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Market Commentary: Understanding ‘Short Squeezes’ and Last Week’s Intense Market Demands

Market Commentary

Market Commentary: Understanding ‘Short Squeezes’ and Last Week’s Intense Market Demands

The prices of a small set of heavily shorted stocks spiked last week as multiple factors conspired to create an intense demand for shares of some companies. The extreme move in prices has created a large gap between the current price and the price targets of even the most optimistic investors.

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Market Commentary: Chinese GDP Grew in 2020; U.S. Corporations Outperform Q4 Expectations.

Market Commentary

Market Commentary: Chinese GDP Grew in 2020; U.S. Corporations Outperform Q4 Expectations.

Chinese GDP grew 2.3% in 2020, making it the only major economy to grow last year. In the fourth quarter, the Chinese economy grew 6.5% as China continued to gain ground on the U.S. economy. The growth was led by strong performance in industrial production, which rose 7.3% in December, compared to a year earlier.

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Market Commentary: Biden Proposes New Stimulus Package as Signs Point to Economic Slowdown

Market Commentary

Market Commentary: Biden Proposes New Stimulus Package as Signs Point to Economic Slowdown

The signs of an economic slowdown continue. Initial jobless claims, which are released weekly, spiked to 965,000 last week. Claims increased by 181,000 and marked the highest weekly total since mid-August. Continuing claims increased 199,000, indicating those losing work are not finding new employment right away. Based on other data points, many of those filing for unemployment expect to be rehired when newly imposed restrictions are reduced.

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Market Commentary: Markets Start the New Year Strong Despite the Chaos in Washington

Market Commentary

Market Commentary: Markets Start the New Year Strong Despite the Chaos in Washington

The vivid pictures and appalling actions in Washington, D.C., Wednesday captured the attention of the globe, but not the interest of markets. The Democratic sweep in the Georgia Senate races didn’t attract a lot of interest from investors either. Neither were markets fazed by the first loss of jobs in a monthly employment report since the recovery began.

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Market Commentary: S&P 500 Finishes the Year at a Record High, Unemployment Numbers Decrease Slowly

Market Commentary

Market Commentary: S&P 500 Finishes the Year at a Record High, Unemployment Numbers Decrease Slowly

The S&P 500 wrapped up a surprising year with another strong week. The index of large-cap stocks, including dividends, climbed 1.5% and finished 18.4% higher for the year. Figure 1 shows the performance of the S&P 500, ex-dividends, in 2020 and just how far stocks have roared back from their lows.

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Market Commentary: Trump Signs New Stimulus Package as Vaccine Distribution Continues

Market Commentary

Market Commentary: Trump Signs New Stimulus Package as Vaccine Distribution Continues

The new stimulus package approved by the House and Senate was signed by President Trump Sunday night. The president had proposed upping the aid to individuals to $2,000 after the bipartisan agreement had been reached. Garnering support for that proposal would likely have proven difficult and economic urgency made signing the bill the logical choice. The need for additional support was evidenced by a 1.2% decline in disposable income (Figure 1).

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Market Commentary: New Support Package to Provide Assistance to Individuals, Businesses and More

Market Commentary

Market Commentary: New Support Package to Provide Assistance to Individuals, Businesses and More

The economic slowdown continues. Initial jobless claims climbed 885,000 last week. In the face of additional restrictions and heightened health risks, consumers have scaled back activity. Retail and food service sales dipped 1.1% last month (Figure 1).

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Market Commentary: First Vaccines Roll Out as Unemployment Claims Remain High

Market Commentary

Market Commentary: First Vaccines Roll Out as Unemployment Claims Remain High

Initial jobless claims reached an 11-week high based on data reported last week. More than 850,000 workers filed initial unemployment claims (Figure 1). While processing delays around the Thanksgiving holiday affected the data, even after adjusting for the break it appears the economic lull continues.

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Market Commentary: S&P 500 Gains Nearly 11% Last Month After Promising Vaccine News

Market Commentary

Market Commentary: S&P 500 Gains Nearly 11% Last Month After Promising Vaccine News

November turned out to be a month full of news. A surge of COVID-19 cases, the presidential election, vaccine announcements, and slowing economic growth all moved markets. The November employment report provided additional evidence economic growth is decelerating. The economy generated 245,000 new jobs, missing expectations of 463,000 (Figure 1). Unemployment inched lower to 6.7% supported by the slow job growth and more people leaving the labor force.

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Market Commentary: Dow and S&P Set Records, but Unemployment Still Rising

Market Commentary

Market Commentary: Dow and S&P Set Records, but Unemployment Still Rising

The economy seems poised to decelerate in coming weeks as data showed slowing economic improvement or outright reversals of the recovery. Income data was mixed. Disposable income fell 0.8% in October as government programs expired. Gains in employment pushed employee compensation up 0.7% as more people returned to work.

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