✅ 𝗚𝗔𝗦 𝗪𝗲𝗲𝗸𝗹𝘆 𝟰𝘁𝗵-𝟴𝘁𝗵 𝗝𝗮𝗻 𝟮𝟬𝟮𝟭 ✅

𝙏𝙝𝙚 𝙣𝙚𝙬 𝙮𝙚𝙖𝙧 𝙨𝙩𝙖𝙧𝙩𝙚𝙙 𝙬𝙞𝙩𝙝 𝙖 𝙥𝙧𝙚𝙩𝙩𝙮 𝙨𝙩𝙧𝙤𝙣𝙜 𝙠𝙞𝙘𝙠-𝙤𝙛𝙛 𝙤𝙣 𝙚𝙦𝙪𝙞𝙩𝙮 𝙢𝙖𝙧𝙠𝙚𝙩𝙨, 𝙬𝙝𝙞𝙡𝙨𝙩 𝙫𝙖𝙡𝙪𝙚 𝙝𝙤𝙡𝙙𝙚𝙧𝙨 𝙖𝙣𝙙 𝙞𝙣𝙛𝙡𝙖𝙩𝙞𝙤𝙣 𝙝𝙚𝙙𝙜𝙚𝙨 𝙪𝙣𝙙𝙚𝙧𝙥𝙚𝙧𝙛𝙤𝙧𝙢𝙚𝙙. 𝙏𝙝𝙚 𝙅𝙖𝙣𝙪𝙖𝙧𝙮 𝙚𝙛𝙛𝙚𝙘𝙩 𝙬𝙤𝙧𝙠𝙨 𝙥𝙧𝙚𝙩𝙩𝙮 𝙬𝙚𝙡𝙡 𝙛𝙤𝙧 𝙣𝙤𝙬. 𝙅𝙖𝙣 𝟮𝟬𝟮𝟭 𝙞𝙨 𝙖𝙡𝙨𝙤 𝙩𝙝𝙚 𝙛𝙞𝙧𝙨𝙩 𝙢𝙤𝙣𝙩𝙝 𝙚𝙡𝙞𝙜𝙞𝙗𝙡𝙚 𝙛𝙤𝙧 𝙖 𝙘𝙮𝙘𝙡𝙚 𝙩𝙝𝙧𝙤𝙪𝙜𝙝 𝙨𝙞𝙜𝙣𝙖𝙡 𝙛𝙧𝙤𝙢 𝙤𝙪𝙧 𝙢𝙖𝙘𝙧𝙤 𝙛𝙤𝙧𝙚𝙘𝙖𝙨𝙩𝙞𝙣𝙜 𝙩𝙤𝙤𝙡.

We skipped one short week into the very end of 2020, as I was off for a few days with no access to the internet. Not much much was missed though. End Dec was quiet and with no big action. Unlike the start of Jan 2021, which started on a strong note with investors further pushing stocks higher and selling out of long-term Treasuries ($TLT) and $GOLD ($GLD). New year, new toss, brighter days ahead for the economy are causing LT yields to rise substantially (a really big move last week from 90bpsish to 113bps as of end Fri). This naturally also takes the shine off $GOLD, which is the bigegst loser of the last week. Equities on the other hand started out bullish irrespective of politics. Indices are up 2-3% on week and the market feels very well bid. More on this below.

Let me just note that I have started the process of the Global Leaders Portfolio (GLP) revamp, as the cycle phase change seems imminent now according to our macro forecasting tool (Enhances Aggregate spread by NoSpinForecast). Equity allocation is raised to 33%ish now and will continue to grow going forward. I explain it in details here: etoro.tw/3hR4d6A .

𝗟𝗮𝘀𝘁 𝘄𝗲𝗲𝗸

👉 Monday started surprisingly weak and equities benchmarks sold off across the board. The $DJ30 dropped 1,3% and was even lower intraday (max intraday drawdown over 700pts), $SPX500 slipped 1,5%. This mainly had to do with the US politcal situation. Georgia runoff elections suddenly turned such a close call that the chance of the Democratic Party winning both the Senate and the House of Reps rose significantly. This was naturally perceived as a big risk for Wall Street, as the Democrats in full control could impose higher corporate taxes and pursue a much tougher stance than President-elect Joe Biden presented during the elections campaign. Bellweathers like $KO (Coca-Cola) and $BA (Boeing) fell 4-5%.
👉 Also on Monday a national lockdown in UK was imposed to curb rising cases of the the new Covid type. That did not help markets either.
👉 On Tuesday US $OIL futures surged briefly over USD50/barrell, causing a rise in the energy space. Saudi Arabia announced an unexpected 1m barrell production cut. Leading gainers: $OXY (Occidental Petroleum Corp) , $MRO (Marathon Oil Corp), $FANG (Diamondback Energy Inc), ETF – $XLE. The broad market bounced back and denied some of Monday’s losses.
👉 What was yet a big negative surprize on Monday, put a bid to stocks as soon as Wednesday. Mob was storming the Capitol (unprecedented scenes were shown in the media of rioters sitting on the Reps’ chairs inside the building), President Trump wasn’t helping either, and yet indices ended the day higher. Clean energy names skyrocketed (ETFs like ICLN and specific related stocks like $PLUG (Plug Power Inc) , $ENPH (Enphase Energy Inc.), $SEDG (SolarEdge Technologies), etc. all led the gains).
👉 A bullish call an Biotech ($IBB) from Oppenheimer hit the Street on Thursday. The broker’s analysts say the sector is attractively valued for 2021 with a ‘historically low 97% relative premium’ of Nasdaq Biotechnology Index (NBI) compared to the $SPX500 .
👉 President Donald Trump said in a statement there “will be an orderly transition” of power, shortly after Congress confirmed President-elect Joe Biden’s win. (CNBC) 👉 US 10y Treasury yield rose above 100bps – unthinkable yet a few months ago.
👉 On Friday the Jobless Claims came out below expectations (140k vs. 50k polled). this was mainly attributed to some new lockdown measures across the country. The new stimulus bill talks still put pressure on stocks and yet the indices ended high on the day and the week ended at record highs.
👉 𝙀𝙛𝙛𝙚𝙘𝙩𝙞𝙫𝙚 𝙬𝙚𝙚𝙠𝙡𝙮 𝙞𝙣𝙙𝙚𝙭 𝙘𝙝𝙖𝙣𝙜𝙚𝙨: $SPX500 +1,8%, $NSDQ100 +2,4%, EuroStoxx600 +3%, $GER30 +2,4%, $JPN225 +2,5%.

𝗢𝘁𝗵𝗲𝗿 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗲𝘃𝗲𝗻𝘁𝘀:
👉 𝘽𝙤𝙣𝙙𝙨: the US yield curve (10y-FF) surged to 113bps on expectations of further economic acceleration in 2021, the German curve (10Y Bunds-3M) at 10bps. EuroArea AAA-rated bonds yield curve at 11bps (as of 7th Jan). High Yield Spreads at 3,8.
👉 𝘾𝙤𝙢𝙢𝙤𝙙𝙞𝙩𝙞𝙚𝙨 (𝙚𝙭 𝙤𝙞𝙡): $GOLD -2,7%, $SILVER -3,9% on week. Precious metals lost ground due to the surge in yields.
👉 𝙊𝙞𝙡: +7% on week. !st time above 50$ for a long time.
👉 𝘾𝙪𝙧𝙧𝙚𝙣𝙘𝙞𝙚𝙨: DXY (Dollar Index) +0.2% on week, $EURUSD +0.0%. FX stable

Best, GlobalAlphaSearch.com


Disclaimers: None of the ideas, views and thoughts presented here shall ever be taken as a recommendation to buy or sell stocks,bonds,FX,commodities or any other financial instruments as stated in REGULATION (EU) No 596/2014 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC or the Polish Act of 10 February 2017 amending the act on trading in financial instruments and some other acts. The article is for educational reasons and purely presents private views of the author, thus the author shall not be held accountable for any losses of a third party resulting from any potential trading activities in any instruments, both specifically or by category of assets. The author uses his best knowledge and data from sources believed to be reliable, but makes no representations as to the accuracy of the data.Full Disclaimers&Liability Limitations page.