Here Are The Biggest Stock Market Winners And Losers In New Massive Stimulus Plan

[Option Beast]( 01/16/2021   |   [View in browser]( --------------------------------------------------------------- [Here Are The Biggest Stock Market Winners And Losers In New Massive Stimulus Plan]( President-elect Joe Biden announced a $1.9 trillion stimulus package and the stock market fell. What the heck is going on? You might have expected the S&P 500 Index SPX, Dow Jones Industrial Average, and Nasdaq to rise on the news. The package might be too much of a good thing, and the smart money - professional investors - knows it. Of course, no one wants to begrudge anyone who needs personal assistance to pay the bills because of hardships not of their own doing, meaning the Covid-19 crisis. That would be heartless. But investors also consider the big picture. In this sense, the stimulus may eventually create more problems than politicians are bargaining for. It definitely creates winners and losers in the stock market and the economy, and the potential harm could touch almost everyone - but particularly the less well-off. This isn't a political comment. I am apolitical. It's just basic economics. To understand what's going on, you need to be aware of how absolutely massive the stimulus programs are. So, forgive me for sharing some all-important numbers. I'll keep it brief. [More...]( SPONSORED CONTENT [11-Hour Options: The Ultimate Income Trading System [Free eBook]]( In this eBook, Dave shows you exactly how he, and other traders, enjoy a 94.8% win-rate over the last 727 trades by focusing on high-probability trades. You're typically only in the trade for about 11 hours. And the goal is to make 4%, 5% or 6% on each trade (average has been 5.3%). 5.3% may not seem like a lot. But when you win 94.8% of the time, it adds up quickly! [CLICK HERE for instant access.]( [REFLECTIONS... Optimism Reigns by David Sager](#) Emotionally, it was a bruising week. Rioters stormed the Capitol Building and disrupted the certification of the U.S. presidential result. The Democrats won both Senate seats up for grabs in Georgia, giving them control with a one vote margin (by the vice president). The assault on the Capitol signaled some questions about the state of U.S democracy, but it certainly did nothing to impact economic forecasts or earnings expectations, on the contrary, markets functioned smoothly with unquestionable accountability. Even the prospects of Dems 'trifecta' hasn't slowed or unimpaired investors moods. Indeed the indexes rose through assault on the republic ending the week with positive average increases. Add in December's job losses that were caused by massive drops in hospitality and leisure, almost entirely because of renewed Covid 19 lockdowns. When the coronavirus starts to subside, those jobs should begin to return. All week the market was bullishly confident. The S&P 500 rose 1.8% to 3324.68, while the Dow Jones Industrial Average advanced 491.49 points or 1.6%, to 31,097.97, and the Nasdaq Composite gained 2.4% to 13,201.98. All three indexes closed Friday at record highs. The small cap Russell 2000, up 5.9% to 2091.66, left them (indexes) all in the 'dust' by notching its best start to a year since 1987! With the massive undertaking of inoculations, which should allow people to get out of their homes and 'back-to-the-office' at some point in 2021, economic growth should surge. People will also have less time to trade once they return to work, and dollars might be spent on restaurants, concerts, and finally vacations. "We'll know if it's a bubble by the end-Q1," writes Michael Hartnett, chief investment strategist at BoFA. A Bit Of Bitcoin.....The Bitcoin rally said to be the 'mother of all bubbles,' says BofA. Bitcoin prices have doubled in less than a month to more than $40,000, settling back to $37,701.30 late Saturday, (1-9-2021). And while cryptocurrency 'bulls' will argue that this stunning surge is justified, some on Wall Street are warning that this all won't end well. "This recent rally might be a case of speculation mania," says Michael Hartnett, chief investment strategist at Bank of America. He points out that a surge of roughly 1000% since the beginning of 2019, is by far the most massive gain seen in the past few decades. That includes a surge of 400%, in the late seventies of gold, and the Japanese stocks in the late 1980's, and the tremendous market in Thailand, 1985-94, and the U.S. housing market prices in the mid-2000's. These sectors enjoyed triple digit percentage gains before crashing down to earth. Owning Bitcoin as an inflation hedge against the weakened dollar has lost some interest as the dollar has strengthened. The frenzy in buying patterns for Bitcoin suggests a desire by many investors to 'want to participate,' and 'jump on the bandwagon.' Another analyst, Mike O'Rourke chief strategist with Jones Trading said, "The Bitcoin chasers here are not protecting themselves against a dollar meltdown, they are simply paying twice as much for an asset that they were at Thanksgiving." Still the Bitcoin faithful remain convinced that prices can keep climbing, considering the euphoria of this glittering investment. Paypal, Square, and the heavy investors including Paul Tudor Jones and Stanley Druckenmiller, bellwethers in Bitcoin stand firm in their convictions. The Paycheck Protection Program, (PPP), of forgivable loans will relaunch on Monday, the Trump Administration said, as the federal government extends efforts to preserve jobs and help businesses weather the coronavirus pandemic and related lockdowns. The program administered by the Small Business Administration and Treasury Department, will initially reopen for first-time borrowers, with second-time borrowers eligible to apply on Wednesday. Congress last month authorized $284 billion to provide forgivable loans to small businesses as part of its broader $900 billion relief bill, recently passed. RUMBLINGS ON THE STREET President-elect Joe Biden, on the attack on the Capitol, Barron's "This is not dissent. It's disorder. It's chaos. It borders on sedition and it must end now." Michael Kagan, a portfolio manager with ClearBridge Investments, Barron's "Regulation was so severe under Obama that I think there's a feeling it went too far. This is going to be a government led by moderates." George Maris, co-head of equities at Janus Henderson, Barron's "The deregulatory impact of the past four years was greater than the tax cuts," says Mr. Maris. Economists estimate that deregulation fueled more than $100 billion in economic activity annually, he adds. "Companies felt extraordinary relief from a less antagonistic relationship with Washington." George Senydk, chief investment strategist at Wolfe Research, Barron's "The threshold for another stimulus bill is low, but the bigger grand plans will take longer." The average tax-reform bill takes 15 months after a new president is sworn in--plenty of time for markets to keep rallying and adjust. "Stocks are in a bubble," Senyek says, "but we're not going to fight it." [Blue-Collar Boom: How China Bounced Back From the Virus]( The smell, salty and pungent, wafts through the freshly paved streets near the gleaming new factory. The factory is owned by a company called Laoganma, which makes a piquant chili-and-soybean sauce famous across China for its power to set mouths watering. In a time of global pandemic, when the jobs of working people around the world hang in the balance, the factory's scents signal opportunity. Since it opened in March, when China was still in the grip of Covid-19, the factory has struggled to find enough machinery operators or quality control technicians. Now workers are flocking to Changmingzhen, a once-quiet farming town ringed with green mountains and rice paddies, from which young people once fled for better jobs elsewhere. Changmingzhen stands as a testament to China's stunning post-coronavirus revival - one powered by the callused hands of the country's factory and construction workers. With few exceptions, the rest of the world remains in a pandemic-driven malaise. But when China reports economic figures for 2020 on Monday, they are expected to show its economy grew despite losing early weeks to the lockdown. [Article continues...]( [What Is Universal Basic Income?]( DURING THE 2020 Democratic presidential primary race, candidate Andrew Yang proposed sending $1,000 each month to all U.S. citizens age 18 and older. Dubbed a Freedom Dividend, his idea garnered him devoted supporters although the concept itself isn't new. The Freedom Dividend is a form of universal basic income, commonly called UBI. The idea of UBI has been promoted as far back as 1795 in the writings of Thomas Paine. However, with the COVID-19 pandemic leaving millions unemployed for much of 2020, the idea of guaranteed income has become more appealing in recent times. Those who support UBI say it's an easy way to distribute aid to vulnerable populations. Others worry such a system would be costly and discourage workers from finding jobs. Opinions vary, but several countries are already experimenting with UBI systems and reportedly finding success. [Click to continue reading this article...]( [12 IRS Audit Red Flags for Retirees]( You may be wondering about your odds of an IRS audit. Most people can breathe easy. The vast majority of individual returns escape the IRS audit machine. In 2019, the IRS audited only 0.4% of all individual tax returns, and 80% of these exams were conducted by mail, meaning most taxpayers never met with an IRS agent in person. Also expect the audit rate to drop for 2020 because the coronavirus pandemic has dampened the IRS's enforcement efforts. As a result, the odds that your return will be picked for review are generally pretty low. That said, your chances of being audited or otherwise hearing from the IRS escalate depending on various factors. Math errors may draw IRS inquiry (although they'll rarely lead to a full-blown exam). Claiming certain tax deductions is something else that can trigger a closer look at your return. Other actions or activities can boost the odds of an audit, too. So, to be on the safe side, retirees should check out these 12 red flags that could increase the chances that the IRS will give your return special, and probably unwelcome, attention. [More here...]( SPONSORED CONTENT [[Exposed] What Pro Option Traders Don't Want You To Know...]( The pros want you to believe that options trading has to be risky. But a careful and caution engineer figured out a way nearly anyone can trade options SAFELY. Free guide reveals the step by step system... [Click here to get this FREE guide before it's too late.]( --------------------------------------------------------------- [Option Beast]( Send this to a Friend. [Click here.]( | Not a Subscriber Yet? [Click here.]( All content © 2021 Option Beast Neptune Ave, 300 Main Street #711, Madison, NJ 07940 USA Welcome to Option Beast, an e-mail service that replaces many of our previous alerts. We hope you enjoy it. If you do not wish to receive this email service, please [click here to unsubscribe](. 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