Markets, Data Dump, Student Loans, TikTok, Merck, Trading Salesforce

Twenty-three miles outside of the fallen nation’s capital. Everything was apparently lost. The seat of government had been forced to flee the city. Snow. Unending. Heavy for three days now. December 25, 1777. The winter of agony had only just begun. The sentries stood on their hats, just to put something under their bare feet. Twelve thousand soldiers, the last hope of the motley continental army remain on the ground. More than three thousand considered unfit for work due to illness.

Holiday dinner? Everything you could find locally. Sheep, maybe. A few hickory nuts, more likely. Not enough for everyone. Shelter? For the most part, hastily constructed wooden structures and the tattered remains of what passed for tents. It … would be … for all intents and purposes … the nation’s capital for almost the next six months. A few relentlessly persistent soldiers, barely capable of a mission, alone a day’s march from Philadelphia. Thank goodness this enemy didn’t like fighting in the cold.

It was Christmas day. That night his colleagues found him in his tent. As cold as the night air and the ground it rested on. His name was Jethro, a liberated American of African descent who enlisted in Connecticut and died alone of malnutrition and exposure in this semi-forested area of ​​Pennsylvania. He was the first in a long list to die horrific deaths without a fight that winter. We don’t know his last name or even if we had one. We only know that his colleagues called him Jethro, and he had made his mark in order to fight and defend a free home and the ideals we all believe in, but perhaps to him seemed elusive.

The army that left Valley Forge in the spring of 1778 was not the motley crew that sought refuge in the desert that miserable December. They had been trained because newcomer Freidrich Wilhelm von Steuben, who almost certainly presented himself to George Washington as something more than he actually was, had taught the military everything from discipline to small unit tactics of the day. Rather, he was the first true DI (Drill Instructor) in US military history. The Continental Army had grown into a confident and capable fighting force that would spend years more in the field and, with the help of French soldiers and sailors, would gain its independence from the global superpower of the day.

As we stop for the vacation of the year 2021, let’s be thankful to those who forced themselves to endure so long ago when everything must have seemed hopeless. Let’s say a little prayer this Saturday morning as we enjoy the company or at least talk with our loved ones. Let’s say this little prayer for the rest of the soul of Jethro, an American soldier, who died alone in a cold field in Pennsylvania, and for the many who followed him into eternity that winter. To Jethro. Always faithful.

Marlet

Friday could be a public holiday, but it became evident on Wednesday that trading volumes had started to really decline. Wednesday was indeed the second day of a large stock market rally that saw the Nasdaq Composite and the S&P 500 recover both their respective 50-day SMAs and 21-day EMAs. The lack of participation forces us to delay the confirmation that “all is well”. That said, the forces of seasonality are on the “longs” side at this point. Not that a “Father Christmas Rally” is certain. Nothing is ever certain. That said, the last week of the calendar year over the past 15 years provided 10 winners and five losers for an average return (S&P 500) of 0.88%.

On Wednesday, the 11 SPDR ETFs selected by the S&P sector closed in the green, led by Consumer Discretionaries (XLY) which were led by automobiles which were in turn led by Tesla (TSLA). The tech (XLK) and healthcare (XLV) sectors also both posted gains of over 1% as non-cyclical, non-defensive, and growth-type stocks really stood out for the session. The US Treasury yield curve, VIX Put / Call ratios and (CBOE) all appear to have stabilized. The winners beat the losers Wednesday by three to one on the NYSE and by about five to three on the Nasdaq. The progress volume comprised 75.1% of the NYSE composite and 65.3% of the Nasdaq composite. Overall trading volume, as mentioned above, was low, down 19.5% from Tuesday’s totals for names listed on the NYSE, and down 11.2% from Tuesday for names. listed on the Nasdaq market site.

Data dump

Jingle Jingle. This is the season … for the federal government to literally stuff you with a ton of macroeconomic data in a matter of hours. Can you handle data on jobless claims, personal income, personal spending, consumer inflation, durable goods orders, new home sales and consumer sentiment in about 90 minutes? Can algos? Yes they can, so you have to be able to too.

While all of the data points mentioned above are important in the bigger picture, Core PCE on an annual basis is what financial markets will grasp. Wall Street is looking for a 4.5% impression for November, down from 4.1% in October. By comparison, the core CPI for November rose to 4.9%. The CPI is produced by the Bureau of Labor Statistics, while the PCE printout is provided by the Bureau of Labor Statistics and is what the Fed refers to when “it” mentions inflation … CPI since many years.

Savings

President Biden on Wednesday … extended the pause on student loan repayments for another 90 days as the Omicron variant of the SARS-CoV-2 coronavirus rapidly spreads across the country. This extension will postpone the expected resumption of individuals servicing these loans until May 1. Meanwhile, a total of 41 million borrowers are saving an estimated total of $ 5 billion per month, while preventing an unknown number of these borrowers from defaulting.

Thank you, no thank you

On Wednesday, the FDA issued an Emergency Use Clearance (EUA) for Paxlovid, the oral antiviral treatment developed by Pfizer (PFE) that showed an 89% effectiveness rate in reducing the risk of hospitalization compared to to a placebo for adults with Covid-19. The authorization was awaited.

Markets expected that Merck’s antiviral (MRK), Molnupiravir, could also get an EUA this week, but so far this has been a “no-go”. Instead, after Phase 3 trials showed this treatment reduced the risk of hospitalization by around 30% for patients with Covid, France became the first country to publicly cancel a drug order, based on the results of this study. The UK, by contrast, placed an order on Wednesday for an additional 1.75 million courses of therapy, pushing the country’s total order to 2.23 million courses.

No way man

According to Cloudflare (NET), the TikTok app owned by Chinese company ByteDance was the most visited website in the world in 2021, dethroning Google (GOOGL) from Alphabet, the 2020 champion, which came in second place this year. Meta Platform (FB) will end the year in third place. Just for the record, I’ve never been to TikTok yet. I guess I am offline.

Perhaps even more exciting was the news, or rather a report on the “Mashed” website that suggested Yum’s Taco Bell fast food chain! Brands (YUM) could take a page from McDonald’s (MCD) McRib playbook and consider returning the fan-favorite item “Mexican Pizza” to the menu, perhaps for a limited series. Taco Bell has not confirmed the possibility. On that note, I savor at least one McRib every year and look forward to Mexican Pizza’s return.

Battle line

Anyone else watching this epic 200-day ADM battle for customer relationship management software giant Salesforce (CRM)? It is something to see. From 10,000 feet, readers will see support that presented itself at the near-perfect 61.8% Fibonacci retracement of the March through November rally. Note that the quick retracement came out of a failed cup with a grip pattern that left an unfilled gap between $ 277 and $ 283.

Now readers will see a Relative Strength Index trying to recover from technically oversold territory, a full stochastic oscillator still screaming “Oversold” and a daily MACD that looks like Tokyo the day after King Kong’s little visit and Godzilla. . Let’s take a closer look.

Just look at this fight at the 200 day line. For new kids, the 200 day line is where risk managers often force portfolio managers to act. Find help? They add exposure. Lose that line, and they’ll reduce exposure in the blink of an eye and blame each other down the road. Note that the 200 day line was indeed support in early December and has been resistance for the past four sessions. That said, the stock never lost touch with this line.

I bet on Salesforce in “after hours” trading and added to my existing long position. I canceled my old price target which was closer to $ 400 than $ 300. Now I’m just looking to fill this gap. I’ll cut the bait as soon as I see that line break and notice other portfolio managers running for the hills. Fortunately, I am my own risk manager.

Economy (All Eastern hours)

8:30 a.m. – Initial unemployment claims (weekly): Expected 203K, Last 206K.

8:30 a.m. – Continuing complaints (weekly): Last 1,854M.

8:30 a.m. – Personal income (November): Waiting 0.5% m / m, last 0.5% m / m.

8:30 a.m. – Consumer spending (November): Waiting 0.6% m / m, Last 1.3% m / m.

8:30 a.m. – PCE price index (November): Expecting 5.6% y / y, last 5.0% y / y.

8:30 a.m. – Core PCE Price Index (November): Expecting 4.5% y / y, last 4.1% y / y.

8:30 a.m. – Durable goods orders (November): Expecting 1.5% m / m, Last -0.5% m / m.

8:30 am – ex-Transport (November): Waiting 0.6% m / m, Last 0.5% m / m.

8:30 am – ex-Defense (November): Expecting 1.2% m / m, last 0.8% m / m.

8:30 a.m. – Basic equipment items (November): Expecting 0.5% m / m, Last 0.6% m / m.

10:00 am – New home sales (November): Expected 770K, Last 745K SAAR.

10h00 – Sentiment of consumers of U de M (Dec-F): Flashing 70.4.

10:30 am – Natural gas inventories (weekly): Last -88B cf.

1:00 p.m. – Baker Hughes oil rig count (weekly): Last 475.

The Fed (All Eastern hours)

No public appearance planned.

Highlights of today’s earnings (Consensus expectations for BPA)

Before the Open: (SAFM) (6.19)

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About Judith J. George

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