It was a very bullish month for the US equity market, SPX +351pts (10.7%) to 3621, with the Transports +1343pts (12.1%) to 12450. WTIC +$9.55 (26.7%) to $45.34. Copper +39cents (12.8%) to $3.44. The USD -218bps to DXY 91.86. The US 10yr yield cooled by -4bps to 0.84%.
SPX, monthly
Trans, monthly
WTIC, monthly
Copper, monthly
USD, monthly
US 10yr yield, monthly
Summary
Equities: It was a massively bullish month, with all five of the indexes I regularly highlight, breaking new historic highs. The power of the November candles are highly suggestive that December will at least produce further new hist’ highs to some degree.
Commodities: both WTIC and Copper were powerfully higher in November. Oil looks set for psy’50, whilst copper has open air to psy’ $4.00. Notable exemptions were gold and silver, both of which traded inverse to the ‘everything is going to be great in 2021′ trade.
USD: a net monthly depreciation of -2.3%, breaking a new cycle low of DXY 91.49. Next support are the 88s. Multi-month price structure is a bear flag, which appears to be playing out. Any price action in the 87s would merit alarm bells, and open the door to far low levels.
Bonds/yields: a minor net monthly decline in yields, having cooled back from a multi-month high of 0.98%. Monthly momentum is set to turn positive, which does lean to another push toward psy’ 1.00% in December. The next FOMC of Dec’16th will clearly be important, as ‘yield curve controls’ remain on the menu.
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Looking ahead
Tuesday will see PMI/ISM manu’, construction, and vehicle sales
Earnings: NTAP, MOMO, CRM, BOX, HPE, VEEV
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Final note…
So… eleven months down… with one to go. My thoughts are already well into next spring and summer. Just what kind of summer will we get? What about travel, both domestic and international? It can’t be any worse than 2020, right?
The only concern I have remain the mRNA based vaccines, not least from Moderna. There has never (as far as I know) been an mMRA drug/vaccine used in people. Its new bio-tech, and there are currently no longitudinal studies. Eventually of course there will be, but you can’t ‘Warp speed’ those types of studies, and it will be some years before we’ll know if any of the new vaccines have any long term adverse risks/effects.
I would keep in mind not all the new vaccines are mRNA based. The Oxford/AstraZenaca (AZN) is old school… injecting a ‘dead’ Corona, with the immune system (usually) learning to identify and then defend against it.
Anyway… its farewell to November, as 2020 is soon to wrap, with just 22 trading days left to go.
Goodnight from London