And they are coming in mostly better than expected
Think positive earnings surprises will not only last for 2020 but through 2021 as well. The World Economic Forum started to meet yesterday. This event was typically held in Davos, Switzerland but this year it is a virtual meeting. The greatest achievement of the global elites is that they are not seeing Trump this year. Trump was a threat to the Chinese Communist Party and to the global climate action plan. With Trump out, China is in a position of strength on the world stage. Biden has already indicated that he wants to normalize relationships with China. This will only quicken the path for China to overtake the United States as the global economic superpower.
Guess what? The keynote speaker for this year’s event was Chinese President Xi. He called for coordination and collaboration. He spoke on dealing with issues that are in the global economy and maintaining equal rights. Furthermore, he indirectly rebuked Trump by rejecting the “America first” type of ideology. The American election result is clearly playing into the hands of the Chinese.
Equities
Markets were all over the place in Monday’s trading. The Nasdaq first gapped up by around 190 but the Dow traded lower. Later the Nasdaq also fell and the Dow was down 433 points at one time. Finally, all major indexes rallied, but the Dow closed 37 points lower than its Friday’s close. But the Nasdaq ended at a new high with 93 points higher.
The modesty negative advance/ decline line ratio and a lower TRIN at .65 indicates that a lot of buying power was used to keep the stocks higher. All this indicates a top is in the offing.
Bonds
As expected prices rallied rapidly into our window of 170 to 171. The upward pressure can still continue, but it is in an area of shorting the bonds.
Euro
The Euro is also following a corrective pattern since the low at 1.2054. It should be capped under 1.2190 but can extend to 1.2230 to 1.2250. The risk remains more to the downside, and we are looking for a move to 1.1860 to 1.1890.
Gold
There is nothing new to comment on Gold from the last report.
Author: ©Abraham George, CEO, Founder of AllSeasonsPTL Capital Management Ltd.
