stock market morning report

Before The Bell: Bullish Trend Continues But Bears Coming Soon?

Wall Street has yet to run out of steam and the major indexes extended their winning streak to 6 straight sessions and soared to fresh record highs Monday. The NASDAQ led the rally with a 0.95% pop to 13,987 as the 14,000 level calls.

The S&P 500 was up 0.74% to 3915 as it targets 4000. And the Dow was 0.76% firmer at 31,385 as it aims for 31,400 near term. The strength in risk appetite and the advent of supply weighed on Treasuries but yields closed well off of early highs. The wi 30-year tested 2% and the wi 10-year cheapened to 1.215%, which proved to be buying opportunities, as rates finished at 1.955% and 1.190%, respectively. Key market movers:

  • U.S. calendar includes JOLTS job openings, NFIB small business optimism
  • Canada data calendar thin this week; wholesale trade is due Friday
  • Dollar came under across-the-board pressure amid revitalised reflation trade
  • Tesla parked $1.5 bln in Bitcoin, driving 20%-plus surge in crytocurrency
  • EGBs supported, Treasuries outperformed as stock rally stalled
  • ECB’s Lagarde: virus mutations add to downside risks, stimulus still necessary
  • German trade stagnated in Dec, trade surplus narrowed markedly in 2020
  • European calendar quiet with only German trade data for December

Today’s calendar remains very thin. December JOLTS job openings on tap, along with the January NFIB small business optimism index, and weekly chain store sales. The Treasury will auction $58 bln of 3-year notes. The wi cheapened slightly Monday to 0.200%, but that would be the lowest award rate since October’s 0.193%.

BEAR Alert: California pulls back on reopening because of the increased number of virus cases. This could lead to more lockdowns across the US and be bad for the markets. Yesterday California announced sweeping new restrictions, meanwhile Florida (which is does not have restrictions) just reported more than 10,000 new coronavirus infections for the fith time in less than week.  We are likely to see more states across the U.S. struggled to deal with the increased cases and possible new variations of the virus.

The Fed’s Bullard speaks on monetary policy and the economy. Today’s earnings calendar includes reports from Cisco Systems, S&P Global, Fiserv, DuPont, Twitter, Exelon, Centene, Carrier, Transdigm, Welltower, Enphase Energy, Incyte, Martin Marietta Materials, Akamai, Fox, Canopy Growth, Lyft, Masco, FMC, Gartner, Omnicom, Arch Capital, and Crown Holdings.

The Senate impeachment trial of ex-President Trump begins but a conviction is again highly unlikely.  It will not affect the markets, but will be huge circus.

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