It would appear the all-or-nothing market is back as investors chose the ignore the lowest productivity reading since 1960 as they rushed to buy something. The Dow has recovered nearly 1800 points since the low of December 1st as we turn our attention to the JOLTS and petroleum data coming out later this morning. Evergrande has now officially defaulted missing payment within the grace period. Still, the question remains if the impacts will spread to the U.S. Plan your risk carefully with the indexes in such an extended short-term condition.
During the night, they continued to bounce lead by the Nikkei up 1.42% shaking off variant worries and ignoring the Evergrande default. European markets trade mixed this morning after two days of solid recovery. U.S. trade in a volatile premaket session reacting to the news from Phizer claiming the new variant can be neutralized with three vaccine doses. Buckle up for another gap higher.
Economic Calendar
Earnings Calendar
We have 27 companies on the hump day earnings calendar, with several unconfirmed reports included in that number. Notable reports include GME, A LOT, CPB, DTC, KFY, PLAB, RENT, RH, SPWH, THO, UNFI, VRA, & WEBR.
News and Technicals’
Facebook is again deferring their return to the office for three to five months. Janelle Gale, Meta’s vice president of human resources, said that Meta recognizes some staff isn’t ready to come back. In addition, Google said last week that it has indefinitely delayed its January return-to-office plan globally. It’s been two weeks since South Africa reported the omicron Covid variant to the World Health Organization. The variant is now spreading around the globe and is now in more than 50 countries. Experts have scrabbled to gain more of an understanding about the new variant, which is a heavily mutated strain of the coronavirus. Day by day, more information and early data have emerged regarding the spread of the variant. President Joe Biden’s nominee for comptroller of the currency, Saule Omarova, has withdrawn her name from Senate consideration for the post. Omarova’s withdrawal came after concerns from Republican senators about her writings as a legal scholar and her background of being raised in the former Soviet Union. Biden condemned what he called the “inappropriate personal attacks” on Omarova, “that was far beyond the pale.” Tesla CEO Elon Musk said he’s against President Joe Biden’s social and climate spending bill, pointing to his concerns with the “insane” federal deficit. “Honestly, I would just can this whole bill,” Musk said late Monday during The Wall Street Journal’s CEO Council Summit. “Don’t pass it; that’s my recommendation.” The bill would provide subsidies for electric vehicles built by union workers and funding for vehicle-charging stations. Treasury yields are slightly lower in early Wednesday trading, with the 10-year falling to 1.4614% and the 30-year drifting lower to 1.7857%.
The all-or-nothing market continues as traders and investors rush back in, shaking off the new variant concerns. In fact, the miss on the trade deficit numbers and lowest productivity since 1960 was ingnored in the rush to buy something. Evergrande has now officially defaulted, failing to make the payment before the lapse of the grace period. Other developers could soon follow as Chinese real estate values decline sharply. The question yet to be answered is, will this contagion spread to the U.S. housing market? One thing for sure is that a 300 billion default will have substantial ramifications. With indexes stretched and testing price resistance levels, we will turn our attention to the JOLTS number this morning. With the Dow having risen nearly 1800 points off the Dec 1st low, a rest or pullback is not out of the question.
Trade Wisely,
Doug
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