Morning News: December 2, 2020
Posted by Eddy Elfenbein on December 2nd, 2020 at 7:04 am

U.K. Clears Pfizer Covid Vaccine for First Shots Next Week

Treasury Yield Spike Risks Spreading Across Markets

100-Year Bonds Can Save Us From Inflation

The Biden Spin on ‘America First’

Salesforce’s Benioff Escalates Microsoft Rivalry With Slack Deal

This Japanese Shop Is 1,020 Years Old. It Knows a Bit About Surviving Crises.

Nobody Is Going to Conventions. Convention Centers Are Growing Anyway.

Walmart Axes $35 Delivery Minimum On Website Purchases For Membership Program

Hewlett Packard Enterprise Is the Latest Tech Company to Leave Silicon Valley, And Is Moving to Houston

Elon Musk Would Consider Having Tesla Acquire A Legacy Automaker

Nick Maggiulli: Rich As I Say, Not As I Do

Ben Carlson: How Personal Finance Helped Launch Dazed and Confused

Michael Batnick: The Biggest S&P 500 Addition Ever

Joshua Brown: Josh Is Still Bullish, Would You Buy Airbnb IPO, Dow 30K Takes, Tesla Added to SPX

Howard Lindzon: Airbnb: The Disaster Artist…And 8 to 80 Portfolio Ready at IPO

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Hershey Upsets Its Fans
Posted by Eddy Elfenbein on December 1st, 2020 at 8:20 pm

You know your product is popular when a minor change can upset people. Hershey has altered its classic Christmas bells ad. This did not sit well with everyone.

Commenters were quick to call out the company for revising the commercial in a year that’s already been packed with difficult changes. Multiple people even suggested Hershey create a separate ad with the dad and little girl, in addition to airing its seasonal marketing mainstay.

“I don’t mind an ADDITIONAL holiday commercial for Hershey’s, but warping the classic bells commercial SUCKS!” one person commented on the YouTube video of the new ad.

“The perfect representation of 2020: completely ruined!” added another.

“Look forward to original every year. Why change it? Don’t ruin it just make a separate commercial,” wrote a third.

Criticism of the new ad took off on Twitter, too.

“Hershey’s redoing their christmas commercial is personally the last straw of 2020 for me,” one person tweeted. “I simply cannot go on without hearing the little hershey kiss sigh after the performance of his lifetime.”

How Good Is the 200-Day Moving Average
Posted by Eddy Elfenbein on December 1st, 2020 at 4:13 pm

Here’s a project I was working on this afternoon. I took the data for the S&P 500 going back to 1928 (technically, it wasn’t 500 stocks until 1957). I then divided it into days when the S&P 500 was above its 200-day moving average and days when it was below.

Here’s the chart. The blue is above and the orange is below.

For being such a simple rule, the 200-DMA isn’t bad. When the index has been below its 200-DMA, the market hasn’t gone anywhere. After 92 years, it has lost more than half of its value. For the last 80 years, the S&P 500 has basically been net flat when it’s been below its 200-DMA.

The index has been above its 200-DMA about two-thirds of the time and below it one-third of the time.

Why has the 200-DMA been relatively effective? My hunch is that it plays into a key aspect of the stock market. The stock market moves in trends. A rising market will tend to keep rising, and a falling market will tend to keep falling. The downs are usually more severe. The turning points are the hard part.

The 200-DMA plays off the market’s momentum. It cuts you out of a plunging market even though it will do so after the peak. On the other side, it will get back into the market after the bottom. It locks you into the trend but misses the turning points by a bit. The benefits of the former is more than enough to make up for costs of the latter.

Did it work this year? Here’s a look at the S&P 500 and its 200-DMA:

Another All-Time High
Posted by Eddy Elfenbein on December 1st, 2020 at 11:38 am

November turned out to be an outstanding month for the stock market. I remember there was talk that election-related mayhem could spark a sell-off. Well, that certainly never came.

The S&P 500 opened up this morning in record territory. The index opened at 3,645.87 and quickly raced as high as 3,676.22. There seems to be more optimism for a vaccine and for a stimulus bill. A group of bipartisan legislators unveiled a $908 billion bill.

Zoom, the video conferencing folks, got slammed even though their earnings were fantastic. As always, Wall Street is about expectations. In fact, it’s about expecting expectations. The company expects revenue growth this quarter of 329% and that somehow disappointed investors. Zoom was down as much as 13%.

This morning’s ISM report showed a decrease to 57.5. That’s still a pretty good number. That’s for November. The October report was very strong at 59.3.

We also got the construction spending report which showed an increase of 1.3% for October.

Morning News: December 1, 2020
Posted by Eddy Elfenbein on December 1st, 2020 at 7:06 am

World Shares Rise On Recovery Hopes, Following Stellar November

U.S. Stock Futures Point to Fresh Records for Major Indexes

Biden’s Economic Team Suggests Focus on Workers and Income Equality

FCC Chief Who Ended Net Neutrality Says He’ll Quit Jan. 20

Monopolies Have Made America’s Covid Response Worse

‘Bleak Friday’ for Stores as Pandemic Pushes Holiday Shopping Online

Exxon Faces Historic Writedown After Energy Markets Implode

JD to Raise $3.5 Billion in Biggest Asia Health-Care IPO

G.M. Scales Back Alliance With Electric Truck Start-Up Nikola

LG Chem to Double China Battery Capacity to Meet Tesla Demand

Volkswagen Faces Leadership Crisis As CEO Demands Confidence Vote

Joshua Brown: Five Reasons Why Bitcoin is Going Up

Cullen Roche: Revisiting S = I + (S – I)

Ben Carlson: How a Zoom Meeting Led to My New Book About Saving For Retirement

Howard Lindzon: Momentum Monday – Frothy With A Chance of Mania …Don’y Be Shy But Don’t Chase …AND A Semiconductor Linkfest

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Best November in Decades
Posted by Eddy Elfenbein on November 30th, 2020 at 11:47 am

Today is the final trading day of November 2020 and it looks to be a very good month for stocks. Through Friday, the S&P 500 was up over 11% this month. The indexes are down so far today, but nothing too troubling. Our Buy List is down but not as much as the overall market.

There’s not much in the way of economic news today. The pending-home-sales report showed a decrease of 1.1% for October. That’s not too bad. Over the past year, contract signings are up over 20%.

We’ll soon get the key turn-of-the-month data reports. ISM is tomorrow. ADP comes out on Thursday. Initial claims is Thursday, and the big official jobs report is on Friday. The economy has been showing some early signs of weakness. I think it’s premature to call it a trend, but more data will give us a better look.

Here’s a look at the monthly gains of the S&P 500.

Morning News: November 30, 2020
Posted by Eddy Elfenbein on November 30th, 2020 at 7:02 am

France Thought It Could Reverse Globalization, But It’s Still Bleeding Jobs

The World Is About to Find Out How Tough Biden Will Be on China

Yellen to Forge U.S. Economic Comeback as Biden’s Treasury Pick

Inflation Believers Playing Long Game Are Winning as They Wait

Equity Investors Take Stock of Best Month Ever

Cyber Monday Set To Be Biggest Online Shopping Day In U.S. History

The Luxury E-Commerce Wars Heat Up

S&P Global Agrees to Buy IHS Markit for About $39 Billion

Why Novavax Could Be a Bigger COVID Vaccine Winner Than Pfizer and Moderna

Tony Hsieh Had a 2-Word Employment Policy at Zappos, and It Was Absolute Genius

Hollywood’s Obituary, the Sequel. Now Streaming.

Joshua Brown: The Portfolio Puzzle of Our Lifetime

Michael Batnick: Is Robinhood Good For Investors?

Ben Carlson: Talk Your Book: Investing in Bitcoin & The Best Case Scenario For Bitcoin

Howard Lindzon: Co-Founder and President of Fundamental Global Lewis Johnson Joins Me on Panic with Friends to Discuss the Business of Investing – from Asset Management to the Nature of Cycles

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Morning News: November 27, 2020
Posted by Eddy Elfenbein on November 27th, 2020 at 7:03 am

Brexit Is Nipping at London’s Role as a Financial Powerhouse

A Job for Life, or Not? A Class Divide Deepens in Japan

Stocks Rack Up the Records, Dollar Sings the Blues

Bitcoin Edges Lower to Extend Biggest Slump Since Pandemic Hit

U.S. Money-Market Investors Face Multiple Grim Trends in 2021

The Rich Kids Who Want to Tear Down Capitalism

Amid Pandemic, Earlier Promotions, Black Friday Takes New Shape

This Year’s Black Friday Designer Fashion Sales May Not Be What You Think.

The Surprising Lesson Black Friday and Cyber Monday Can Teach Stock Market Investors

Southern California Port Jam Puts Christmas Toy Supplies In Doubt

Pushed by Pandemic, Amazon Goes on a Hiring Spree Without Equal

Suspected North Korean Hackers Targeted COVID Vaccine Maker AstraZeneca

VW Speeds Up Work on Small Electric Car, Culls Combustion Models

Six U.S. Oil Executives Are Convicted of Corruption in Venezuela

Ben Carlson: Some Things the Pandemic Has Given Me a Greater Appreciation For

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Morning News: November 26, 2020
Posted by Eddy Elfenbein on November 26th, 2020 at 6:35 am

A Soaring Monument to Beauty in China Is Stirring Passions. Mostly Anger.

Expats Are Snubbing London, Paris and Hong Kong

U.S. Economy Stumbles as the Coronavirus Spreads Widely

Bitcoin Plunges Along With Other Coins

The Russell 2000 Has Had A Powerful November — And The Gains Aren’t Over

Here’s Why Elon Musk Isn’t the World’s 2nd Richest Man

Bezos Targeted by Shipping Groups to Save Stranded Seafarers

UPS and FedEx Reportedly Facing Shortage of Delivery Vans

Disney Increases Planned Layoffs to 32,000 As Virus Hits Theme Parks

Penguin Random House to Buy Simon & Schuster

Foxconn to Shift Some Apple Production to Vietnam to Minimise China Risk

After Admitting Mistake, AstraZeneca Faces Difficult Questions About Its Vaccine

Teva, Cephalon Fined $72 Million by EU for Pay-for-Delay Pact

Joshua Brown: Morgan Housel, Christine Benz, Brian Portnoy and I Talk Money & Investing

Howard Lindzon: Dow 30,000 and High Performance Underwear

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The Dow Rises 100-fold in 92 Years
Posted by Eddy Elfenbein on November 25th, 2020 at 11:17 am

The S&P 500 closed yesterday at another all-time high. The Dow closed above 30,000 for the first time ever.

The Dow closed at 300.00 on the nose on December 31, 1928, so that’s 100-fold in 92 years. The index first closed above 3,000 on April 17, 1991.

The market is down so far today. This morning, the government said the report on Q3 GDP growth was unrevised at 33.1%. Bear in mind, this comes after a massive drop for Q2.

Initial jobless claims rose to 778,000. This is the second weekly rise in a row. This is not a good sign, but I want to see more data.

New home sales for October came in at 999,000. That’s the annualized number. The three months prior to that were all revised higher.

For October, personal spending increased by 0.5% while personal income decreased by 0.7%.