Your Wednesday Blip 1/6/21

Your Wednesday Blip 1/6/21

The markets responded to the Georgia election results with a rotation into value stocks like banks and material companies and out of tech stocks. At the close the Dow was up 437 at 30,829. Trading volume was up and both IBD and BTS continue to show markets in rally mode. The election results were a boost to solar stocks as well as pot stocks while big tech fell on fears of possible tax increases and regulations.
Brian Levitt, global market strategist guru at Invesco surmised that the election results in Georgia will result in greater fiscal spending to support economic recovery which in turn will weaken the US dollar and lend higher performance to value stocks and emerging market equities. In a sign of expected improvement in economic activity, the yield curve has begun to steepen as the 10 year treasury yield has gone over 1% and the gap between the 2 year and 10 year yields has surged to its widest mark since 2017. This is good news for banks which today saw a sizable jump in share prices.
Tesla stock hit an all-time high (I sound like a broken record with this one) after Morgan Stanley guru Adam “the whale” Jonas issued a positive report and upped its price target to $810 per share from $540. The catalyst behind the bullish call was Tesla’s fourth quarter vehicle production and delivery numbers which were much better than expected. Adam said that strong deliveries combined with the company’s $5 billion stock sale bode well for the future. Jonas also noted that Tesla’s business model can unlock recurring mobility and technology revenue faster and more profitably than the competition.
Today I had the privilege of writing a letter of recommendation for a young man who is submitting his application for Eagle Scout in Troop 100. Over the years I have seen this kid grow from a lunkhead into a fine young man and it reminds me of the wonderful blessings that come from the scouting program.