Your Monday Blip 1/25/21

Your Monday Blip 1/25/21

Stocks played a mixed game today with the Dow down while the NASDAQ moved higher. At the close the Dow was lower by 36 points to 30,960. Trading volume was higher across the board indicating that institutional buyers were involved. Banks and energy stocks were lower while tech was generally higher with Apple surging to an all-time high.
Earnings reporting season kicks into high gear as 20% of the S&P 500 companies will report numbers this week. The excitement is palpable especially for big tech stocks like Apple, Tesla and Amazon. The earnings reports will reveal how companies have fared and adapted as covid cases rose during the 4th quarter of 2020. Bullish sentiment is running high and call option buying has surged. The bullish sentiment is in part due to prior earnings reports that have beaten guru estimates by historic margins.
Prices for steel, lumber, aluminum and copper are up in response to higher order volumes which in turn are coming from a quicker than expected recovery in US manufacturing. The V shaped recovery in manufacturing is leading to clogged supply chains and overtime work for employees in some cases. An order that took a couple of weeks now takes 6 to 8 weeks. Brad Serlin, president of Untied Scrap Metal in Illinois noted that prime scrap steel has risen 60% since November while Aluminum is up 40%. One issue however is that manufacturers face thin margins dur to the rising raw material costs and labor constraints thus making it hard to fill orders and benefit from the sudden economic snap back.