The Federal Open Market Committee (FOMC) had their final meeting and decisions of this year. The federal funds rate was kept in the range of 0.00% and 0.25%. There was a commitment to purchase U. S. Treasuries and mortgage-backed securities of at least $80bn and $40bn respectively, per month. These purchases will continue to happen until progress has been made on inflation and employment. The Fed indicates that the economy is improving and will continue to do so in to 2022. The FOMC indicates that stocks will benefit from a steeper yield curve and inflation outlook.
Congress also passed a $900bn stimulus package Sunday. This has been priced into the market. Thought we got some Stimulas, the market bought the rumor and sold that facts.
The market is reacting to the virus spike and the threat and reality of shutting down cities.
Important economic reports due this week. The bigger reports are out at the beginning of the year.
- Personal income/spending
- PCE inflation
- Durable goods orders
Personal Note
For the next two weeks, I will not be writing the week ahead. I am looking forward to spending time with the family and the holidays. Remember to be safe and have a great start to the new year. Next TWA will be Jan 4, 2021.
Happy Monday. Good Luck out there this week.
Global Spotlight
A vaccine decision in Europe. The European Medicines Agencies will make a decision on the BioNTech/Pfizer vaccine on Dec. 21; approval would open the door for EU member states to start vaccinating their populations shortly thereafter.
A currency devaluation in Iraq. Iraq’s Central Bank is considering devaluing the Iraqi dinar by roughly 20 percent as early as Dec. 20 as Baghdad finalizes its 2021 budget. Devaluing the dinar would make it easier for the government to pay local currency public sector salaries, which make up about a quarter of Iraqi gross domestic product and have been increasingly overdue as the country’s budget deficit grows.
A budget cliffhanger in Israel. Israeli political parties have until Dec. 23 to pass a budget or plunge back into national elections, but few signs of compromise exist that might save the unity government.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
Here is Jill Mislinski’s chart of the market week.
Once again, Juan Luque provides us with some words of wisdom from the Incline trading desk:
The S&P 500 Index reached new highs this week on Thursday gaining 1.25% for the week. The Covid-19 vaccine and anticipation of possible additional stimulus keeps pushing stocks higher. Most sectors were up except for Communication Services (-0.46%) and Energy (-4.26%). Communication Services remains in the leading quadrant along with Financials. The Consumer Staples and Real Estate sectors have reversed and dropped into the lagging quadrant shown in red font. Information Technology was the leader this week with a 3.2% gain and changed its direction upwards gaining momentum. Energy shows a significant move and has reversed its long-term trend as it moves along the improving quadrant. Finally, the utilities sector has reversed and is moving directly into the lagging quadrant. Investors continue seeing with optimism the outcome of stimulus talks and the efficacy of the vaccine.
Of Note:
The Visual Capitalist has a timely look at vaccine purchases around the world.
If you find this post helpful, please pass along to the investment community. If you would like to see any additional information, drop us a line and let us know.
