US stocks will start the new year on a positive note, after ending a volatile 2020 at a new high.
Investors again seem to be shaking off the deteriorating COVID-19 picture, instead focusing on the introduction of vaccines around the world. Hospital admissions in the US hit a record 125,544 on Sunday, according to the COVID-19 tracking project, while the UK has now registered 50,000 new cases over six consecutive days, with tighter restrictions to be announced.
However, the UK started rolling out the vaccine from pharmaceutical company AstraZeneca and the University of Oxford on Monday, boosting sentiment. The FTSE 100 UKX,
led the way, up 2.5% driven by higher metal prices GC00,
HG00,
SI00,
helped the mining sector.
After rallying at the end of 2020, with record highs for the Dow and S&P 500, the three major US benchmark indices are expected to make gains on the first day of trading of the new year.
In our call of the day, LPL Financial chief market strategist Ryan Detrick said the strong year-end rally in 2020 could have ‘bulls smiling’ in 2021.
The S&P 500 SPX,
more than 14% in November and December, ending a tumultuous year at a new high of 3,756.07 – an increase of 16.3% in 2020. Detrick said a gain of 10% or more in the last two months of the year led to a higher S&P 500 the following year every time since World War II. “In fact, January was higher every time, so maybe this strong rally is an indication of higher prices in [2021]. ”
On the previous five times, the index has risen more than 10% in November and December – 1954, 1962, 1970, 1985 and 1998 – the S&P 500 has risen, on average, more than 18% the following year. The index also climbed in all five of January, rising an average of 3%.
The chart below shows what a typical year looks like after rallying 10% or more November / December. “Again, strong returns have historically been the playbook,” added Detrick.
Source: LPL Research, FactSet
The markets
US Equity Futures YM00,
ES00,
NQ00,
Focused higher early Monday, with the Dow Jones Industrial Average DJIA,
set for a win of 150 points at the open. European equities started the year in the forefront, buoyed by the rollout of vaccines across the continent. Asian markets also rallied to start the new year amid global optimism. The US dollar index DXY,
fell 0.3% to 89.51 – the lowest level since April 2018.
The buzz
Democratic lawmakers on Sunday called for swift and serious action against President Donald Trump after he pressured the Georgian Republican secretary of state through a leaked audio tape to “ find ” more votes to reverse his election loss in the state.
The second election for two United States Senate seats in Georgia will take place on Tuesday, which will decide whether Democrats or Republicans control the Senate.
Industrial conglomerate Teledyne Technologies TDY,
said it has agreed to purchase thermal imaging camera supplier Flir Systems FLIR,
in a cash-and-stock deal worth approximately $ 8 billion.
Shares of British gambling company Entain ENT,
formerly GVC Holdings, rose 26% Monday after rejecting a proposed offer of 1,383 pence per share from MGM Resorts MGM,
that valued the company at £ 8.09 billion ($ 11.06 billion).
Bitcoin BTCUSD,
rose to a record high of $ 34,000 over the weekend, before plunging 11% to $ 29,800 Monday.
A British judge ruled Monday that Julian Assange, the founder and publisher of WikiLeaks, should not be extradited to the US.
Health insurer Centene Corp. CNC,
said Monday it has agreed to release Magellan Health Inc. MGLN to take over,
for $ 95 a share, in a deal with an enterprise value of $ 2.2 billion.
Carl Icahn owns more than half of his stake in Herbalife Nutrition Ltd. HLF sold,
and relinquishes his seats on the board of the nutritional supplement company, stepping back from a long-term investment he fiercely defended against an attack by rival activist investor William Ackman.
Random reads
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