Market Moment
Glen Eagle®: America’s Women-Owned Trading Desk®
02/08/2021
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High Yield Analysis: At the end of last year the iBoxx High Yield Index provided a yield of 4.23%, lower than historical yields due to the increase in demand from investors looking for income. Although this was an all-time low in terms of yield, a recent academic study out of George Mason University shows that since 1990 the average high yield bond fund has had an annual return of 7.1% with a volatility of 7.7%. Over the same period of time the research shows that the S&P500 had a similar annual return at 7.8% but double the volatility (14.5%)
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SPAC Returns Questioned: 248 different SPACs or blank-check companies were able to raise $83 billion in IPOs last year which allowed them to buy innovative companies like DraftKings and Nikola so they could be traded in the public equity markets. Another 118 SPACs have gone public since the start of 2021. Despite this strong momentum, research from the Edge Consulting Group shows that of the SPACs in their study, 65% saw their stock prices decline a month after they merged with an underlying firm. 71% were down a year later.
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Amazon Is Still Amazon: As Jeff Bezos steps down as CEO some have wondered about the future of Amazon. The reality, however, is that the company, which has seen its stock price rise every year since 2014 (increasing 10x), has already set itself on a clear path. The direction of that path has been determined by Amazon Web Services (AWS) which has seen its revenue grow by 475% over the past five years and is expected to generate over $50 billion in revenue next year. AWS is now worth more than the retail portion of the business.
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Oil’s Weight on China: As oil has continued rallying, some investors worry that if it continues it could weigh down the Chinese economy, which is a large oil importer. This occurred in early 2018 when the rise in Brent prices, along with policy changes in Beijing, led to a pullback in the Chinese equity market. Today, those same forces seem to be in place as oil prices continue to rise, the Chinese government pursues anti-trust regulatory crackdown, and the People’s Bank of China decreases liquidity.
Economic Calendar
Monday: N/A
Tuesday: NFIB Small business index - Jan, Job openings - Dec
Wednesday: CPI - Jan, Wholesale inventories - Dec, Federal budget- Jan
Thursday: Jobless claims, initial -Feb 6th and continuing - Jan 30th
Friday: Consumer sentiment index (prelim) - Feb
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US Futures
S&P 3889.25 +0.23%
DOW 31,134 +0.30%
NASDAQ 13,145 +0.35%
World Markets
FTSE 6541.47 +.80%
NIKKEI 29,388.5 +2.12%
Hang Seng 29,319.47
+0.11%
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Treasuries
3 Mo 0.035%
10YR 1.19%
30 YR 1.97%
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Currencies
Euro $1.203
Pound $1.369
Yen $105.59
Commodities
Gold 1815.2 +0.12%
WTI Crude 57.53 +1.20%
Silver 27.12
+.37%
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Upcoming Earnings Calls
Monday - HAS, TTWB, CHGG
Tuesday - CNC, COTY, SPGI, TNT, TWTR, LYFT, CSCO
Wednesday - KO, UAA, GM, UBER, MGM, SONO, ZNGZ, ORLY
Thursday - PEP, KHC, YETI, TSN, TAP, DUK, DIS, EXPE
Friday - N/A
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Consider working with Glen Eagle as one of your preferred partner trading desks
Client Focused Trading for large institutions, pensions, hedge funds, wealthy families, and private equity for over 30 years
Ansie Monaghan
Carol Ann Fernandez
Glen Eagle
4422C Route 27
PO Box 399
Kingston, NJ 08528
(609) 631-8231
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