Monday's Market Recap - A Rare Down Day For The Start Of A New Year.
What is The Premarket Telling Us?
7:30 AM.
On the first trading day of 2021, US stock futures are moderately elevated. Dow futures are up 156 points, Nasdaq futures up 54 points, and S&P futures 18 points. Asian markets ended their trading session mixed.
On The Bond Desk:
The US 10 Year Bond Yield at 0.92%, down 0.93%.
Currency Desk:
Eurodollar: 1.21
UK Pound: 1.36
Crude Oil:
WTI crude oil futures at $48.23/barrel, down 0.53%.
On the Earnings Calendar:
None to report.
In M&A News:
MGM resorts is making a bid for British rival Entain in a deal worth $11.00 billion.
Teledyne buying Flir cash and stock deal worth $8.00 billion.
Centene is buying Magellan Health for $2.20 billion.
What About The Asian And European Markets?
Major Asian markets closed mixed today. Japan (Nikkei 225) down 0.69%, Shanghai gained 0.86%, Hong Kong (Hang Seng) gained 0.89%.
Major European markets closed with gains. German (DAX) up 0.06%, France CAC 40 up 0.68%, London FTSE 100 up 1.72%.
Market And Sector Dynamics
US stocks opened the first trading day of 2021 with modest gains with the Dow up 50 points, Nasdaq up 56 points, and S&P gained 12 points. WTI crude oil started off lower at $48.32/barrel, down 0.43%, while the US 10 Year hovered at 0.953%.
Despite a flurry of positive merger announcements, one each in the entertainment, aerospace & defense, and healthcare sectors, markets instead chose to focus on the poor rollout of vaccinations nationwide and the runoff Georgia special election scheduled for tomorrow. The calculus is that if the Democrats win both Senate seats, they will control and take over the Senate, which could trigger a market selloff of between 6-10%. Hence investor chose to book some profits today.
Markets turned lower shortly after the open and steadily declined throughout the morning session reaching an intraday low, with the Dow down more than 700 points, a few minutes after noontime. Markets gradually recovered nearly half of the earlier losses during the remainder of the session, and into the close.
Today's selloff was very pronounced, with ten of the eleven S&P sectors ending the day with losses, led by Real Estate, Utilities, Industrials, Technology, Communication Services, Financials, Consumer Discretionary, Consumer Staples, Basic Materials, and Healthcare. Energy ended with modest gains.
Factors Influencing Today's Market
Investors focused mostly on tomorrow's Georgia Senate runoff election for its two Senate seats.
Mounting Covid-19 infections remains a concern for investors, along with the slow rollout of vaccinations.
US 10 Year Bond closed at 0.918%, down 1.45%.
WTI crude oil closed at $47.41/barrel, down 2.13%.
Today was a Merger Monday of sorts with three announced mergers.
Market Close Volume Traded And Advance Decline Ratio
Markets ended the first trading day of the new year moderately lower, after getting off to a modestly positive start this morning, before turning deeply into negative territory. Dow closed down 382.59 points, Nasdaq fell 189.83 points, and the S&P lost 55.42 points. Total NYSE volume traded, a moderately heavy 5.13 billion shares. Declining shares outpaced Advancing shares by 2.47:1.
Data Sources: Bloomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance.
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