E Market Briefing For Monday, Dec. 21

S&P re-balancing  was the highlight of Friday's Quarterly Expiration, with the focus more on the adding of Tesla chatted about (though irrelevant on a daily basis to shareholders; but potentially a volatility contributor next year); rather than a focus on horrid expansion of Covid-19.

Severe Pfizer vaccine reactions are reported in several U.S. states. What did prompt an unpopular move by Prime Minister Johnson in the UK is not only a surge of Covid; but it's a mutation with as much as 70% greater risk of spread; which ultimately begs the question about existing vaccine efficacy (we'll stay optimistic that the protein target attacked on the virus by current vaccines is uniform on the mutated strains; but this is possibly yet to be established).

Manipulation . . . might be commencing; in an odd way. You've had massive run-ups in many stocks; lots of bad news relatively ignored by markets (the cyber-attack being the outlier, while the dismissal of post-election autopsies is debatable as to whether unsettling repercussions are still forthcoming); and of course Covid and the lack of an effective 'relief' bill, at least as of press-time (but forthcoming it must be assumed).

While I think the Fed sees the behavior and is making use of its toolbox early in this situation; the allowing Banks to resume 'buybacks' might signal more in terms of 'stabilization' efforts, than merely fortifying the economy (or market).

Big-caps remain extended, as bears continue 'fighting the Fed'; even as for sure, a post-Expiration pause would be normal; but Tesla might mix that up. History is replete with those who tried to make the market go their way at a time when more powerful forces argued otherwise. Our 'Inger Bottom' back in March was such a time; that's when the Fed indicated they'd do whatever it takes (within their power). The next day the 'max fear' crowd exhorted selling; and we became confident the time for go up was at-hand.

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