Advanced Share Registry : Market News 15 Jan 2021

Ominous employment Data 'smashed' markets several tenths of one per cent overnight. That uber calm reaction and low volatility are likely due to the comforting promise that Democrats will soon have unified control of the US federal government. Jerome Powell also confirmed the Feds market-friendly policies would remain 'until the job is well and truly done'. In other words, they've got investors backs.

The jobs report bears out precisely what Biden and his crew ran on in the election. Control of the pandemic is essential if momentum in the job's recovery is to be maintained. As it stands, the enormous stimulus efforts to date are quickly going to waste as the velocity of new US jobless claims last week hit 5-month highs. The relentless coronavirus virus pushed more workers out of jobs as businesses closed for the winter following the lack of a unified Federal response to the virus in the summer. Economists surveyed had guessed 800,000, but initial jobless claims vaulted up another 181,000 to a seasonally adjusted 965,000 in the seven days ended Jan. 9.

Temporary federal-relief programs accepted another 284,470 applications. It was terrible enough that consolidated claims hadn't dropped below 1 million a week since last spring, but the current 1.44 million makes the chances of momentum gains for the new year even harder. At least those fresh jobless will walk into the 900-billion-dollar stimulus plan eked out recently which would have settled market nerves in itself. In some potential good news, a government watchdog agency that said fraud, double counting and other problems are inflating unemployment numbers.

Biden will announce the scale and nature of his party's support plans very shortly, but we may well be hearing that $2 trillion number bandied around again. A diminished GOP will undoubtedly express shock and 'awwww' at the number, but it'll be at least two years before their opinion has a chance at relevance; if they win seats in congressional elections. Markets added a few points to consider new highs before mustering the modest sell-off into the red. Big Tech stocks remain politically radioactive, but the Nasdaq still managed to reach a new record while consumer discretionary companies fell in empathy to the less-employed-consumers data. However, vaccine optimism is undiminished despite logistical setbacks, and stimuli optimism as Biden rides into town in just a few days has never been better. Finally, Powell's low-interest rates make it impossible for money to exit stock markets, and when it does, we will likely be talking about a 'Black Swan Event'. In other words, we won't see it coming.

With a full resurgence of the virus in most metro areas around the country, Biden's action may be limited due to strong partisan opinions on health thanks to trumps mixed messaging. Data from Johns Hopkins University confirms 23m infections 385,503 deaths to date. Practically all 49 states are now deteriorating as California, the sunbelt, south-east, mid-Atlantic and north-east see health services cope and often, don't cope, with its winter ferocity.

Dow Jones	30991.52	-68.95	-0.2%
US S&P500	3795.54	-14.3	-0.4%
US Nasdaq	13112.64	-16.314	-0.1%
UK FTSE	6801.96	+56.44	+0.8%
German Dax	13988.70	+48.99	+0.4%
Gold Futures ($US/oz)	1851.4	-3.50	-0.2%
Spot Iron Ore ($US/t)	171.45	+2.45	+1.4%

Across the Atlantic Europe's, STOXX 600 index hoisted another 0.7% up the mast to 11-month highs. Chinese Export data provided the impetus as it grew 14.5 % YoY in Oct 2020. Total Imports read 178.7 USD bn in Oct 2020, for a 14.2 % improvement year on year. Their imports also impressed, up 6.5% compared with expectations for a 5% rise. Travel and leisure sectors soared 1.9% to lead gains as vaccination rollouts energised opinion that an end to the pandemic approaches. Early trial data from Johnston & Johnston's' indicated their one-shot vaccine is safe and offers excellent immune responses in young and elderly volunteers. Europe also loves the promise of a democratic styled US stimulus-response shortly. Our market appears flat to soft on futures pre-open while our currency is on a tear again from iron ore, gold, and oil gains.

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