The Recession May Be Over - Technically

[Option Beast]( 01/30/2021   |   [View in browser]( --------------------------------------------------------------- [The Recession May Be Over - Technically]( The pain in the U.S. economy remains deep with more than 15 million Americans on unemployment, long lines at food banks, and restaurants, shops and entertainment venues fighting for survival. But this recession might be over - at least technically. The textbook definition of a recession is the period between the economy's last peak and trough. Think of it like a hiker descending a mountain after reaching a summit. Once the hiker reaches the bottom again, the hike is over, even if it's a long walk with blistered feet to the car or a long time before the hiker climbs another mountain again. It's abundantly clear the U.S. economy took a big plunge in March and April of 2020. The coronavirus crisis required many parts of the economy to shutter to minimize human contact to slow the virus's spread. Economic activity declined so severely that the National Bureau of Economic Research's Business Cycle Dating Committee, which officially declares recessions, sprung into action: February 2020 was the peak, and the U.S. was in a recession. That declaration process normally takes months. This time, it took 15 weeks, the fastest ever. The committee hasn't declared an official end to the recession yet, but one of its eight members says the U.S. recession is technically over. [More...]( SPONSORED CONTENT [You Don't Need To Trade A Lot To Be Consistently Profitable]( Did you know there's a certain type of trade that appears almost every trading day between 9:30-10:45am? And if you know how to spot it -- and when to enter & exit -- you could walk away with $300 to $1,000 per contract each time. This is so simple, I don't see why anyone wouldn't take the time to master this. And this free guide shows you how. [CLICK HERE for instant access.]( [REFLECTIONS... Accepting the Metamorphosis by David Sager](#) U.S. stocks stumbled on Friday, but still managed to post weekly gains, lifted up by some strong quarterly reports. Investors were encouraged by a solid start to the corporate earnings season. The resting techs awakened finally, jumping the tech heavy Nasdaq Composite 4.2% to 13,543, its biggest gain since the week ended November 6, last year. The tired techs: credit Netflix, which soared 13% last week, after adding far more subscribers than Wall Street had been predicting, awoke and showed an aggressive reason for helping the Nasdaq surge. But it wasn't the only FAANG (FAANG is an acronym referring to the stocks of the five most popular and best performing American technology companies) on the move, with that group averaging a gain of more than 8%. The Composite was also helped by general optimism by all the rest, now 'back in fashion.' Add in the fact that the 10 year Treasury yields stopped going up. Rising yields point to a stronger economy and make fast-growing companies look less attractive on a valuation basis. However Fed Chairman Jay Powell and his colleagues had to 'tamp down' fears of an early end to the bond buying this month so we will certainly expect him not to 'rock-the-boat.' If anything, he will promise to remain on hold (interest rates) for as long as the economy needs it. 'Steady Eddy' Jerome Powell has certainly been a heavy anchor this past 10 months, always ready to support the government's call for any financial needs. As noted earlier the Nasdaq finished off the week very strong, jumping 4.2%. The Dow Jones Industrial Average closed at 30,996.88, or 0.6%, up 182 points for the week, while the S&P 500 rose 1.9% to 3841.47. Many analysts believe the market has potential to keep climbing as long as earnings continue to show that companies are weathering the coronavirus pandemic. Next week, several technology-driven companies are set to report results, with the majority, hinting very positive numbers. Lumber prices more than doubled last year, to record highs, but the rally has faded somewhat. With the value of the commodity down sharply in the new year, early indicators point to a slow boom in home building. "The flight to homeownership and the reallocation of discretionary money toward home-improvement projects" in the wake of the Covid 19 pandemic contributed to the 2020 rally, says Greg Kuta, president of lumber broker Westline Capital Strategies. "The perfect storm allowed demand to overwhelm housing (as well as) lumber supply in 2020. Those vaccinated against Covid-19 might move back to cities, where steel is the dominate choice for construction, however as people look to build additions to their homes (as occurred much more during lockdowns, March - December) for a better teleworking environment, demand for raw lumber will hopefully improve, as will the financial condition of mills and retail outlets. Prices for corn, soybeans and wheat have soared to their highest levels in more than six years, as dry conditions and strong export demand from China exhaust U.S. stockpiles. These rising commodity prices are rippling through the food chain, driving sharp increases in farm income, and all related businesses: grain elevators, equipment manufacturers, fertilizer companies and traders. At the same time, these commodity increases will drive food prices up, with consumers paying more for all food-stuff. It is a dramatic reversal from recent years in which bumper crops and harvests swelled U.S. stockpiles, pushing prices lower and slashing farmers incomes. "There is euphoria over (grain) prices," said Illonois farmer David Brown, on a trip to his local grain elevator to sell soybeans, "There's a feeling out there saying 'game on, we're back.'" A BIT ON BITCOIN.....Bitcoin has fallen 9% over the past 24 hours and more than 23% since peaking at $41,962.30 on January 7. The price, according to some 'big' players is showing some 'vulnerability' after a great month, and could slide a bit more into the high twenties, predicted analyst Craig Erlam. The drop has continued even after 'big' financial players 'warm- up' to Bitcoin. The world's largest asset manager, Blackrock (ticker, BLK) is now allowing two of its funds to invest in Bitcoin, according to their prospectus, filed on Wednesday with the SEC. Janet Yellon, the new Treasury Secretary did mention risks of crime and fraud, appearing to not fully accept the cryptocurrency as an investment or as currency. Bitcoin appears to be weaker when it's daytime in Asia, and stronger when it's daytime in the U.S. That reflects a divide in enthusiasm in two parts of the world-both critical to Bitcoin pricing. One of Biden's trusted confidants, Gary Gensler, his choice for SEC chairman was hailed by 'crypto flag wavers' as great news. He once taught a class at MIT, in the fall 2018, and has testified before congress. When asked, what's behind this (Bitcoin), he responded, "There's really nothing behind gold either...Bitcoin is a modern form of digital gold." Interesting comments from an interesting fellow nominated to chair the SEC. RUMBLINGS ON THE STREET Paul Ashworth, economist with Capital Economics, Barron's "(We) expect Chair, Jerome Powell will use his post-meeting press conference to reinforce the message that the Fed would be tightening policy 'no time soon. The Fed clearly views its short-term tightening several years ago as a mistake and is much more likely to err on the side of caution this time around- to avoid another 'taper tantrum' in the bond markets." Lori Calvasina, chief U.S. Equity Strategist at RBC Capital Markets, Barron's "If the market follows the historical pattern, it should pull back by spring--but that will be a buying opportunity. My assumption is that we'll see a continuation of the recovery rather than a double-dip recession," Calvasina says. "If you think that you have to buy the dip." John Kolovos, chief technical strategist at Macro Risk Advisors, Barron's "Owning some of these left-behind companies could be the way to add some ballast to a portfolio in case of a drop," Kolovos says. "Buy some utilities, buy some staples," he explains. "Those are the most oversold in an environment of market froth and excess. Just be sure to sell them again once the correction is over." Sonall Desa, CIO and portfolio manager Franklin Templeton Fixed Income, Barron's "I'm not a gold specialist, but I think gold could easily go up to $2,200 (once). I'm not saying it will happen in the next month or two, but production of gold is quite low right now. I prefer gold to Bitcoin. Gold is a time honored store of value." Mario Gambelli, Chairman and CEO, of Gamco Investors, Barron's "Madison Square Garden Sports owns the New York Knicks and the New York Rangers. At some point, Jimmy (Dolan, MSGS executive chairman) has to figure out what he wants to do with MSGS. We believe there would be (and are) buyers for the New York Knicks." Ownership of sports franchises is becoming a reality for the 'sports minded investor.' [9 Stocks Made Investors Up To 928% Richer During A Wild January]( Talk about a crazy January for stocks: the GameStop (GME) short squeeze, new highs for the S&P 500 and soaring small caps. And there were some wild ways to make lots of money - fast. Nine stocks in the S&P 1500 index, including mostly small caps like consumer discretionary GameStop and National Beverage (FIZZ) plus healthcare Fulgent Genetics (FLGT), soared 65% or more in January, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. The top stock in January? Short-squeezed GameStop soared 928%. And while the S&P 1500 includes the large-cap S&P 500, like GameStop, every top stock was small or mid-size. Some think the small-cap rally is getting overdone. But it's hard to bail on an asset class that's working so much better than the S&P 500. [Article continues...]( [Married Couples: Is It Better to File Taxes Jointly or Separately?]( MARRIED COUPLES HAVE A choice to make at tax time: They can file their income-tax returns jointly or separately. Most married people automatically file joint returns, but there are some situations where filing separately can be better. "Married filing separately is an uncommon filing status, however it can be beneficial for certain legal and strategic reasons," says James A.J. Revels, a CPA and partner at KPMG in Philadelphia. Here are some reasons to file jointly or separately... [Click to continue reading this article...]( [Will Social Security Still Be There If I Wait To Claim It?]( If you've been planning to wait until age 70 to claim your Social Security retirement benefits, but are worried your full benefit won't be there when you get there, you're not alone. There's been no shortage of hand-wringing about the health of the federally run retirement program, and you've surely heard projections that benefits might be cut by 20% or more in 2032. Does that mean you should take benefits earlier than planned to lock in your payout? The Congressional Budget Office has projected future cuts to Social Security retirement benefits that may panic some people. Yet, the labor market rebound has been stronger than CBO anticipated, CBO director Phillip L. Swagel said in December. Benefit cuts are not inevitable. With a new administration and Congress in place, Social Security legislation could find its way to lawmakers in the next year or two. "The idea that we can't afford" to fix Social Security to avoid cuts "isn't accurate," said Altman, also the author of several books including The Truth About Social Security. [More here...]( SPONSORED CONTENT [This Trading Book Sells For $19.95 On Amazon. 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