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The Close: Markets Push Higher While Awaiting Georgia Runoff Elections.

Well, we may have begun the year on a sour note when talking about the close of the market yesterday, but at least today was profitable for investors. All the major indexes were up for the day, including most of the stocks we discussed in the blog last night. The futures markets are currently flat, as investors are awaiting news regarding the Georgia runoff election. What stocks will sustain their success once COVID has ended? We will discuss all during this version of “The Close”.

Photo: CBS News

The Dow ended up, thankfully, 168 points, or +0.55%. The S&P 500 closed higher, up 26.21 points, or +0.71%. The Nasdaq closed the highest out of all three indexes, up +0.95 points, or 120.51 points. What does this mean? The market was anticipating good results within the Georgia election, where two republicans seats are up.

In Georgia, two republicans, Kelly Loeffler and David Perdue are looking towards a victory or else they lose the majority. It will result in a 50-50 tie within the senate which Vice President elect Harris will then be the mediator. This is a fearful possibility for investors as there is a substantial chance that with a democrat controlled senate, more corporate taxes will be imposed on businesses. Some analysts are predicting a 10% correction within the S&P if the democrats gain control.

Crude oil prices and aggregate energy gained as the economies re-strengthen. Saudi Arabia and Russia gave the world a New Years present, as Saudi Arabia sat down with OPEC and established they would cut their own oil production by 1 million barrels from February to March. This will cut Saudi’s daily production by more than 9%, which is a substantial level. Russia wanted an increase of output by a million and half barrels per day.

The US treasurys either remained unchanged or completely decimated today and throughout this pandemic. With the Fed being committed to keeping rates near zero, there is no appeal for these new bonds. Why would one buy a bond that is offering essentially no interest? The 30 year, which yields the highest most of the time, is down nearly 26% for the year ended, yielding at 1.709%. Bonds are certainly not the way to go at the moment, so when bonds are low, we’ll look for stocks which offer solid dividends.


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