Your Tuesday Blip 1/5/21

Your Tuesday Blip 1/5/21

With all eyes on Georgia the markets traded higher today and at the close the Dow was up 167 at 30,391 on heavy trading volume. Both IBD and BTS indicators remain positive.
The latest IHS Market manufacturing PMI declined from 57.1 to 56.3 meaning that growth rates slowed a bit in December. According to IHS Market however the concern in this latest reading is that covid-19 lockdowns continue to cause supply chain problems which in turn hurt production. The good news is that producers of machinery and equipment are reporting strong demand which suggests that ongoing investment in plant property and equipment continues at a fair pace.
Car sales continue to show strength. Tesla delivered 180k vehicles in the final quarter of 2020. General Motors reported that sales jumped 5% in the last quarter of 2020 and said that this is the best Q4 sales performance since 2007. Toyota also said it saw a 20% spike in sales for the month of December and Ford Motor said its factories were running at 98% capacity to end the year and everyone seems to be waiting for the new Ford Bronco to be released.
Material related stocks continue to rise. US based steel, mining and timber companies are now trading at or near 52 week highs and the trend seems to have legs as demand for cars, houses and services continues to recover. WTI crude oil meanwhile hit $50 per barrel today moving up 5% after Saudi Arabia and Russia agreed to hold production increases in check until March as a spike in covid cases threatened demand. The production cap along with an economic recovery in China and the US are seen boosting prices in the near term.

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