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End of Day Briefing - Recap of Wednesday Jan. 13, 2021

Stocks close mostly higher as U.S. tries to speed up vaccination deployment

The S&P had a second straight winning day as the U.S. government tweaks its strategy for rolling out COVID-19 vaccines. The federal government is now recommending that states starts immunizing all residents 65 and older in an easing of prior guidelines in order to speed up the deployment of the vaccines that have already been approved. Meanwhile, the House plans to vote on the impeachment of President Donald Trump for the second time since he has been in office. Wall Street has been choppy with modest moves so far this week after the three major indexes closed at record high levels last Friday.

ECONOMIC EVENTS: In the U.S., the headline consumer price index rose 0.4% in December, with the core CPI rate edging up a restrained 0.1%.

In Federal Reserve news, the Fed said in its latest Beige Book report that economic activity has "increased modestly" since its last report, although conditions "remained varied." The Fed added that the majority of Districts reported a rise in employment, though the pace was slow.

TOP NEWS: Shares of Intel ($INTC) gained 7% after the company announced Pat Gelsinger, formerly of both VMware ($VMW) and Intel itself, will take over as CEO. Meanwhile, VMware shares fell almost 7% on what several analysts have called bad news for it and good news for the chipmaking giant.

Target ($TGT) announced that comparable sales in the combined November/December period grew 17.2%, driven by a 4.3% increase in traffic and a 12.3% increase in average ticket. Target Chairman and CEO Brian Cornell said, "The momentum in our business continued in the holiday season with notable market share gains across our entire product portfolio."

Affirm ($AFRM) soared in its debut on the public market. Shares of the financial technology company opened at $90.90 after its IPO priced at $49 per share.

In COVID-19 news, Johnson & Johnson ($JNJ) was in focus after Reuters reported that the company's chief science officer Dr. Paul Stoffels said the company intends to have clear data on how effective its single-shot COVID-19 vaccine is by the end of this month or early February. J&J expects it may have a U.S. approval for the vaccine by March, according to Reuters.

MAJOR MOVERS: Among the noteworthy gainers was WiMi Hologram Cloud ($WIMI), which jumped over 14% after announcing it obtained a patent for a 3D holographic pulse laser device. Also higher was Canoo ($GOEV), which gained 13.6% after The Verge reported that Apple ($AAPL) held talks with the electric vehicle startup during the first half of 2020.

Among the notable losers was Marathon Petroleum ($MARA), which declined 12% after it announced a $250M registered direct offering. Also lower was Party City ($PRTY), which fell just under 8% after its preliminary revenue missed expectations.

Reviewing today's economic data:

  • Total CPI increased 0.4% m/m in December ( consensus 0.4%) while core CPI increased 0.1% m/m ( consensus 0.1%). The uptick in total CPI was driven largely by an 8.4% increase in the gasoline index, which accounted for more than 60% of the overall increase.
    • The key takeaway from the report is that it won't trigger inflation alarm bells in an aggregate sense. Total CPI is up just 1.4% yr/yr, versus 1.2% in November, while core CPI held steady at 1.2% yr/yr for the third straight month. The latter views notwithstanding, inflation worries -- both real and imagined -- promise to be a pressing issue throughout the year.
  • The December Treasury Budget showed a $143.6 bln deficit, versus a $13.3 bln deficit in the same period a year ago. The budget data is not seasonally adjusted, so the December deficit can't be compared to the November deficit of -$145.3 bln.
    • Total receipts of $346.1 bln were $10.3 bln more than the same period last year. Individual income taxes were the largest source of receipts at $144 bln.
  • The weekly MBA Mortgage Index jumped 16.7% as the Refinance Index spiked 20.1% while the Purchase Index rose 8.0%.

  • Russell 2000 +6.9% YTD
  • Nasdaq Composite +1.9% YTD
  • Dow Jones Industrial Average +1.5% YTD
  • S&P 500 +1.4% YTD

Market Snapshot
SP 5003809.84+8.65(0.23%)
10-yr Note +11/321.088
NYSEAdv 1661 Dec 1477 Vol 944.7 mln
NasdaqAdv 1698 Dec 2036 Vol 6.96 bln

Industry Watch
Strong: Real Estate, Utilities, Technology, Consumer Staples, Consumer Discretionary, Health Care
Weak: Energy, Financials, Industrials, Materials

Moving the Market

Intel (INTC) spikes after CEO announces his departure

House of Representatives expected to vote on impeaching President Trump today

December CPI matches expectations

Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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