Weekly Market Commentary - January 11th, 2021
ROBARE AND JONES ON THE MARKETS
The first week of the new year began with a 1.8% increase in the S&P 500 marking record high in all major indexes. Markets continued to rise this past week amidst the US Capitol building riot, increasing numbers of COVID-19 outbreaks, and Democrats gaining control of both the Senate and the House.
Friday's record highs also came despite weaker-than-expected monthly jobs data. US December non-farm payrolls fell by 140,000 last month marking the first decrease since April. Still, the unemployment rate remained unchanged at 6.7%, better than the Wall Street's view for 6.8%.
This week's advance was led by the energy sector, up 9.3%, followed by the materials sector, up 5.7%, and financials, up 4.7%. On the downside, four sectors fell, led by real estate, which shed 2.6%, followed by a 1% decline in consumer staples, a 0.6% drop in utilities and a 0.3% slip in communication services.
Economic reports to come this week will begin with Consumer Price Index (CPI or Inflation) are due Wednesday followed by weekly jobless claims Thursday and many earnings reports from big banks including JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) are also expected Friday.
Let's take a look at the benchmarks from this past week!
On This Day in History
Alexander Hamilton was born in 1755 and went to be appointed as head of the Department of Treasury by George Washington, amongst many of his other accomplishments. Hamilton wrote the first Report on Public Credit addressing America’s debt stemming from foreign loan military resources for the Revolutionary War.
Hamilton’s attempt to clear the United States of its debt was the beginning of the US Central Bank. The three advocated strategies for clearing the US debt were by taxes, traffic, and treasuries. The US debt was almost completely decimated, but then spiked again due to the Civil War.
Since that time US debt has averaged over 50% of GDP and is now at almost $28 Trillion as shown in the US Debt clock link. Just in the year 2020, US debt rose almost $4.5 Trillion dollars, and is now at 98% of GDP. Economists estimate that US Debt will rise to a total of over $30 Trillion and rise above 100% of GDP due to the amount of government stimulus from new administration policy.
What’s your take on the US Debt?
Sources:
https://www.ft.com/content/27eb9042-9df4-4f01-84ba-df6cba0e72f3 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/01-11-21_FinancialTimes-Investors_Look_Past_the_Storming_of_US_Capitol-Footnote_1.pdf)
https://www.bls.gov/news.release/empsit.nr0.htm
https://www.barrons.com/articles/the-stock-market-had-a-fantastic-week-now-it-needs-to-drop-51610157835?refsec=the-trader (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/01-11-21_Barrons-The_Stock_Market_had_a_Fantastic_Week-Now_It_Needs_to_Drop-Footnote_6.pdf)
https://www.ft.com/content/da72d8b4-de16-49c6-a13e-8301097b0bb3 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/01-11-21_FinancialTimes-Global_Stocks_Notch_Biggest_Weekly_Gains_Since_November-Footnote_7.pdf)
https://www.investopedia.com/terms/m/melt-up.asp
https://www.economist.com/finance-and-economics/2021/01/09/why-the-crazy-upward-march-in-stock-prices-might-just-continue (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/01-11-21_TheEconomist-Why_the_Crazy_Upward_March_in_Stock_Prices_Might_Just_Continue-Footnote_9.pdf)
https://www.marketwatch.com/story/sky-high-stock-prices-make-sense-robert-shiller-says-11606838599
