Short-Termism Vs. Optimism: Weekly Nifty 9 Must Knows

Research Report Insight #3

Equal-weight leading informs us that this is a broad equity market move, not a concentrated equity market rally over the last 9 months.

The market could never have achieved the breadth strength it had over the last few months without getting most stocks on-board with the market and economic recovery trend. 

Research Report Insight #4

This was the weakest NFIB survey since May, but again, it looks back at the December period when Covid19 started to peak and regional economic restrictions increased. It also recognizes a period “without” the benefit of the recently passed fiscal relief package that granted tax payers $600 checks and $300 in additional weekly unemployment insurance benefits. These are not points to dismiss, but rather to recognize as potentially boosting economic output from the month of January onward. Bank of America believes my sentiment to be valid as they recently adjusted their Q1 GDP model.

As offered, a goodly amount of the economic outlook is predicated upon fiscal relief implementation as well as getting the pandemic under control. We’re starting to see the benefits of regional economic restrictions and possibly the early vaccination protocols in the daily/weekly virus data.

U.S. new Covid19 cases were down 10%+ WoW [on day published] for a 2nd day running. It was also the first drop in deaths WoW for a non-holiday period since 11/12/2020. Hospitalizations were also down 10% WoW. Positive test rates have been falling even as test counts continue to rise 20% WoW.

Research Report Insight #5

Fast-forward to the week that was and with big money center banks starting to report Q4 results and we’ve already seen a significant upward revision by FactSet.

  • For Q4 2020, the estimated earnings decline for the S&P 500 is -6.8%, up from the previous forecast for a decline of -8.8%.

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