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ETF Tracker Newsletter For January 15, 2021

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DUMPING INTO THE WEEKEND

[Chart courtesy of MarketWatch.com]

  1. Moving the markets

The futures already painted bleak picture based on doubts whether Biden really would be able to pass its $1.9 Trillion stimulus package. Some see it as untenable, so the cash market took a dive at the opening. As slow climb out of that early hole reduced losses somewhat, but in the end, the major indexes closed in the red registering a rare weekly loss.

Tom Essaye, founder of The Sevens Report, said the proposal was “being met by a ‘sell the news’ reaction as markets already priced in most of what was included.”

“Plans for future historical stimulus, easy Fed policy and vaccines are now well known, and as such those catalysts simply don’t have the positive influence on stocks that they have over the past few months,” he added.

There you have it. Much of the announcement was already priced in, and in typical market fashion, only a blow-out statement of epic proportions would have sent the indexes higher, because merely meeting expectations is considered a nonevent in today’s world.

Earnings season got underway for the banks and, despite better-than-expected results, banking stocks fell. Go figure…

Not helping markets was an announcement by Pfizer that EU vaccines will be delayed, thereby contributing to a spanking of stocks in Europe and in the US as well.   

From a weekly perspective, Tuesday’s spike in bond yields reversed with prices vacillating around the 1.1% level, which appears to be the inflection point at this time.

The US Dollar Index went for a wild ride but dashed higher today thereby influencing Gold prices negatively again. It seems that the precious metal can’t find enough of a footing to launch a sustainable rally from.

I expect this volatility to continue next week.

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