We got a new high on the S&P 500 on Friday’s close which means the stock market is looking past the global pandemic and towards the recovery of 2021. On Monday, Pfizer and BioTech announced that their preliminary work on a vaccine was highly effective which means that we are turning the corner on this global pandemic which is great news.
There are many questions about the current politics and policies but the next two years will be about rebuilding the economy and jobs. Hopefully, our politicians take a supportive role in maintaining a pro-business environment and let the free market do it’s job.
In the meantime, the coronavirus is spreading across this country as winter approaches. Fortunately, we have treatments and protocols that we didn’t have last March so we should be able to make it through this winter to 2021 and the next phase of our lives. It is a rarity that a society shares in an adverse situation like a global pandemic or a world war so a unifying recovery may be just what the stock market is sniffing out as we make new highs.
Below is the S&P 500 chart this week. Not much to say other then that a new uptrend may be underway. If we stay in a new trend channel then we will climb higher in a low(er) volatility environment for the next 1-2 years. One step at a time as we need to see a vaccine that is viable and distributable.
Chart of the Week!
Economic & Central Banking Snippets
- For the week ended Nov 7th, initial jobless claims fell to 709k from 757k which was below the estimate of 731k.
- U.S. consumer prices were flat in October following four straight months of gains, a sign of subdued inflation amid weak demand for a range of goods and services. Higher costs for dining out and groceries last month were offset by declines for items such as apparel and household furnishings. (WSJ)
- The pandemic is boosting the market for expensive homes. Nearly one in four U.S. home buyers between April and June bought houses priced at $500,000 or more, up from 14% of buyers during the preceding nine months, according to a report from the National Association of Realtors. Many of those who can work remotely are seeking a bigger house with more outdoor space or are buying vacation homes. (WSJ)
- The U.S. Producer Price Index increased for the sixth consecutive month in October by 0.3%, largely driven by an increase in prices for vegetables, according to the Bureau of Labor Statistics. Prices for gasoline, meats, eggs, and thermoplastic resins and materials also moved higher, while prices for light motor trucks, packaged fluid milk, and passenger cars decreased. The moderate uptick in the index reflects the tame inflation rate and a resurgence in new coronavirus cases.
Macro Snippets
- California became the second U.S. state after Texas to see total cases since the pandemic began pass 1 million. The U.S. Centers for Disease Control and Prevention said the tally is currently increasing in 94% of jurisdictions. A study by the University of Washington’s Institute for Health Metrics and Evaluation found that the fatality rate has dropped by 30% since April due to improvements in treatment.
- A vaccine developed by Pfizer and partner BioNTech proved better than expected at protecting people from Covid-19 in a pivotal study, a milestone in the hunt for shots that can stop the global pandemic. The positive, though incomplete, results bring the vaccine a big step closer to getting cleared for widespread use.
- The coronavirus pandemic achieved in a few weeks what the owners of Folgers and Maxwell House have been trying to do for a decade: get people to brew coffee at home again. As Americans suddenly changed the way they spent their days and their dollars, a fierce sales battle emerged between cafes, coffee brands and makers of home-brewing machines. Retail coffee sales are up about 10% so far this year and sales of coffee makers are up 28% since the start of the pandemic. Dunkin’ and Starbucks, meanwhile, are pushing to get customers back into cafes, Annie Gasparro reports.
- Airbnb, DoorDash, Roblox and Wish are all expected to go public before the year’s end, according to CNBC. A source says their filings will be made public by early next week, though the timing could change based on market conditions.
- Pfizer (PFE) CEO Albert Bourla sold nearly $5.6 million of the company’s stock on Monday as the share price soared as much as 15% on the news that its COVID-19 vaccine candidate is 90% effective. (Investopedia)
- Nearly $2 trillion in equity, fixed-income and currency trading occurred Monday in response to a breakthrough in the search for a coronavirus vaccine, powering one of the heaviest trading days since the start of the pandemic. The S&P 500 came close to a September record, the FTSE 100 index reached the highest point since August and the Nikkei 225 index achieved a 29-year high. (Reuters)
- Virgin Hyperloop said its first trial with human passengers was a success, marking a big advancement for the first new form of transportation in over a century. The independently validated test, which used a two-seater Pegasus pod and was conducted in Nevada, will pave the way for hyperloop regulation/deployment in the U.S., and federal funding for projects, according to the company. (Investopedia)
That is all for now and thank you for being a subscriber!
Regards,
President – Kisco Capital