Investors were put through the information wringer on Wednesday, and the major blue-chip indices finished the day with pretty disparate results.
The January retail sales report was, in the words of Barclays strategists, “significantly stronger than expected,” showing overall sales up 5.3% month-over-month following three straight months of declines.
“We had expected an overall improvement in January sales, after three months of declines,” says Pooja Sriram, vice president, US Economist at Barclays Investment Bank. “In particular, we expected the additional support to households from government pandemic-relief programs to support spending.
“Households started receiving the $600 per individual rebate check in January, as well as the federal unemployment assistance of $300 per week, under the COVID relief bill signed into law in late December.”
Another sign of economic resilience was rising U.S. wholesale inflation, which rose 1.3% month over month in January, reflecting strong domestic and export demand alike.
Interestingly, minutes from the January Fed meeting, released today, demonstrated worry about America’s path, with participants noting that “economic conditions were currently far from the Committee’s longer-run goals.”
“The minutes from the latest Fed meeting didn’t stray too far from the message Fed Chair Powell has been sending to market participants in his recent speeches where he indicated it’s not the right time to change policy,” says Charlie Ripley, senior investment strategist for Allianz Investment Management.
However, Bob Miller, BlackRock’s head of Americas Fundamental Fixed Income, says even the past few weeks since that meeting have “left that meeting’s minutes looking somewhat stale.”
“If we see vaccinations continuing apace, delivery of pending massive fiscal policy support and the arrival of warmer weather, we expect the resumption in spring of more ‘normal looking’ levels of previously shuttered economic activity. If accurate, the economy will be making ‘substantial further progress’ toward the FOMC’s goals – to use the Committee’s guidance for when they might no longer want to maintain the current pace of asset purchases.”
U.S. crude oil futures continued to climb amid supply disruptions in Texas, by 1.8% to $61.14 per barrel, pushing up the likes of Dow Jones Industrial Average component Chevron (CVX, +3.0%). The Dow managed to notch another record high, finishing up 0.3% to 31,613. However, a technology-sector slump sent the Nasdaq Composite 0.6% lower to 13,965.
Other action in the stock market today:
- The S&P 500 slipped marginally to 3,931.
- The small-cap Russell 2000 lost another 0.7% to 2,256.
- Gold futures declined for a fifth consecutive session, falling 1.5% to $1,772.80.
- Bitcoin prices, at $48,783 on Tuesday, shot 7% higher to 52,266. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
Out Now: Buffett’s Latest Picks
Yes, Chevron did have swelling energy prices on its side, but it also had a new ally: Warren Buffett.
The legendary value investor and CEO of Berkshire Hathaway (BRK.B) unveiled his latest transactions in a Tuesday evening 13F filing to the SEC, revealing that his holding company had taken a stake in the integrated energy giant during the final quarter of 2020.
And that was far from Uncle Warren’s only move.
Buffett, just like many retail investors, spent much of 2020 making wholesale changes to the Berkshire Hathaway equity portfolio. He was every bit as active during Q4, entering four new stakes, exiting five stocks outright, and tinkering with another dozen positions.
If you’re curious as to what the Oracle of Omaha is bullish on, or what has fallen out of his favor, read on as we examine each of Warren Buffett’s 21 latest portfolio moves over the most recent quarter:
Kyle Woodley was long Bitcoin as of this writing.