Dear Valued Clients and Friends –
It was quite an odd day in the market and there are plenty of interesting things going on in the world today, including some of the most noteworthy COVID information I have shared to date. So jump on in to the DC Today and reach out if any questions or comments!
- The Dow futures were pointing down ~50 points or so last night, and then were up ~140 points or so at 4am this morning. The market opened right around +100 and stayed flat from there for a couple hours before beginning a choppy descent down that picked up steam in the final 45 minutes of trading. The Dow closed down 345 points, with the S&P 500 down 1.16%, and the Nasdaq down 0.82%.
*FactSet, DJIA, Nov. 18, 2020
- Coming into today’s trading session, 91% of the small-cap universe is trading above its 50-day moving average. Internal momentum is surging in the small-cap space.
Top New Stories
- Pfizer released updated data on their stage 3 trials, indicating 95% efficacy (had been 91% or so in the prior estimate). This 95% efficacy a full 28 days after the first dose is really above and beyond anyone’s expectations. Interestingly, the effectiveness was maintained (94%) even for elderly people in the trial. The incredibly catchy name for the treatment is BNT162b2. The submission for emergency use authorization from the FDA is just days away. 50 million doses are expected within the next five weeks and 1.3 billion doses in 2021.
- New York City announced their public schools were closing again, despite a positivity rate of just 3%, and a complete absence of school-oriented transmissions and severities.
- A really profound discovery yesterday: Hospitalization data requirements were updated October 6 to require inclusion of “observation beds” – wherein someone in and out for observation (same day) is added to the hospitalization log (prior to that, inpatient tracking only included those who were, well, an inpatient for COVID). These new rules (actual government document here) came with severe financial penalties where reporting is deemed inadequate.
- Offered without further comment …
- I previously reported that Joe Biden had named Ron Klain his Chief-of-Staff, long-time insider to Biden world. Jen O’Malley Dillon was named deputy chief of staff yesterday (his campaign manager), and various senior members of the campaign became senior advisors and counselors to the President-elect. Cabinet nominations are expected to begin in just a couple of days.
- Speaker Pelosi has secured the votes for a renewed speakership, but indicated this will be her last term pursuing such.
Housing & Mortgage
- New purchase mortgage applications rose +3.5% week-over-week after declines six of the last seven weeks. New purchase apps are up 26% year-over-year. This plateau of new apps largely comes as inventories are at record low levels, and affordability is reaching near low levels.
- Housing Starts came in at 1.53 million (more than the 1.46 million expected), and with single family starts rising +6.4% month-over-month.
- The GOP Senate was two votes short of confirming Judy Shelton to the Federal Reserve Board of Governors, with two Republican Senators having to quarantine for COVID exposure. So the long and short of it is that her nomination is hanging on a thread, but it is not necessarily a done deal as if there were a re-vote (which McConnell kept the ability to do so), and these two Senators were back, it would apparently pass.
Oil and Energy
- WTI Crude closed at $41.81/barrel, up a tad, despite a 800,000 build in crude inventories reported by EIA (which was less than the 1.95mm estimate from analysts)
- OPEC+ appears close to an agreement to extend the production cut level down to 7.7mm BPD through March 2021
- More COVID news and announcements will come …
- … and more Biden nominations and intentions will come as well
- And weekly jobless claims come tomorrow.
Be well, be safe, be free. I miss saying that.
David L. Bahnsen
Chief Investment Officer, Managing Partner
The Bahnsen Group
The DC Today features research from S&P, Baird, Barclays, Goldman Sachs, and the IRN research platform of FactSet. those of HighTower Advisors, LLC or any of its affiliates.