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“Saturn was going to cross Mercury”
Posted by Eddy Elfenbein on January 14th, 2021 at 3:08 pmBitcoin seems so flighty, some might argue you may as well consult a crystal ball, read the runes or stare at the stars to divine the direction of the capricious cryptocurrency.
Enter Maren Altman, bitcoin investor and astrologer.
The New Yorker has been following the movements of celestial objects to predict bitcoin price fluctuations since last summer. And while many people might mock her methods, she has built up a 1 million-strong social-media following on TikTok.
Last week, the 22-year-old told her followers to watch for a price correction on Jan. 11.
Why? Saturn was going to cross Mercury.
Lo and behold, bitcoin fell as much as 21% on that day, before recovering most of its losses, slamming the brakes on a meteoric rally that saw it double from early December to a record $42,000 last week.
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Jobless Claims Rose to 965,000
Posted by Eddy Elfenbein on January 14th, 2021 at 11:54 amThis morning’s jobless claims report was a bad one. The government said that 965,000 Americans filed jobless claims. That’s the most since August and it’s a clear sign that the trend has turned. Wall Street had been expecting 800,000.
This is more confirmation of last week’s lousy jobs report. Two weeks from today, we’ll get our first look at Q4 GDP and I’m afraid it won’t be good.
Still, the jobless number for the week ended Jan. 9 was another sign of economic turmoil brought on by restrictions in activity aimed at combating the pandemic. The total was the highest since the week of Aug. 22, when just over 1 million claims were filed.
Continuing claims also were higher, rising 199,000 to 5.27 million. That figure runs a week behind the weekly claims total and increased for the first time since late November.
There’s unusual market action today. Stocks are up modestly, but small-caps are doing very well. As I write this, the Russell 2000 is up 1.88% while the S&P 500 is up just 0.20%. Since late September, the Russell 2000 ETF (IWM) is up close to 50%.
On our Buy List, we have new highs today from Ansys (ANSS), Cerner (CERN), Heico (HEI), Miller (MLR) and Trex (TREX).
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Morning News: January 14, 2021
Posted by Eddy Elfenbein on January 14th, 2021 at 7:04 amGermany’s Economy Contracted By 5% in 2020 As Coronavirus Lockdowns Hit Growth
China Ends 2020 With Record Trade Surplus as Pandemic Goods Soar
Biden to Unveil Plan to Pump $1.5 Trillion Into Pandemic-Hit Economy
Cash, Breakfasts and Firings: An All-Out Push to Vaccinate Wary Medical Workers
U.S. Decides Against Investing Ban on Alibaba, Tencent and Baidu
Cathie Wood’s Vision for Space ETF Sends Whole Industry Soaring
Wall Street Fumes Over Last-Minute Rule From Trump Bank Watchdog
Circle K’s Owner Offers $20 Billion for France’s Biggest Retailer
Wells Fargo CEO to Unveil Cost-Cutting Plan
Millions Flock to Telegram and Signal as Fears Grow Over Big Tech
Parler CEO Says Social Media App, Favored by Trump Supporters, May Not Return
Intel, Under Pressure to Rethink Its Business, Ousts Its Chief Executive
Cullen Roche: 2021 World Podcast Tour Begins!
Howard Lindzon: It’s All Ball Bearings…And Hydrogen – The Fletch Investor
Joshua Brown: What Is The Penalty For Being Wrong?
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December CPI +0.4%
Posted by Eddy Elfenbein on January 13th, 2021 at 11:31 amThe government released the inflation report for December this morning. The headline rate of inflation was 0.4% last month. That was in line with forecasts, though much of the increase was due to gasoline. For December, gasoline prices rose by 8.4% and that accounted for 60% of the rise in December’s CPI.
Last month’s CPI readings were in line with economists’ expectations. The CPI rose 1.4% in 2020. That was the smallest yearly gain since 2015 and was a deceleration from 2.3% in 2019.
The CPI increased at a 1.7% average annual rate over the last 10 years.
The core rate of inflation, which excludes food and energy, rose by just 0.1% last month.
Economists are divided on the outlook for inflation this year. Some believe inflation will breach its target, citing nearly $900 billion additional pandemic relief approved by the government in late December and expectations for more fiscal stimulus from incoming President Joe Biden’s administration and the Democratic-controlled Congress.
Biden will be sworn in next Wednesday. Indeed, U.S. Treasury yields have risen in anticipation of stronger economic growth in the second half of the year. A survey this month showed a measure of prices paid by manufacturers jumped in December to its highest level since May 2018, likely reflecting bottlenecks in the supply chain caused by the virus.
The bond market seems to be more concerned about inflation. This summer, the yield on the 10-year Treasury was just 0.5%. This morning, it got to 1.18%. That’s hardly a big increase but it’s interesting to note.
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Morning News: January 13, 2021
Posted by Eddy Elfenbein on January 13th, 2021 at 7:01 amChina’s Economy Surges, and So Does Its Currency
Dubai Loan Standoff Is Said to Pit State Company Against Lenders
Global Banks Warn of Market Chaos If Court Abolishes Libor
Potential Priorities for Wall Street’s Next Top Cop
Elon Musk Loves China, and China Loves Him Back—for Now
Air Cargo Construction Is Booming, Thanks to Amazon
PC Giant Lenovo Plans China Listing, Sending Stock Soaring
Visa and Plaid Scrap $5.3 Billion Merger Agreement
Target Boosts Holiday Sales During Covid-19 Pandemic
YouTube Suspends President Trump’s Account
Trump Suspension to Test Twitter CEO’s Truce with Investors
Apple Invests Millions to Back Entrepreneurs of Color, Part of Racial Justice Effort
Google Backs Biden Immigration Efforts, Covers Fees in Threatened ‘Dreamer’ Program
Nick Maggiulli: Just Take the Money
Ben Carlson: Why People Won’t Change Their Mind
Howard Lindzon: Twitter and Trump…Continued
Joshua Brown: Is Chamath the New Warren Buffett?
Michael Batnick: Animal Spirits: The Next Tesla Is Tesla, Rotation & Knee-jerk Dismissiveness
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The Dow’s Return by Day of the Month
Posted by Eddy Elfenbein on January 12th, 2021 at 2:12 pmIn previous posts, I’ve crunched the numbers on the entire +120-year history of the Dow Jones Industrial Average to find certain calendar effects. For example, the stock market has historically experienced a nice Santa Claus Rally around Christmastime. Looking at 10-year slices, the market has also perked up in the latter half of a decade.
There are lots of these tidbits. I don’t take them too seriously since I’m geared toward the long term. My latest look, however, was startling. I broke down the entire history of the Dow to see its return by day of the month, meaning its calendar day (the first, second, third, etc.).
The results shocked me. Nearly the entire gain of the Dow has come during the first six days of the month. During the rest of the month, the market is up but a very tiny bit.
I took the Dow from its first day in May 1896 through the end of 2019. Here’s what the average month looks like:
On the first six days of the month, the Dow has gained 54,752%. That’s an average gain of 0.59% per those six days. Over the rest of the month, the Dow has gained just 28%. That’s 28% in over 27,000 trading days. Per month, the return works out to 0.05%.
In plainer terms, in the first six days of each month, the stock market has gained more than 10 times what it does compared with the rest of the month.
Obviously, it’s very expensive to dart in and out of the market so frequently. No serious investor should behave that way, but this does illuminate a broader fact of investing: returns are seldomly equally distributed.
The market has also done well towards the end of each month. Over the 26th through the 31st, the Dow has averaged a gain of 0.27%. (Bearing in mind that only seven months have 31 days, of course.)
That means that from the 7th to the 25th of each month, the Dow has lost an average of 0.21%. The rest of the time, the Dow has gained an average of 0.86% per month.
Here’s the return by each day of the month:
Here’s the date, the return for each day of the month and the number of times that day came up.
Eddy Elfenbein is a Washington, DC-based speaker, portfolio manager and editor of the blog Crossing Wall Street. His