BMO Capital Markets chief investment officer Brian Belski provides insight into the market’s response to the ADP employment report and how it could expedite a further stimulus agreement.
Technical stocks fell in early trading, with the tech Nasdaq falling more than 1% as investors positioned themselves for democratic control of the legislature and executive.
The decline in names like Apple, Facebook and Amazon, all of which are more than 2% lower, is about concerns that additional regulation could hamper their profits.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| I: COMP | NASDAQ COMPOSITION INDEX | 12727.305561 | -91.65 | -0.71% |
| AAPL | APPLE INC. | 127.81 | -3.20 | -2.44% |
| FB | FACEBOOK INC. | 263.40 | -7.57 | -2.79% |
| AMZN | AMAZON.COM INC. | 3 183.47 | -35.04 | -1.09% |
The Dow Jones industrial average and the S&P reversed early losses and led higher through finance and materials. Caterpillar is the leading Dow name.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| Ek: DJI | DOW JONES AVERAGE | 30656.03 | +264.43 | + 0.87% |
| CAT | CATERPILLAR INC. | 192.77 | +9.13 | + 4.97% |
| SP500 | S&P 500 | 3737.31 | +10.45 | + 0.28% |
| XLF | FINANCIAL CHOOSE SECTOR SPDR ETF | 30.16 | +0.95 | + 3.25% |
| XLB | MATERIAL SELECT SECTOR SPDR ETF | 75.56 | +2.25 | + 3.06% |
Fox News plans to have Democratic challenger Raphael Warnock defeat incumbent Republican Senator Kelly Loeffler, while the race between Republican David Perdue and Democratic challenger Jon Ossoff was too close to call.
Stocks that benefit from a democratic victory include names of solar power and green energy that are experiencing some action.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| SEDG | SOLAREDGE TECHNOLOGIES INC. | 354.78 | +37.97 | + 11.99% |
| RUN | SUNRUN | 80.45 | +7.37 | + 10.08% |
| FSLR | FIRST SOLAR INC. | 97.27 | +5.11 | + 5.55% |
| SPWR | SUNPOWER CORP. | 28.52 | +3.78 | + 15.28% |
In addition, cannabis stocks may also benefit, as Democrats may strive for broader legalization.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| CGC | CANOPY GROWTH CORP | 30.45 | +3.41 | + 12.61% |
| ACB | AURORA CANNABIS | 10.84 | +1.17 | + 12.04% |
ECONOMIC REPORTS
According to ADP, the U.S. lost 123,000 jobs in December, compared to the expected profit of 88,000, according to economists surveyed by Refinitiv.
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Data on mortgage applications for the week ended January 2 show a rise of 1.7% as the US housing market remains a bright spot in the economy.
Dealers also receive updated readings on the PMI of IHS Markit Services, factory orders and the weekly report on crude oil.
BITCOIN CAN HIT SIX DIGITS ‘JPMORGAN, BUT THERE IS A CATCH
In other asset classes, bitcoin rose above the $ 35,000 level in morning trading.
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Oil and gold also rose, with West Texas Intermediate crude rising above $ 50 a barrel, while gold hit $ 1,959.50 an ounce.