1.67% | |
Financials XLF | -0.87% | |
Health Care XLV | +0.08% | |
Industrials XLI | +0.01% | |
Materials XLB | +0.45% | |
Real Estate XLRE | -1.73% | |
Technology XLK | -0.35% | |
Utilities XLU | -0.86% |
Big Friday Afternoon
The Federal Reserve allowing big banks to buy back their own shares is huge news. The cap on higher dividends remains in place, however.
Nike’s (NKE) earnings is a reminder that global duopolies (only true rival is Adidas) come back faster than other businesses -no matter the industry. Hint: Boeing (BA) has huge structural issues and macro headwinds, but the stock could be a huge winner once investors look past 2021.
Portfolio Approach
We added a new position in Materials on Friday in the Hotline Model Portfolio.
Today’s Session
Equity futures have been under pressure all morning long, as scenes of Londoners attempting to flee the city unnerved financial markets around the world.
New lockdowns, along with reports of a mutated strain of Covid19 that apparently was much more contagious, sparked the panic. Most reports say the strain is not deadlier, but the news, coupled with other factors, is triggering hysteria.
In addition, many European nations are blocking the entrance of British travelers. I’m sure none of this has anything to do with Brexit talks.
Equity Futures
S&P 500 futures were down as much as 3.0% this morning but have come back a little more.
Key intraday Support
- S&P 500 3.596
- NASDAQ 12,463
- Dow Jones 29,318
- Russell 2000 1,878
It will be very interesting to see if these numbers are tested (more than fifty percent chance they will be) and if they hold.
Congress reaches agreement on $900 billion stimulus bill and omnibus spending bill to fund government
It's hard to believe we had to wait this long for the plan coming out of Congress this weekend, but here we are. Remember Nancy Pelosi turned down $1.8 trillion so President Trump wouldn’t get a “win.”
Highlights
$600 person stimulus check
- Incomes $75,000 or less
- Children older 16 phased out
- $2,400 cap family of four
$300 Week supplemental pandemic unemployment benefits
$284 billion SBA/PPP
$17 billion Transportation
- $15 billion airlines
- $1.0 billion Amtrak
- $1.0 billion misc.
$69 billion Vaccine distribution
$25 billion Rental assistance
$14 billion Public Assistance
$10 billion Childcare
$1.9 billion Replace Huawei and ZTE equipment
Rescinds
$429 billion in unused CARES Act funds
Ends Federal Reserve Lending Facilities (cannot be duplicated without Congressional approval)