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Trump is about to leave DC. This is bad news for these stocks, says the strategist



A modest recovery appears to be underway after Monday’s withdrawal, as hope springs up forever for new stimulus from President-elect Joe Biden’s administration. And why should the market stop doing what it has been doing for a long time now? Bounce back again and again.

But are there problems in paradise? “The stock market’s ability to rally decisively in the light of the tragic events at Capitol 1/6, the escalation of the virus, a poor employment report and rising interest rates confirm that a new, more speculative, more volatile phase of the bull market has begun,” says BTIG’s CEO and derivatives strategist Julian Emanuel and capital strategy associate Michael Chu in a note.

“Such a phase lasted for more than 6 months in 1

999-2000, when the S&P 500 advanced another 25% with several 15% sales in between. The depth of such withdrawals in 2021 largely depends on the dividends, ”they say. And if yields continue to rise, as they did on Monday, then high-multiple growth names could be in trouble, they say.

They also provide ours today’s calland zero on one sector, they say investors may want to move away from the future.

Last month, they warned that communications and media stocks face risks from higher rates, increased regulatory control and “a world tired of years of media consumption.”

Emanuel and Chu update these thoughts on Tuesday: “President Trump’s leaving office will, of course, whet the appetite for the media, as will the reopening of the economy and the possible return of travel and ‘off-screen’ leisure activities.” That and the latest features to restrict access to content providers and platforms with the GOOGL Alphabet,
Apple AAPL,
Facebook FB
and Twitter TWTR
can only inspire politicians to seek more oversight of them.

Then there is also the issue of investors shifting towards value and away from growth stocks, which will lean on the communications sector.

Here is their list of S&P 1500 communications service stocks that have surpassed their broader index since the end of 2019, but which are ready to move from “leaders to backward, as politicians place more emphasis on the media, while the rest of us attaches less importance. “

Among the above stocks are Facebook, Disney DIS,
Netflix NFLX,
New York Times NYT,
and the publisher of MarketWatch, which produces this report, News Corp. NWSA

NWS

Last word goes to Howard Marks, co-founder and co-chair of Oaktree Capital Management. He explains in detail in his latest newsletter how investors might not look at that growth versus value-equity strategy quite rightly.

“Some of today’s high valuations are probably more than justified by future prospects, while others are ridiculous – just as some companies with low valuations may face imminent doom, while others are just short-lived weakened,” he says. Read more here.

The markets

US stock futures ES00

YM00

NQ00
is modestly higher, but European stocks XX: SXXP
is down as COVID-19 infection worries. Asian stocks ended higher. The dividend on the 10-year government bond BX: TMUBMUSD10Y
continues to creep higher after the largest weekly increase since June last week.

Bitcoin BTCUSD
volatility continues, with cryptocurrency rising 8% after tumbling between Sunday and Monday.

The hum

U.S. sentiment from small businesses fell to a seven-month low in December. The results of the surveys on job openings and labor market turnover are also ahead.

The German lender Deutsche Bank DB
has reportedly stopped relations with President Donald Trump and New York’s signature bank SBNY
calls for his resignation after it also said it would no longer do business with him after last week’s riots on Capitol Hill. Trump tried to blame these attacks last week on “Antifa people,” Axios reported, citing a tense phone call between him and House Minority Leader Kevin McCarthy, who replied that no, it was “MAGA. I know. I was there. ”

Parts of Zoom Video ZM
is down after the communications technology company said it was selling $ 1.5 billion in stock.

Network management software group SolarWinds SWI
says it has found the source of recent cyber attacks.

Some Democratic lawmakers say they have tested positive for COVID-19 while hiding from colleagues who refused to wear face masks during last week’s Capitol Hill riots.

Dealer Walmart WMT
will start its own financial technology company for clients and employees with a backer for the investment platform Robinhood.

The diagram

Here’s a look at how COVID-19 is progressing in the US, with deaths and cases outside their peaks a bit.

Random reading

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