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Yesterday, the first vaccines were administered to people in the UK. Today, the first shipment of Pfizer (PFE) COVID-19 vaccines arrived in Israel, with Prime Minister Benjamin Netanyahu saying that he would be the first person in Israel to receive the coronavirus vaccine as part of a campaign to encourage inoculation.  Markets are reacting well to the inoculation news as well as to positive signs regarding a new US stimulus package before the holidays. Yesterday the S&P 500 closed at 3,702, up 10 points, the Nasdaq Composite closed at 12,583, up 63 points and the Dow Jones Industrial Average closed at 30,174, up 104 points. Currently S&P futures are trading at 3,709, up 10 points, Nasdaq 100 futures are flat at 12,633 and Dow futures are up 85 points, trading at 30,255. The Nikkei 225 closed the day up 1.33% and European bourses are trading up with the DAX ahead by about 1%. Though the FTSE is up by 0.25%, concern surrounding the Brexit negotiations will continue to create a fair amount of volatility.

TalkMarkets contributor Yohay Elam in More Money But No Honey, Lagarde May Lower The Euro If She Wants To takes a look at what's in store for EU inflation, stimulus programs and the euro (FXE) ahead of tomorrow's ECB meeting. 

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Elam notes: "Euro/dollar has changed from a tightly-traded currency pair to a boasting a big breakout, hitting the highest levels seen in 32 months. While this development excites traders, it undermines the ECB’s efforts to reach its sole target of 2% or close to 2% annual inflation per year. A dearer euro pushes prices of imported goods lower and also weakens the currency bloc’s economies by making exports less competitive."

The European Central Bank is expected to take up the subject of additional funding for the EU's PEPP (Pandemic Emergency Purchase Program) at Thursday's meeting, however Elam says not all participants maybe on board given that some may feel it is better to let the vaccine do its thing on the economy as well. However his concluding take is that, "The ECB is set to add more stimulus via an expansion of some €500 billion in its bond-buying scheme but that is already priced in. For the euro to rise, the move would probably need to be larger. EUR/USD has room to fall if Lagarde warns about the exchange rate and especially if she hints at cutting rates."

While energy stocks and oil prices have rebounded recently, Tyler Durden writing in WTI Dips After Biggest Gasoline Build In 8 Months Sparks Demand Fears says continued volatility is to be expected until enough of the population is vaccinated to allow the economy to robustly reopen and allow for a significant drawdown of existing stocks of crude oil, gasoline and other distillates. 

"Oil prices waffled around today with WTI unable to break away from $45.50 with any confidence as the market weighed near-term demand risks from rising virus cases against hopes for more stimulus and a vaccine rollout."

Daniel Laboe writing for Zacks Investment Research in IPO Week For DASH & ABNB updates investors on two of the more awaited IPOs of 2020. 

"The IPO market is back in the public equity limelight this week, with two listings expected to net over $6 billion from newly debuted shares. Analysts are estimating that DoorDash and Airbnb will be valued at $36B and $42B, respectively. This puts each on track for being some of 2020's greatest IPOs."

Laboe also says that folks who want in on IPO action can do so by investing in the  Renaissance IPO ETF (IPO) "which has more than tripled since its pandemic bottom."

The article continues with detailed profiles of both DoorDash and Airbnb, but Laboe says that " I'm taking a 'look but don't touch' approach to both of these enterprises debuts this week. I will wait for the dust to settle before I jump into either of these red-inked enterprises."

If you're looking for a break from reading take a look at this 10 minute video from the Staff at Theo Trade, Market Continues Taking The Escalator Up But Be Prepared For What Happens Next. They cautiously remind us that while, "Stocks continued their end of year drift, notching even more all-time highs as our trending stock candidates joined them. While you're protecting yourself or profiting from the bullish drift that's happening now, be prepared for what happens when the drift higher ends… markets don't tend to drift lower."

Further perusal of the TalkMarkets website this week will find other pundits espousing caution, however there does seem to be current consensus that the COVID-19 vaccines will bring victory over the virus and propel a wider recovery across many market sectors.

To wit, TalkMarkets contributor Manisha Chatterjee in the article 3 “Strong Buy” Infrastructure Stocks Ready To Run In 2021 suggests the following three picks, "With their strong  financials, we think BHP Group Limited (BHP), Nucor Corporation (NUE), and Cemex, S.A.B. de C.V. (CX) are three infrastructure stocks that are well positioned to benefit from the increasing spending in the construction space."

"BHP Group Limited (BHP)

Headquartered in Melbourne, Australia, BHP...operates primarily through four segments — Petroleum, Copper, Iron Ore, and Coal...The stock is ranked #1 out of 33 stocks in the Industrial – Metals industry. BHP shares were trading at $62.93 per share on Tuesday afternoon, up $0.40 (+0.64%). Year-to-date, BHP has gained 20.74%, versus a 16.49% rise in the benchmark S&P 500 index during the same period.

Nucor Corporation (NUE)

NUE is North America’s most diversified steel and steel products company. NEU operates through three segments — steel mills, steel products, and raw materials...Analysts expect NUE’s revenue to increase 1.2% for the quarter ending December, and 3.5% next year. The company’s EPS is expected to increase 100% for the current quarter ending December 2020, and 11.1% next year...NUE has an impressive earnings surprise history, with the company beating consensus EPS estimates in each of the trailing four quarters...NUE has gained 26.4% in the last six months, but it is currently trading 4.7% below its 52-week high of $58.70... in the Steel industry, it’s ranked #3.

Cemex, S.A.B. de C.V. (CX)

Based in Mexico, CX is an operating and holding company engaged primarily in the production, distribution, marketing, and sale of cement, ready-mix concrete, aggregates, clinker, and other construction materials...

CX’s net sales have increased 1.7% year-over-year to $3.4 billion for the third quarter ended September 2020. Gross profit increased 1.6% year-over-year to $1.2 billion...Analysts expect CX’s revenue to increase 1.9% for the quarter ending March 2021, and 5.9% next year. The company’s EPS is expected to increase 120% for the current quarter ending December 2020, 172.7% next year and at a rate of 33.2% per annum in the next five years...On a year-to-date basis, CX has rallied 48.2% to close yesterday’s session at $5.63. During the past six months, CX soared 95.8%."

As always, caveat emptor.

This Thursday evening is the first night of Hanukkah, the Festival of Lights. Rabbi Schneur Zalman of Liadi said “A little bit of light dispels a lot of darkness.” For help in bringing some much needed light and joy I leave you with the Sharon Jones and the Dap-Kings song, "8 Days".

Dap-Kings

Have a good week.