Happy New Year! The markets will get right back to work after the holidays. Remarkably, the three indexes together have managed to set 102 record closing highs last year amid unprecedented monetary and fiscal support, along with vaccines and therapeutics. However, there are renewed worries given the new virus strains and more stringent lockdowns. Trading could be constrained today ahead of the Georgia Senate runoff elections tomorrow that will determine control of the Senate and thus the legislative agenda. (Excerpt from Advisor Market Report)
The S&P 500 and US equities are currently consolidating and are still very bullish. However, the big mover last night/this morning was bitcoin which dropped below $28k but jumped back up to $31K. We believe that this could be some people taking their profits in Bitcoin and price correction, but more importantly, that the trend is still very bullish. The chart above shows the S&P 500 & Bitcoin which has soared to record highs in recent months. We continue to be overall very bullish on both the S&P 500 and Bitcoin.
Key Drivers for the Week of Jan 4
TIP – This is a 1 minute brief bullet-point summary as a tool that gives them a fast and simple list of what to watch for and talking points.
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- 2021 begins with fundamentals back in view and key data ahead
- Politics an immediate focus with crucial Georgia runoff and Brexit adjustments
- U.S. calendar includes employment report, risk of negative print; ISMs due
- FOMC minutes and Fedspeak ahead with new voters Evans, Bostic, Daly, Barkin
- Canada employment expected to drop -30k, unemployment is seen at 8.6%, Ivey PMI
- Japan PMIs, auto sales, consumer confidence, PCE; China Caixin PMIs slated
- Brexit likely to see teething problems, especially with boarder controls
- Eurozone calendar: PMIs, ESI confidence, retail sales, CPI, jobless rate due
- German manufacturing orders, industrial production, trade, retail sales slated
- UK CPIS PMIs on manufacturing, services, construction, composite; lending data
A fairly quiet data calendar will see the release of the final December Markit manufacturing PMI. The flash reading dropped to 55.3 from 58.4 in November. However, it remained in expansion for a 5th straight month. Construction spending is expected to rise by 0.7% versus the previous 1.3% gain. Fedspeak returns, with Evans, Bostic, and Mester all on deck. Attention this week will be on Friday’s jobs report given the risk for a negative print.