1-week till Xmas edition

 Still no deal on Stimulus or Spending bill. Due to lack of progress on the latter Govt may shut down for a day or two, members of Congress will work through weekend. Moderna vaccine may be rolled out next week. So far 1.1 million have received vaccine -BBG

News:

  • VP pence received vaccine on TV
  • BOJ left policy unchanged
  • US blacklisting China’s top Chip maker-BBG
  • UK Factory orders 10-month highs
  • German IFO, Business climate indicator better then forecast head of the IFO “German economy is resilient”
  • The Fed’s balance sheet jumped by 1.66% vs prior week, the biggest weekly jump in a few months. Currently stands at $7.411 T
  • Soybeans up through $12 trading 6-year highs. Ongoing strikes in Argentina the reason for the latest Push higher. Per USDA 90% of expected soy exports have been booked” Supplies becoming thin, as the US must keep a  certain amount of beans for domestic use.
  • Iron ore traded on Dalian exchange +3.2% overnight, once again near 9-year highs
  • LME copper >$8,000 7-year highs overnight Goldman and BlackRock calling for some new super cycle in Commodities (BBG) hard to argue with this so far.
  • Gold looking at a 3rd weekly gain in a bit surprised by this.
  • DCE Iron Ore close +6.23% SHFE Steel Rebar +2.91% Zinc 1.55% ZC Thermal Coal +3.63% Coking Coal +2.90%-Mizuho

Markets sideways for now, Waiting on word from Congress regarding stimulus and spending bills. Today Quadruple witching and SPX rebalance and tesla addition to SPX.

 From Mizuho “Get ready for Dec Opex and Tesla games today. Tesla’s grand entrance into the S&P 500 is expected to be preceded by a huge trade, with the addition to the S&P 500 forcing index-tracking funds to buy over $80 billion worth of Tesla shares by the end of today’s session so their portfolios correctly reflect the index, according to S&P Dow Jones Indices. Those funds will simultaneously have to sell other S&P 500 constituents’ shares worth the same amount. Tesla is by far the most traded stock on Wall Street, with $18 billion worth of its shares exchanged on average in each session over the past 12 months, easily beating Apple, in second place with average daily trades of $14 billion, according to Refinitiv – Reuters.

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