Another record-setting day as the market celebrates the passage of the stimulus bill.  With a very light day of earnings and economic news, you might want to keep an eye on the Senate today as they deliberate on the $2000 direct payments bill passed by the House yesterday.  It could make for some interesting political drama, and their decision could have significant market ramifications. 

Overnight Asian markets were mixed but mostly higher as the NIKKEI surged to price levels not seen since the early 1990s.  European markets are green across the board this morning, and the U.S. futures point to more new record highs as the bulls continue to march higher.  Remember, volume and momentum can quickly diminish as we approach the holiday shutdown plan your risk accordingly.

Economic Calendar

Earnings Calendar

On the last trading Tuesday of 2020, we have a light day of earnings with just one verified report coming from JRJC.

News & Technicals’

After a record-setting day, futures continue to push higher in reaction to the stimulus bill’s passage.  Yesterday the U.S. House passed a bill to raise direct payments to $2000, and they easily gained the 2/3 vote required to override the President’s veto of the defense bill.  The focus will now turn to the Senate as the legislative year draws to a close.  Treasury yields continue to rise this morning and may well react depending on the Senate vote on stimulus checks.   The Boeing 737 Max returns to the air here in the U.S., which may be good timing with investors seeing a bright near-term future for airlines anticipating a significant return to air travel post-pandemic environment. 

Although the market remains in rally mode, it’s a bit difficult for me to be excited about the rally, with volume likely to shrink heading toward the New Year’s shutdown.  The Absolute Breadth Index continued to decline yesterday, indicating fewer and fewer stocks are holding the market up.  The T2122 indicator also supports that thought showing a modest decline yesterday as the market rallied.  The tech giants AAPL, AMZN, GOOG, MSFT, did most of the work yesterday, enjoying strong buy-side pressure.  Plan your trading carefully as volume and momentum can quickly fade as we approach the holiday.

Trade Wisely,

Doug