Your Tuesday Blip 12/8/20

Your Tuesday Blip 12/8/20

Stocks finished the day up 104 at 30,173 on mixed trading volume. Vaccine news and continued stimulus discussions are holding markets up yet with not enough buying pressure to really break the current resistance level.
With the advent and popularity of free online trading platforms millennial retail investors are having an impact on markets not seen since the heady days of the Dot.com bubble back in 1999 and 2000. Citadel Securities, which provides trade execution services estimates that retail investors or the so called “Retail Bros” account for as much at 25% of trading volume making them a significant force in market action. These retail investors prefer individual stocks, are optimistic and growth oriented and they focus on ESG investing (Environmentally Sustainable Growth) with little regard for metrics like PE ratios. Tesla along with renewable energy stocks and ETFs that focus on innovation are examples of stocks that Retail Bros like to own even if the traditional valuation measures are higher than a Falcon 9. John and I are watching these trends since history tells us that while they are profitable when positive they can be devastating when the tide turns.
After a surprise profit last quarter GE said it was putting $4 billion towards paying down liabilities in its own pension fund and in GE Capital. One of the biggest headaches at GE is the $23 billion pension deficit and new CEO Larry Culp has made it a priority to whittle that down. Going forward the company is projecting positive cash flow which will be used to further reduce debt and make the pension plan whole.