Dow shot up 560, advancers over decliners about 3-1 & NAZ soared 150. The MLP index edged higher in the 145s & the REIT index gained 4+ to the 378s. Junk bond funds rose in price & Treasuries were sold while stocks were being purchased. Oil was off a tad in the 52s & gold recovered 12 to 1860.
AMJ (Alerian MLP index tracking fund)
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The number of Americans who filed for unemployment benefits for the first time rose less than expected last week as the Biden administration took the reins of the Covid vaccine rollout & employers hoped for additional financial support from Congress. Jobless claims totaled 847K last week, the Labor Dept reported. The forecast called for first-time claims to total 875K. The previous week's level was revised up 900K to 914K. Continuing claims showed a decrease, falling by 203K to 4.77M, a new pandemic-era low. 5.05M continuing claims were expected. The latest claims report showed that the total of Americans receiving unemployment benefits actually rose, jumping to 18.3M, an increase of 2.3M from the prior week. That increase is related to the latest fiscal package passed in Dec, which included extended benefits for displaced workers. The bounce in consumer spending that had revived job & economic growth thru the summer & fall has shown signs of fatigue, as household spending declined for the first time in 7 months in Nov. That slowdown, thought to be a function of colder weather & record-setting Covid cases, has led to a string of higher-than-expected jobless claims & stagnant unemployment figures. Initial claims hit 926K in the latest week, the highest reading since Aug.
Jobless claims rise less than expected at 847,000 first-time applicants
The US economic recovery from the coronavirus shutdown slowed markedly in the final 3 months of the year, as the nation failed to recoup all of its losses from the COVID-induced recession. GDP, the broadest measure of goods & services produced across the economy, grew by 4% on an annualized basis in the 3-month period Oct-Dec, the Commerce Dept said in its first reading of the data. The forecast was expected to show the economy had expanded by 4%. The economy grew at an annual revised rate of 33.4% in the previous qtr, a record-shattering pace as businesses reopened from the unprecedented lockdown. But the headline figure often obscures the whole picture because the Commerce Dept calculates the GDP on a qtr-over-qtr basis as if that level of growth were sustained for a full year; in times of huge swings up or down, it can exaggerate both the decline in growth & the subsequent rebound. Looking at the quarterly data, GDP grew 1% from the 3rd to the 4th qtr, compared with an increase of 7.5% between the 2nd & 3rd qtrs, marking a substantial slowdown as a resurgent virus forced a fresh wave of business closures & lockdown measures. The growth in the latter ½ of the year was not enough to offset the sharp downturn from the first few months, when the economy came to a near standstill to slow the spread of the virus, which has infected more than 25M Americans & killed over 429K. The economy remains 2.5% smaller than at the end of 2019. Measuring 2020 output overall against the previous year, GDP fell 3.5% in 2020, the worst on record.
US economy grows 4% in fourth quarter amid resurgent coronavirus
McDonald's (MCD), a Dow stock & Dividend Aristocrat, missed estimates for quarterly profit & revenue as a 2nd round of lockdowns in parts of Europe hurt its business & countered the hamburger chain' s sales growth in the US market. MCD said the restrictions were impacting markets abroad,
particularly those with fewer drive-thru locations & that it was
expecting some of them to remain as long as the pandemic's vice-like
grip on the world continued. Q4 comparable sales for the restaurant chain’s
intl operated markets segment fell 7.4% in Q4,
largely due to weakness in France, Germany, Italy & Spain, where the
health crisis has been more intense. The forecast was for a drop of 5% for the segment. Comparable sales in the US, however, rose 5.5%, an
improvement over the prior qtr & better than the estimate of 5.1%
rise, as the company leaned on its drive-thrus & celebrity
collaboration, including the launch of the crowd-favorite Travis Scott
Meal, to drive its business. Overall, global comparable sales fell 1.3% in the qtr, better than the anticipated 1.4% decline. Total revenue fell 2.1% to $5.31B, missing the estimate of $5.37B. Excluding one-time items, EPS was $1.70, missing the estimate by 8¢. The stock rose 55¢.
If you would like to learn more about MCD, click on this link:
club.ino.com/trend/analysis/stock/MCD?a_aid=CD3289&a_bid=6ae5b6f7
McDonald's earnings miss estimates as Europe lockdowns squash sales
Buyers returned after yesterday's big selloff. Speculation is running at a fever pitch which may be a major influence on trading. A few speculative stocks have had explosive runs in recent days, much of which is due to an unusually high level of shorting the stocks. Speculators are betting they can buy back shares at lower prices. However this is extremely dangerous, comparable to playing with fire. This fever may have affected trading in ordinary stocks yesterday & today.
Dow Jones Industrials
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