Good Friday AM,

Stocks showing a little weakness and bonds are basically flat. There is a lot of buzz right now about how the equity markets and primarily the S&P will react towards the end of the trading session as Tesla moves into the S&P 500. Historically, over the following 12 months, this is not helpful to the company that is moving into the S&P  but is helpful to companies who leave. I would though expect volatility towards the end of the day as fund managers (and many retail investors) will balance their portfolios to include Tesla.

We are still talking about stimulus and if it doesn’t get done today (or another funding extension passed), the government is  going into shutdown mode (sounds more ominous than it is). Everyone is hopeful a stimulus bill is passes today. The devil is as always, in the details. The current sticking points are Democrat requests for federal funds to match 100% of FEMA payouts for pandemic-related disasters and Republican demands to end the Federal Reserve’s emergency lending program. The number keeps changing and last reports I have seen put it at roughly 900b.

Regardless of Stimulus, the U.S. economy appears headed for a winter slowdown. Unemployment claims have risen for the second straight week to 885,000, hitting a three-month high, indicating fresh challenges for the labor market as Covid-19 deaths and hospitalizations continue to rise and some states tighten restrictions. Beyond the jobless numbers, retail sales were down 1.1% in November, the pace of growth in consumer spending has slowed since the summer and many businesses continue to operate far below capacity. The arrival of winter has also led to increased layoffs in industries seen as vulnerable to cold weather such as food services, retail and construction. Economists surveyed by the Journal believe vaccine distribution will help the economy rebound but not until the second quarter of next year.

And leaving you with this statistic… 0.2% — That is the percentage of flu tests, out of more than 22,000 samples, that came back positive during a recent week of testing. During the same period last year, 11% of more than 41,000 samples came back positive, suggesting that Covid-19 precautions like mask wearing and social distancing have blunted the impact of the flu and other seasonal viruses

Please remain safe and healthy, enjoy the weekend and make today great!