Market gains pared after US capital goes into lockdown

Dow advanced 437 to a new record, advancers over decliners still less than 2-1 & NAZ declined 78.  The MLP index jumped 5+ to the 149s & the REIT index was about even at 361.  Junk bond funds went up in price & Treasuries were heavily sold, taking the yield on the 10 Treasury up to 1.04%.  Oil closed above 50 for the first time since Feb & gold retreated 30 to 1924 following its recent rally (more on both below).

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The European Commission authorized Modern'a (MRNA) coronavirus vaccine for use in the EU, following a green light from the European Medicines Agency earlier in the day.  The Commission, the EU's exec arm, granted a conditional marketing authorization (CMA) to the Covid-19 vaccine.  The move represents the final step in the bloc's authorization process.  Ursula von der Leyen, pres of the European Commission, said that the MRNA vaccine would see the bloc gain a further 160M doses. v  “And more vaccines will come.”  “Europe has secured up to two billion doses of potential COVID-19 vaccines,” she added.   “We’ll have more than enough safe and effective vaccines for protecting all Europeans.”  The authorization of the vaccine, the 2nd one now authorized in the EU, comes as criticism grows about the slow rollout of jabs across the bloc. The deployment of Covid-19 jabs varies across the bloc.  France reported 516 vaccinations in the first week of its rollout, while Germany had carried about 240K vaccinations as of Sun.  The Netherlands has only just started vaccinating people against the coronavirus.  In addition, there are also questions about whether enough vaccines have been purchased by the EU.  Emer Cooke, exec director of the Amsterdam-based EMA, added that MRNA's vaccine “provides us with another tool to overcome the current emergency.”  The stock shot up 7.08 (6%).
If you would like to learn more about MRNA's, click on this link:
club.ino.com/trend/analysis/stock/MRNA?a_aid=CD3289&a_bid=6ae5b6f7

EU gives final approval for Moderna Covid vaccine, paving way for extra doses

Ford's (F) Q4 sales were down 9.8% compared to 2019, trailing the performance of General Motors (GM) & FiatChrysler (FCAU) in the period.  GM posted a 4.8% gain for the last 3 months of the year, while FCAU saw an 8% drop.  GM's full-year sales decline also outperformed Ford 11.8% to 15.6%, with both ahead of FCAU's 17% decline.  Ford cited the elimination of sedans from its lineup & tight supplies of its new F-150 caused by a combination of coronavirus-related factory closures & a transition to an updated model as contributing factors to its results.  The F-Series did mark its 44th consecutive year as the USA's best-selling truck, but its 787K total was down 12.2% from 2019 & the lowest since 201   “Fourth quarter represented an inflection point at Ford in our transition from cars to a much greater focus on iconic trucks, SUVs and electric vehicles to better serve our customers. We began to see our strongest evidence of this in December with retail sales up 5.3 percent with the launch of our new F-150, Bronco Sport and Mustang Mach-E. We are well positioned to see the benefits of our focused efforts throughout 2021,” Ford sales VP Andrew Frick said.  The overall market was down 15% on the year & very mass-market automaker reported US sales declined except for Tesla (TSLA), which doesn't break out US sales but realized a 36% increase in global deliveries. The stock rose 19¢.
If you would like to learn more about Fords's, click on this link:
club.ino.com/trend/analysis/stock/F?a_aid=CD3289&a_bid=6ae5b6f7

Ford's 2020 sales down 15.6 percent, 9.8 percent in Q4

Gold futures settled with a loss of more than 2% as a jump in US bond yields undercut the competitive advantage of owning risk-free Treasuries over bullion.  The 10-year Treasury yield note hit a peak near 1.06%, marking its highest level since Mar.  Higher yields can undercut appetite for safe-haven gold, which doesn't offer a coupon.  The runoff elections for the Senate in Georgia have been closely watched.  Against that backdrop, Feb gold lost $45 (2.3%) to settle at $1908 an ounce, after hitting an intraday high of $1962.  Prices edged up to $1912 in electronic trading later today shortly after the release of minutes from the Federal Reserve's Dec meeting.  The slump for gold comes after it touched a 2-month high yesterday amid the reports on the Georgia political races.  Treasury yields rose overnight after early vote counts suggested that Dems were on track to win both Senate seats & thus control of Congress, an outcome that gives Pres-elect Joe Biden administration more room to roll out more debt to achieve his policy agendas.

Gold prices drop as U.S. 10-year note hits 9-month high around 1%

Oil futures climbed, with US prices settling above $50 a barrel for the first time since last Feb, buoyed by a 4th straight decline in US crude inventories, as well as Saudi Arabia's decision to cut its output by an additional 1M barrels per day starting next month.  Feb West Texas Intermediate crude rose 70¢ (1.4%) to settle at $50.63 a barrel.

U.S. oil futures settle above $50 for the first time in 11 months

The Federal Reserve will do what it can to prevent a taper tantrum when it finally decides to scale back on its bond purchases, minutes from the central bank's most recent meeting showed.  Following a 2-day session Dec 15-16, the policymaking FOMC voted to keep its benchmark short-term interest rate anchored near zero.  Markets, though, were focused on discussion surrounding the Fed's asset purchase program.  The central bank has been buying at least $120B in Treasuries & mortgage-backed securities each month, & at the meeting pledged to keep doing so until it sees “substantial further progress” towards its goals regarding inflation & employment.  Minutes noted unanimous approval around the “outcome-based” approach to the program, though members noted that doesn’t mean the purchases will be tied to specific numeric goals.  Officials agreed that markets would get plenty of notice before the asset purchases were curtailed.  The last time the Fed cut back on its asset purchases, it triggered a “taper tantrum” in the market that officials want to avoid this time.  “Various participants noted the importance of the Committee clearly communicating its assessment of actual and expected progress toward its longer-run goals well in advance of the time when it would be judged substantial enough to warrant a change in the pace of purchases,” the minutes said.  Members further noted that once the “substantial further progress” threshold has been reached, the tapering of purchases would be “gradual” & along the lines of what the Fed did starting in 2013.  During the previous reduction of purchases, the Fed cut how much it was buying each month.  Later, it allowed a capped amount of proceeds from the bonds it was still holding roll off each month while reinvesting the rest.  Also at the meeting, members adjusted their economic estimates for the next several years.  On balance, the committee grew less pessimistic about economic growth than it was in Sep & lowered its projections for the unemployment rate.  Officials noted that the economic data around the time of the meeting was mostly better than expected, but the accelerate Covid-19 spread was posing a challenge & growth overall remained considerably below its pre-pandemic level.

Market will get plenty of notice before Fed cuts bond purchases, minutes say

The US Capitol was put under lockdown as protestors in support of Pres Trump flooded the building while lawmakers were in the process of debating Pres-elect Joe Biden’s election victory.  That took the Dow down 200 from 31K, but buying into the close allowed it to edge higher.  Today's rally was less impressive with a drab advance-decline ratio.  Also NAZ finished in the red on tariff worries.  The outcome of the Georgia races is still settled & political tensions are quite high!!

Dow Jones Industrials