Yesterday, the market was nice and steady all session long, as equities bolted out of the gate and refused to move lower. The only problem is while buyers emerged at any hint of weakening, fence-sitters couldn’t be seduced off the sidelines.  

I guess there was this “Waiting for Godot” aspect to the session. But this act is getting old. And today we’ll see how serious lawmakers are about helping the American public before they rush home to enjoy chestnuts roasting over an open fire – and Jack Frost nipping at their collective noses.

It's going to be a great Christmas for politicians as the election dust settles, and they don't have to face angry town halls. So, it was nice and steady for establishment politicians and establishment stocks in the S&P 500, but a little more raucous for new names and hot industries. 

Some of these names are in the Russell 2000, which is up +18.6% for the year - stretching its performance lead of the S&P 500 +15.2%, and trailing only the NASDAQ Composite, which is +42.3%. They are all leaving the stodgy Dow Jones Industrials (DJA) in the dust by +6.2%.

Russell 2000

Message of the Market

It’s an interesting picture when looking at the top performers. Newer publicly traded names, such as Etsy (ETSY), PayPal (PYPL), and ServiceNow (NOW), are rocking as they upend their industries.

The same is true for Nvidia (NVDA) and Advanced Micro Devices (AMD). Both have eclipsed the supremacy of Intel (INTC) in industry stature and stock performance. 

L Brands (LB) is the story of survival being rewarded while Freeport-McMoRan (FCX) is riding the rally in commodities.

Carrier Global (CARR) is a spinoff, and FedEx (FDX) went from a serious laggard that was being pushed around by Amazon (AMZN), to a world-beater that returned to its competitive roots. After the bell, the company posted strong financial results, but failure to provide guidance sent the shares lower:

1) Etsy, Inc. (ETSY)

• Price Gain: 301.35% 2020 year-to-date

 2) Carrier Global Corporation (CARR)

• Price Gain: 213.92% 2020 year-to-date

 3) Nvidia Corporation (NVDA)

• Price Gain: 127.12% 2020 year-to-date

 4) L Brands Inc. (LB)

• Price Gain: 117.00% 2020 year-to-date

 5) Advanced Micro Devices Inc (AMD)

• Price Gain: 111.77% 2020 year-to-date

 6) PayPal (PYPL)

• Price Gain: 104.86% 2020 year-to-date

 7) FedEx Corporation (FDX)

• Price Gain: 88.97% 2020 year-to-date

 8) Albemarle Corp (ALB)

• Price Gain: 88.86% 2020 year-to-date

 9) ServiceNow, Inc. (NOW)

• Price Gain: 86.80% 2020 year-to-date

 10) Freeport-McMoRan Inc. (FCX)

• Price Gain: 85.21% 2020 year-to-date

Yesterday, the big winner was Lennar (LEN), which continues to knock the cover off the ball with its earnings report (joined by Pulte Homes (PHM) with D.R. Horton (DHI) in the top ten), as the housing boom picks up even greater momentum.

Only two sectors finished lower. Communication Services was weighed down by AT&T (T), which caught a downgrade from Morgan Stanely (MS), and Energy, which gave up some profits.

S&P 500 Index	+0.58%
Communication Services XLC		-0.25%
Consumer Discretionary XLY	+0.68%
Consumer Staples XLP	+0.64%
Energy XLE		-0.47%
Financials XLF	+0.28%
Health Care XLV	+1.07%
Industrials XLI	+0.61%
Materials XLB	+1.15%
Real Estate XLRE	+1.17%
Technology XLK	+0.79%
Utilities XLU	+0.67%

Market Breadth

Market breadth was also much stronger than headline moves in major equity indices. There are some sizzling stocks pulling in buyers from major names like Microsoft (MSFT).

Market Breadth	NYSE	NASDAQ
Advancing	2,090	2,530
Declining	1,044	1,172
52 Week High	246	425
52 Week Low	6	11
Up Volume	246	3.29B
Down Volume	1.23B	1.62B

Year-End Tax Loss Selling

It’s that time again. Time for investors to consider taking losses that could offset tax liabilities. It has been a great year for us, but we are closing several names in the Hotline Model Portfolio. Each subscriber is urged to speak with their accountant or tax professional for specific benefits.   

Watch for alerts this morning and details in the weekly Portfolio Approach Report.

KEY TAKEAWAYS

• Tax selling is when an investor sells an asset at a capital loss in order to lower or eliminate the capital gain realized by other investments, for income tax purposes.
• A wash sale is when an investor sells an asset through a broker in order to realize a loss, but simultaneously repurchases the same asset from another broker within 30 days of the sale.
• The IRS prohibits wash sales

-Investopedia

Portfolio Approach

There will be exits today in the Hotline Model Portfolio, as we take losses on ideas, where risks have changed enough that it would be worth the tax advantage and the ability to potentially buy back in 30 days.

Today's Session

We do not believe there will be a stimulus deal today.  We are waiting for smattering of second tier data.  We are watching oil to see if it can break through a huge resistance point (rig count later today).

Upside bias is strong.  Let's see if there is any profit-taking pressure early in session.

Comments

I think we are witnessing a complete failure of Congress to do the job that they are very well paid to do. Ken on 12/18/2020 9:42:15 AM

Nancy Pelosi doesn't have a heart for the people that really need help.Merry Christmas for her but not for many others. Robert on 12/18/2020 10:07:25 AM

Hope springs eternal, but if they leave without resolving this bill, they all should be fired and arrested for dereliction of their duties! If this were a business (and in a way, it is) they would be fired. I know firing isn’t possible, but many of those, and we all know the names, who over the last four years, have been fighting against our President and all the good he has done, should be censured. They have not only failed us, the American people, but have actively done harm to all Americans. Their going home for a holiday with their families, while telling us not to be with our families is insulting. While not providing monies for small business families so they can put food on their tables, is criminal. Georgette Eveland-Alosa on 12/18/2020 10:33:52 AM

I believe a deal will not be reached as the Democrats are likely waiting to be in full control in January. At which point the stimulus will be filled with pork. JM Abrams on 12/18/2020 10:45:16 AM

I think a stimulus package should be passed before year's end but I do not think the Dems will allow it. They would rather have the American people suffer more thinking they will be more appreciative of the Dems once they gain power, albeit illegally. Cheryl on 12/18/2020 11:18:57 AM

Pelosi has been holding out on making ANY deal that would have benefited Pres. Trump, but now that Uncle Joe is about to take the reins, I believe she WILL "Let's Make a Deal." A sort-of Christmas present before the "Do Nothing" Congress adjourns for the holidays. Small business continues to need financial support....so? James Warlin on 12/18/2020 11:34:03 AM

We agree with all of the above comments. President Trump has fought the dems, RINOs, tech and the Chinese to protect the voters of America. Now, if the succeed in stealing the presidential election we need to keep supporting our President a be vigilent and opposed the swamp! Lorin K on 12/18/2020 11:43:27 AM

No, because of Pelosi. She'll wait until, she hopes, the biden/obama cabal is in and then she try to bail out the liberal cities! Lorin K on 12/18/2020 11:44:47 AM

Again legislators continue to shrug their responsibilities to the citizens and our country. They have to continue to add their selfish ding berries to every piece of legislation. Lets get time limits for all politicians. No longer a life time profession. Allen Hare on 12/18/2020 12:03:05 PM

Probably no deal before they break, no empathy from the swamp cronies(Both Republicans & Democrats) Send your Congressmen a piece of coal to their office or home. Reuben Jones on 12/18/2020 12:29:50 PM

No deal. Congress will continue to abdicate its responsibility. That leaves it to the Fed, or to executive orders to help during COVID. Harvey Wheat on 12/18/2020 1:39:53 PM

The ecomony seems to be faltering and today is the last day the Senate is to be in session and congress does not return until late in January. So its time to 'make a deal' and just foreget about the its all about me syndrome. Tom Lynn on 12/18/2020 1:45:14 PM

No Deal Pelosi is waiting to get hopefully senate control ,then go to bail out all the democratic states and cities that have piled up huge debts. James Cuff on 12/18/2020 1:54:39 PM

I hope they help the unemployed. JAMES SLAMICK on 12/18/2020 2:14:57 PM

The inability of the government to do almost anything productive makes me believe more and more in creating hard term/time limits for all offices to eliminate lifetime politicians that only want to get to the next term. Maybe 20 years is a good start but should eventually be 10 years. Jack G on 12/18/2020 3:02:07 PM

If ever there was a time for holiday cheer, this is it. Can't the legislature at least give the appearance of concern for its constituency? Patricia Flynn on 12/18/2020 7:38:43 PM

There should be a clean COVID bill to provide more than $600 in assistance to individual citizens, to their immediate families, and offer loan guarantees to small businesses that have maintained most (75%+?) of their staff count through yearend 2020, and that can document their business losses not covered by interruption insurance. I absolutely agree with our president that the bill sent through congress is a disgrace. If the foreign expenditures in this horrible bill are truly US obligations to other countries then those should be in a SEPARATE bill requiring a separate vote. The arts and museums should not receive different treatment from other businesses. Re-opening the country and holding China accountable is the ONLY solution to our economic malaise. Jonathan L on 12/23/2020 2:58:00 PM

I am a nurse and have witnessed first hand the devastation Covid has caused, not just physically, but mentally! People are hurrying so many ways! Congress should approve $2000, but only with the stipulations President Trump has requested! I am appalled by the fraud in this election! If this is not addressed, we will never have a fair election!! Jan Blume on 12/31/2020 11:24:08 AM

Stimulus dec31 2020 done deal, congratulations to everyone Eric Ellis on 1/4/2021 8:19:37 AM

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