Wednesday, January 20, 2021
Top Story
Inauguration Day in the United States
Joseph R. Biden, Jr. will become the 46th President of the United States today. He is expected to issue sweeping executive orders that focus on the environment, immigration, and the pandemic on his first day in office.
Daily Insights
S&P 500 Index opens modestly higher
- Expectations for aggressive fiscal stimulus buoy sentiment.
- European markets are mixed with the United Kingdom underperforming.
- Asian stocks were mostly higher with Japan Nikkei 225 the lone decliner.
Stocks under President Trump
Stocks did very well under President Donald Trump, with the Dow Jones Industrial Average up 56% for an annualized return of 11.8%, the best under a Republican president since President Calvin Coolidge. 126 new highs were made, the most since President Bill Clinton. We take a closer look at a great four years for investors in today’s LPL Research blog.
Earnings season off to a very strong start relative to expectations
- Only about 5% of S&P 500 companies have reported results, but 96% have beaten estimates.
- Forward 12 months’ estimates impressively have already increased by 0.5% since January 1, 2021.
- Stability of estimates is key to enabling stocks to grow into lofty valuations.
Technical update
US equities moved broadly higher to begin the holiday-shortened week, but the S&P 500 remains in a sideways range below resistance near 3850. The first line of tactical support can be found at 3630.
COVID-19 news
The United States reported 144,000 new COVID-19 cases Tuesday, an 18.9% week-over-week decline. This pulled the 7-day average below 200,000 for the first time since January 1, 2021 (source: COVID Tracking Project).
- The week-over-week change in hospitalizations tallied its ninth straight decline.
- Beijing has imposed a lockdown of 1.7 million people in its Daxing District as an outbreak of COVID-19 escalates.
LPL Research in the Media
LPL Research Chief Market Strategist Ryan Detrick recently spoke about the week in the markets on Bloomberg’s Baystate Business (30:08 mark).
Market Signals Covers It All
This week’s Market Signals podcast covers all the latest events impacting markets and the economy: Q4 earnings, a new stimulus proposal, the Democratic blue wave, and President-elect Joe Biden’s new economic policy plan. Watch Market Signals: More Stimulus, New Policies, and Stellar Earnings Season.
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This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
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All index and market data are from FactSet and MarketWatch.
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