Archive for December, 2020

• Morning News: December 4, 2020
  Eddy Elfenbein, December 4th, 2020 at 7:03 am

  Chinese Scientists Claim Breakthrough in Quantum Computing Race

  United States Adds China’s SMIC and CNOOC to Defense Blacklist

  More Than 400 Lawmakers From 34 Countries Back ‘Make Amazon Pay’ Campaign

  DOJ Sues Facebook, Alleging Bias Against U.S. Workers In Favor of Temporary Visa Holders

  Trump Is Holding Out On Supporting The $908 Billion COVID-19 Stimulus Bill Despite More Lawmakers Rallying Round It

  Futures Near Record Highs As Stimulus Hopes Build

  These Five Charts Throw Cold Water on Chances of Santa Rally

  In Blue States and Red, Pandemic Upends Public Services and Jobs

  The Bloomberg 50: The People Who Changed Global Business in 2020

  Warner Bros. Says All 2021 Films Will Be Streamed Right Away

  Southwest Issues Layoff Warnings to 6,828 Employees

  Inside $1 Billion Meal Kit Startup Gousto, the Pandemic Unicorn Expecting Its First Profit and Doubling Monthly Orders

  Joshua Brown: Here Comes the Digital Dollar! & Gold vs Bitcoin, German Stocks At New Highs, Biotech Breaks Half-Decade of Consolidation

  Ben Carlson: How I Invest My Own Money

  Howard Lindzon: Koyfin Triples Down On Democratizing Investment Research – Adds Global Equities, My Dashboards Widgets, Drag & Drop, and More!

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• Jobless Claims Fall to Pandemic Low
  Eddy Elfenbein, December 3rd, 2020 at 2:59 pm

  Congress appears to be moving closer to some sort of stimulus deal before the end of the year. Prior to the election, no one was willing to compromise. Now they are. A group of partisan lawmakers put forward plans for a $908 billion plan which could serve as a starting point in negotiations.

  The S&P 500 is up a little bit this afternoon. Earlier today, the initial jobless claims report came in at 712,000. That’s a pandemic low and it was well below estimates of 780,000.

  That marked a decrease from the upwardly revised level of 787,000 a week earlier, a drop likely aided by counting issues associated with the Thanksgiving holiday.

  The jobs market has demonstrated resilience even in the face of the new wave of Covid-19 cases. Claims are off their peak of 6.9 million in late March but remain well above the pre-pandemic record.

  Continuing claims also fell sharply, dropping 569,000 to 5.52 million.

  Tomorrow will be the real test when we get the jobs report. The Buy List is at a new high today although in the Buy List only Disney (DIS) and Intercontinental Exchange (ICE) are at new highs.

  

• Morning News: December 3, 2020
  Eddy Elfenbein, December 3rd, 2020 at 7:01 am

  Chinese Companies to Face More Scrutiny as Bill Clears House

  More U.S.-Listed Chinese Firms Seen Seeking Backup Listings As New Audit Law Looms

  Who Got Rescued?

  How American Investors Are Gobbling Up Booming Bitcoin

  Oil Refineries See Profit in Turning Kitchen Grease Into Diesel

  America’s Greenest Energy Giant Isn’t Trying to Save the Planet

  Marc Benioff Sets His Sights on Microsoft

  Landlords Staring Into Retail Abyss Need More Than a Vaccine

  Singapore Approves a Lab-Grown Meat Product, a Global First

  Google Violated U.S. Labor Laws In Clampdown On Worker Organizing, Regulator Says

  Merck Sells Its Investment Stake in Moderna After Recording A ‘Substantial’ Gain

  There’s a Toxic Cloud Behind the Stock Recovery

  Ben Carlson: Animal Spirits: Raising the Minimum Wage

  Michael Batnick: The Best Movies You Haven’t Seen

  Howard Lindzon: TubeMogul Founder and Entrepreneur Brett Wilson Joins Me on Panic with Friends to Discuss His Full Circle Journey from Entrepreneur to Investor

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• Stryker Hikes Dividend by 10%
  Eddy Elfenbein, December 2nd, 2020 at 6:01 pm

  Stryker (SYK) just raised its quarterly dividend from 57.5 cents per share to 63 cents per share.

  Stryker (NYSE:SYK) announced that its Board of Directors has declared a quarterly dividend of $0.63 per share payable January 29, 2021 to shareholders of record at the close of business on December 31, 2020, representing an increase of 9.6% versus the prior year and previous quarter.

  “We continue to drive solid financial results in a challenging environment, and consistent with our stated capital allocation philosophy, are raising our dividend 9.6%,” said Kevin Lobo, Chairman and Chief Executive Officer.

• What Happened in Ohio County, Indiana?
  Eddy Elfenbein, December 2nd, 2020 at 4:41 pm

  I’m a fan of Dave Leip’s website which storehouses U.S. election results. I was curious to see what county in the country was the best for the Libertarian Party ticket.

  On Leip’s site, it said that was Ohio County, Indiana where Jo Jorgensen got more than 11.48% of the vote.

  I think that’s a mistake.

  No this won’t change the election. But I think someone goofed.

  The fault isn’t Leip’s. I checked with the Indiana Elections Division website and he’s presenting the same data they are. Instead, I think someone messed up the numbers.

  That result is so much of an outlier that it makes me question the data. The votes for the Libertarian ticket in Ohio County was five or six times what one world expect.

  Some commenters on Twitter pointed to the strong showing for the Libertarian gubernatorial candidate, Donald Rainwater. That’s true, but he actually trailed his statewide percentage in Ohio County. The Libertarian candidate for Congress got 2.2% which is about what you’d expect.

  Maybe the Libertarian really focused on this county in southern Indiana. I don’t know. It does seem odd that Jorgensen got 353 votes while Rainwater got 335 votes. Those are numbers easy to confuse.

  Being an investor, you spend a lot of time trying to find numbers that don’t make sense. Perhaps there’s an easy explanation. Many times, there is one. Still, I can’t help noticing that if you took 300 votes from Jorgensen and gave them to Trump, the numbers suddenly fall back into expectations.

  I don’t know what happened, but that sure would explain a lot.

• Disney Hits New 52-Week High
  Eddy Elfenbein, December 2nd, 2020 at 3:26 pm

  The theme parks are closed. The cruise lines are docked. The sports arenas are empty and no one’s at the movies.

  In other news, shares of Disney (DIS) just reached a 52-week high.

  Keep calm and stream on!

  

• November ADP = 307,000
  Eddy Elfenbein, December 2nd, 2020 at 2:03 pm

  The stock market is backing off from its all-time highs set yesterday. As I write this, the S&P 500 is barely negative on the day.

  

  This morning’s ADP report said that private employment increased by 307,000 last month.

  The total represented a decline from the upwardly revised 404,000 in October and is the smallest gain since the 216,000 increase in July, according to the report, which is compiled in conjunction with Moody’s Analytics.

  The revision added 39,000 to the original estimate from October, making the November miss not as bad as it appears. Markets had little reaction to the report.

  “We expected a much weaker number, so this is something of a relief,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

  Wall Street had been expecting 475,000. This is part of a larger trend showing some weakness in the labor market. Tomorrow we get the next initial claims report and on Friday, the big jobs report is due out.

• Morning News: December 2, 2020
  Eddy Elfenbein, 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

  Be sure to follow me on Twitter.

• Hershey Upsets Its Fans
  Eddy Elfenbein, 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
  Eddy Elfenbein, 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: