Small Business Optimism Drops Below Index Average in December The NFIB Small Business Optimism Index declined 5.5 points in December to 95.9, falling below the average Index value since 1973 of 98. Nine of the 10 Index components declined and only one improved.
Jabs equal jobs? Fed sees possible economic boom if vaccine gets on track
(…) “We have a trillion (dollars) in excess savings. We have checks coming in the mailbox. There will be enough demand” from consumers to keep the recovery on track, Fed Vice Chair Richard Clarida said last week in forecasting an “impressive” 2021. (…)
“The recovery is directly linked to the pace of vaccinations and its effectiveness both in terms of numbers, but also in terms of the confidence it instills in consumers,” Atlanta Fed President Raphael Bostic said on Monday. A disappointing rollout “could push us back several quarters” in returning the economy to its pre-pandemic level. (…)
As of Monday the Centers for Disease Control and Prevention said about 2.7% of the U.S. population had received at least one vaccine dose, with the two formulations approved so far in the U.S. both requiring a second shot. (…)
U.S. Job Postings End 2020 Well Below Pre-Pandemic Levels The number of help-wanted ads increased more slowly in December, evidence the labor market is losing momentum amid rising coronavirus cases.
Available jobs posted online were down 10.6% at the end of December from a year earlier, according to job search site Indeed’s measure of job posting trends. Postings rose from the end of November, when the number of available jobs were 11.8% below 2019’s trend, but the pace of improvement has eased since the summer, when businesses started to reopen after spring lockdowns. (…)
FIBER: Industrial Commodity Prices Continue to Strengthen
Strength in industrial output is continuing. Industrial production rose during each of the seven months ended November, up 20.5% during that period. At the same time, the Industrial Materials Price Index, from the Foundation for International Business and Economic Research (FIBER), has increased by roughly one-quarter.
Price strength in the metals group has continued with a 32.5% six-month rise and a 4.8% gain during the last four weeks. Steel scrap prices jumped 80.4% in six months and zinc prices rose by roughly one-third during that period. The price of copper scrap rose 29.0% in six months while aluminum prices rose one-quarter over that period. Lead prices are close behind with a 13.1% six-month rise.
Prices in the crude oil & benzene group rose 19.5% during the last six months and 2.0% during the last four weeks. A 22.5% half-year rise in crude oil prices to $49.52 per barrel powered the increase. Excluding crude oil, industrial commodity prices have risen 23.5% in six months and 3.5% in the last four weeks. Prices of the petro-chemical benzene rose 69.8% in the last six months.
These gains have been accompanied by a 34.8% rise in prices in the miscellaneous group during the last six months. Framing lumber costs nearly doubled during the period. This increase was accompanied by a 39.2% half-year rise in natural rubber prices, though they declined during the last four weeks. Plywood prices have been unchanged since December 2019.
EM governments around the world are trying to secure domestic supplies which has exacerbated the fundamental tightness in grains, with Argentina banning corn exports, Russia putting an export tax on wheat and China emphasizing the requirement for strategic stockpiles of grains and pork in its latest 5 year plan. (GS)
Oil Producers Commit to Supply Curbs, Sustaining Price Rally Oil is extending a steady recovery into 2021, aided by fresh signals that the world’s biggest producers won’t turn on the spigots and flood the market.
(…) OPEC’s coordination marks a reversal from early last year, when a production feud between Saudi Arabia and Russia glutted the market as demand crashed. (…)
(…) U.S. shale producers are also indicating that they are in no rush to increase supply and instead plan to pay off debt and return cash to shareholders. Taken together, the commitments should help the energy industry’s recovery and highlight a recognition among producers that the economic toll caused by the pandemic is far from over, investors and industry executives say. That means there is no need for suppliers to spend on additional output. (…)
Even with oil at $50, it would take the 20 largest U.S. shale companies 3.4 years on average to bring debt levels down to healthy levels relative to their overall capitalization, according to consulting firm Wood Mackenzie. (…)
Canadian Banking regulator says pandemic uncertainty means now is not the time to consider higher dividends, share buybacks
(…) Three of the Big Six banks have signalled their willingness to pursue mergers and acquisitions. Toronto-Dominion Bank is often cited as the most likely candidate, and CEO Bharat Masrani said Monday that the bank has a track record of taking advantage of major downturns to make large deals. “If something makes sense … would we look at it? Yes, we would,” he said. “I expect something will show up given the level of dislocations that have taken place. But that does not necessarily mean that we’ll do the deal.”
Mr. White and Mr. McKay both said they would consider making a deal to get stronger outside their core footprints in the United States – BMO is strongest in the Midwest, and RBC in California and New York. But both CEOs also said they will invest first in their existing businesses. “We don’t feel a compulsion to transact,” Mr. White said. (…)
President-elect Biden says he will call on Congress to forgive $10,000 in student loan debt and will unveil his economic plan on Thursday. (CNBC)
China Reimposes Lockdowns as It Battles the Worst Virus Outbreak in Months More than 20 million people have been placed under quarantine, and authorities have cautioned against travel, just weeks ahead of the biggest holiday of the year.
(…) On Tuesday, China’s National Health Commission reported 42 new cases of locally transmitted symptomatic infection, a day after recording 85 such cases—its highest daily count in six months.
The bulk of the recent cases have been detected in the northern province of Hebei, which surrounds China’s capital city of Beijing. (…)
China’s leadership has made clear that its priority is containing the pandemic, and on Saturday, Premier Li Keqiang warned officials against covering up or underreporting cases, describing epidemic control as a matter of national security and social stability, as well as public health.
Though economic activity had mostly returned to normal by the summer, domestic travel had only bounced back to about two-thirds of pre-coronavirus levels by November, Cui Ernan, a Beijing-based analyst at consulting firm Gavekal Dragonomics told clients in a note. (…)
WRONG SIGNAL: Elon Musk Told Twitter to ‘Use Signal.’ Investors Plowed Into the Wrong one
A two-word app recommendation from Elon Musk has turned into a massive rally in the shares of a tiny medical device company in another case of mistaken identity.
“Use Signal,” the Tesla Inc. chief executive officer wrote on Twitter on Jan. 7, apparently referring to the encrypted messaging service. By the end of the day, Signal Advance Inc. shares had surged more than sixfold. That was enough to push Signal Advance’s rally more than 5,100% in three trading days giving it a market valuation of $390 million.
Axios extends the timeline:
The surge in Texas healthcare company Signal Advance continued on Monday as the stock rose by 438%, after previously gaining 1800% during one 24-hour period. The catalyst: A Thursday tweet from Tesla CEO Elon Musk that said simply, “Use Signal.” Musk was recommending the encrypted messaging service (an independent 501c3) that competes with Facebook’s WhatsApp, but a frenzy ensued in Signal Advance (SIGL) nonetheless that has continued for days.
The company’s market cap has risen from around $7 million last week to more than $659 million as of Monday’s close, according to FactSet. (Axios)
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