Morning 1-21

In total, 43 S&P 500 companies have now reported “4Q 2020” earnings, and 91% have topped EPS estimates by an average margin of +18.54%, which is roughly 4x the normal beat rate. Collectively, these 43 companies have seen their EPS grow +15.81% versus the 4Q 2019 period – The Earnings Scout (via Mizuho) Further good news for Investors and for higher stock prices “In the first two weeks of the new year, corporations announced $29 billion of buybacks, up 46% from a year earlier, data compiled by Birinyi Associates show (Bloomberg). Since the end of December, the S&P 500 Buyback Index (SPBUYUP Index 21536.87) has climbed almost 6%, compared with a gain of 1.1% for the broader gauge. Netflix Inc said in an investor letter Tuesday that it “will explore returning cash to shareholders through ongoing stock buybacks,” as it did between 2007 and 2011. (Mizuho) Spx, Ndx and Dow all closed at new all-time highs. also, MSCI world stock Index all-time highs as well. Earnings season rolls on this morning a handful of Regional banks reported earnings all beat expectations, I have not looked below the hood on these, Union pacific missed on earnings.

 Plenty of excitement regarding stocks but not so for treasuries, 10 year yields steady above 1 % which is a slight positive for stocks but disappointment for Bond traders, where is the volatility? I will tell you where it is in Bitcoin trading below 31,500 down 9% today 4.2% yesterday.  Dollar index working on a 4th consecutive lower close and the rotation trade from Growth to Cyclicals or Big tech to small caps taking a pause as NDX has outperformed RTy for the last 3 days. European Bourse a bit sideways to lower on the hawkish or less dovish ECB.

Bank of Japan meeting last night no adjustment to JBG purchases, BOJ will take up the topic in March at its Policy Review meeting. They did upgrade GDP outlook for next Fiscal year starting in April.

Markets:

Real rates Higher this morning weighing on precious metals.

 Grains higher, but take note that Argentine corn is now cheaper then US corn and Brazilian Ag Consultant increased size of  soy Crop (DTN news) Copper +.85%,Gold and Silver unchanged Platinum though +3.82%,LNG exports disappointing for the second day in a row Nat Gas running out of Bullish Support, Bonds   a touch heavy following  Bunds and Bull lower as Lagarde hints at not using all of the ECB stimulus envelope and then Saying that risk  are still to downside but less pronounced, she also see Upward pressure on Inflation -I paraphrase.  

  Today’s Economic data Housing starts, A big beat fastest pace since 2006 (BBG), Jobless claims less bad and philly fed a substantial beat to the upside. Talk regarding Virus Eli Lilly antibody therapy reduced nursing home residents’ risk of Symptomatic COVID-19 by as much as 80%, also new cases may have peaked in Germany.

  • Yesterday’s API data bearish for Oil as Builds reported.
  • Biden will sign more Executive orders today.
  • Yellen likely to be confirmed by tomorrow.
  • Twitter blocked the official Chinese embassy account.

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