Welcome "Ho-Hum" Week on Wall Street
It's been a relatively calm week on Wall Street, which is welcome considering the excitement of late January. Equity markets are slightly above flat for the week. Here's a snippet of what we're seeing so far.
• Quiet Week on Wall Street. Earnings are progressing and there hasn't been a lot of blockbuster economic releases this week. The S&P 500 is up only 0.30% for the week. Job Openings for December surprised to the upside (6.65 mil vs 6.5 mil expected), meaning companies are still looking to hire. The NFIB Small Business Index declined just slightly from 95.9 in Dec to 95 in Jan. The Consumer Price Index showed just a slight increase from 0.2% in Dec to 0.3% in Jan. Our expectation is for this to change as more states fully re-open. The only other major release this week will be the preliminary Michigan Consumer Sentiment Index. Weekly Jobless Claims were expected to drop again this week to 757k, but they came in higher at 793k. Consumer Sentiment is expected to edge slightly higher to 80.8. Congress is still doing it’s thing on Impeachment 2.0 while the market and Main Street wait on fiscal stimulus of $1.9 trillion. Meanwhile, the Chicago Fed’s National Financial Conditions Index continues to point to stable economic conditions as it as remained at -0.60 (plus or minus 0.02 pts) for the past 11 weeks.
• Virus Numbers Continue to Decline. The 7-day average for Daily Cases is down 59% since the peak on Jan 11th. Hospitalizations from COVID are down 44% since the peak on Jan 6th. The 7-day average for Daily Cases is not rising in any of the 50 states. The Governor of Iowa has lifted COVID restrictions in her state as hospitalizations and cases have plummeted. Johnson & Johnson has filed for FDA emergency use for its COVID vaccine. Unfortunately, the FDA has decided not to decide on the use of the vaccine until its next Advisory Committee meeting on February 26th. The good news is that the J&J vaccine will require only 1 shot and can be stored in a refrigerator, like most other vaccines. This also means that the distribution will be different – typical places of distribution like local pharmacies will be able to administer the shot and take the inefficiencies of the federal & local governments out of the mix. So far, more than 69 million doses of the vaccines have been distributed in the U.S., with 34.7 million shots administered and 11.2 million Americans fully vaccinated.