Monday, December 28, 2020
Solid holiday shopping season. Holiday sales grew 3%, beating forecasts for a 2.4% increase according to MasterCard’s SpendingPulse. Online sales rose 49% year over year. These results were impressive for a recessionary period—the comparable figure dropped 3.5% in 2008—and highlight the resiliency of the US consumer and benefits of stimulus.
Stocks open higher after shortened holiday week. Stocks opened higher after the long weekend and after President Trump signed the coronavirus relief bill, averting a government shutdown.
- European stocks are higher in midday trading while the United Kingdom (UK) is closed for Boxing Day
- UK and EU leaders confirm post-Brexit trade deal
- Asian markets are mostly higher with China the laggard
Week ahead. The economic calendar for the holiday-shortened week includes:
- Tuesday: S&P/Case-Schiller Home Price Index (Oct.)
- Wednesday: Wholesale Inventories (Nov.), Chicago Purchasing Managers’ Index (PMI, Dec.), and Pending Home Sales (Nov.)
- Thursday: Initial Unemployment Claims
January 1, 2021: LPL Financial and the stock and bond markets will be closed January 1.
Technical update. Stocks consolidated in a tight range just below all-time highs last week. The S&P 500 Index has tactical support at 3630, and will look to eclipse record highs at 3725 this week.
COVID-19 news. New COVID-19 cases over the weekend were mostly lower, although fluctuations in testing due to the holiday might skew the data.
- Near-term concern will be on monitoring for a post-holiday surge
- Total confirmed infections in the United States surpassed 19 million on Sunday (source: COVID Tracking Project)
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