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|Feb 01||CONSTRUCTION SPENDING REPORT|
|Feb 02||HOUSING VACANCIES & HOME OWNERSHIP|
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Key Events That Moved the Market in January 2020
The following is a review of US and world events from the last month. Please be advised that this content is based upon the opinions and research of GFF Brokers and its staff and should not be treated as trade recommendations.
S&P 500 – Daily Chart – Jan 4-22, 2020 (Source: Tradingview)
Monday – January 4
- The broader market sold off as many investors took profits from 2020 winners and shed exposures ahead of Tuesday’s Georgia runoff elections.
- The December flash PMI manufacturing final came in at 57.1, ahead of consensus expectations of 56.5.
- November construction spending showed growth of 0.9%, just shy of the anticipated 1.0% but lower than October’s 1.3% jump.
Tuesday – January 5
- Investors bought Monday’s dip as positive manufacturing data and a surge in commodity prices served as tailwinds for today’s rally.
- December ISM manufacturing data came in strong at 60.7, far above the expected 56.5 consensus.
- Traders await the results of the Georgia runoffs which will determine the direction in which the Senate may turn in light of the incoming Biden administration’s spending propositions.
Wednesday – January 6
- Pro-Trump rioters stormed the capitol building in what would end up a violent confrontation resulting in 5 deaths.
- Markets wavered yet proved resilient as it advanced across the board with the Dow reaching new all-time highs.
- December’s ADP employment report showed a stunning negative surprise, a drop of -123,000 when 130,000 was expected.
- November factory order rose 1.0%, slightly above the expected 0.6%.
Thursday – January 7
- Despite the chaos surrounding the capitol, stocks managed to rally to record highs again.
- Strangely, many investors are looking at the breach at the capitol as an isolated event rather than a symptom of a larger trend.
- Investors also look forward to a new government and to more stimulus.
- Jobless claims for the week ending January 2 came in at 787,000, lower than the expected 803,000.
Friday – January 8
- Despite all of the turmoil this week, the broader market was able to race higher to reach record highs.
- Stocks advanced despite data showing the U.S. economy unexpectedly lost jobs last month.
- The gains put the market benchmark on track to end the first trading week of 2021 on a high note.
Monday – January 11
- Stocks eased back following a blistering first week of the year with some of the more overheated parts of the market coming off the fire.
- Markets rose despite no major economic reports released today.
Tuesday – January 12
- The major averages put on a “flattish” performance today holding steady despite the many cross-currents at play.
- Investors are keeping a close eye on Washington where a Wednesday vote for a second impeachment is about to take place.
- The JOLTS report came in at 6.527 million, under the 6.632 million most economists had expected.
- The Federal Reserve’s Esther George commented that inflation may rise faster than expected once the vaccine rollout picks up steam.
- Most of the sectors in the Fed’s inflation gauge were significantly affected by the pandemic lockdowns.
Wednesday – January 13
- A volatile market performance ending with tepid results took place as investors kept an eye on the House’s vote to impeach President Trump.
- Soon enough, investors’ attention will focus on Biden’s economic plan and the possibility of another stimulus.
- Consumer prices remained relatively flat as a month-over-month 0.4% rise came in at consensus, and year-over-year increase of 1.4% came in slightly higher than the expected figure of 1.3%. Overall, the results with and without food and energy costs matched what economists had anticipated.
Thursday – January 14
- The broader market continued to churn below record highs against the backdrop of political drama and a disappointing jobless claims report.
- Investors are looking for clues as to yet another fiscal relief package.
- Last week, the US lost 965,000 jobs, far greater than the expected 790,000 jobs analysts had estimated.
- President-elect Biden is expected to unveil his pandemic stimulus package later today.
Friday – January 15
- Following what started as a harrowing drop, stocks recovered but remained well below their opening levels after President-elect Joe Biden announced details of a $1.9 trillion stimulus plan and major banks released their quarterly results, kicking off the earnings reporting season.
- Reporting mid-day. the Dow Jones Industrial Average traded 130 points lower, or 0.4%. The S&P 500 dipped 0.5%, along with the Nasdaq Composite.
- Retail sales in December dropped -0.7%, more than the expected decline of -0.1%.
- The December producer price index came in near consensus, rising 0.3% month over month and 0.8% year over year.
- Industrial production for December increased 1.6% since the previous month, topping expectations of a 0.5% rise; output shows a rise of 0.9%, higher than the expected 0.5%; and capacity utilization at 74.5% is slightly above consensus estimates of 73.6%.
- Consumer sentiment came in at 79.2, slightly missing expectations of 80.0–the consensus figure accounting for optimism regarding the vaccine rollouts.
Monday – January 18
- Martin Luther King Jr Day – Markets Closed
Tuesday – January 19
- The broader market recovered after its first down week in more than a month with confidence in vaccine rollouts and economic recovery unshaken as appetite for tech stocks remains unsatisfied.
- Incoming Treasury Secretary Janet Yellen made the case to Congress for a more aggressive fiscal approach toward pandemic recovery.
- No major economic reports today.
Wednesday – January 20
- Stock rose to record highs, crowning an uneventful yet historic inauguration in America, as all four US indexes (including the Russell 2000) got catapulted into unseen territory.
- Mortgage applications for the week ending January 15 are down significantly from the previous week–composite index came in at -1.9% from the prior week’s 16.7%; the purchase index is down to 3.0% from the prior week’s 8.0%; and refinancing is down -5.0% as compared with the prior week’s 20.0%.
- The January housing market index eased back a bit, coming in at 83 when analysts had expected 86.
- The housing market index, produced by the National Association of Home Builders, is based on a survey in which respondents from this organization are asked to rate the general economy and housing market conditions.
Thursday – January 21
- Stocks to a breather, regrouping near their record highs.
- Jobless claims eased up a bit as 900,000 new claims were filed in the week ending January 16, in contrast to expectations of 926,000 new claims.
- The Philadelphia manufacturing index, coming in at 26.5 following a run of exceptional growth, topping economist expectations of 11.0.
- Housing starts and permits for December bumped up a bit, coming in at 1.669 million starts and permits, beating consensus of 1.558 million.
Friday – January 22
- Stocks are lower, posting fractional losses on all three US indexes.
- Reporting mid-day, the Dow dipped 113 points, or 0.36%, after starting the day lower by as much as 267 points. The S&P 500 slipped 0.2%, while the Nasdaq Composite fell just 0.1%, supported by gains in Microsoft and Facebook.
- The tech-heavy benchmark and the S&P 500 ascended to record closing highs yesterday, while the Dow hit an intraday high before closing lower.
- Existing home sales for December were expected to fall to 6.550 million from November’s figure of 6.690 million but instead showed an increase of 6.760 million.