Home 2021 Commentary: Paul Ebeling on Wall Street

Commentary: Paul Ebeling on Wall Street

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The Bulls are still running, despite the chaos” — Paul Ebeling

Last Week’s Action

Stocks ran higher, and the NAS Comp and PHLX Semiconductor Sector (SOX) led the run North

The financial market is ignoring any and all bad news and is focused on more stimulus in Y 2021.

With some caveats, as with IEA. we will play the good moves.

There was $900-B in stimulus in late Y 2020, and now there is talk of another $750-B in early Y 2021. Some, expect an aid/relief/stimulus bill to pass in February and boost the already strong economy. 

The indexes’ tally, and in just 1 wk.

  • Russell 2000 +5.9% YTD
  • DJIA +1.3% YTD
  • NAS Comp +1.2% YTD
  • S&P 500 +1.2% YTD

The economic side: Yes, jobless claims were greater than expected, but they are not driving higher. Institute of Supply Management (ISM) services topped expectations.

Technical Analysis

NAS Comp held during the wk, then broke to new highs. 

S&P 500, the same here, a strong new break to new highs.

This Weeks Outlook

Investors expect company earnings and economic data to move stock prices up again this year.

For months, earnings and economic data seem to have taken a backseat to the national political landscape and the worldwide China Virus chaos.

But the benchmark stock indexes have risen to record highs even as Citigroup’s US Economic Surprise Index has slipped to its lowest marks in 6 months.

US stocks overcame some profit taking last Monday to close at a record highs Friday.

This wk investors will get a look of how the economy is performing with the release of data on inflation, retail sales and consumer sentiment.

Money center banks JP Morgan, Citigroup and Wells Fargo are set to release Q-4 results on 15 January. They are among the 1st S&P 500 companies to post their results for the last frame of Y 2020.

Overall, our outlook is that S&P 500 company earnings will increase about 23% in Y 2021 compared to Y 2020.

Prudence tells us to be very discerning into mid-year and prepare for a correction of up to 18 to 22%.

Have a healthy week, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.