1 Wall Street Journal. December 14, 2020. https://www.wsj.com/articles/steel-orders-jump-after-covid-19-slowdown-11607947200
2 Zacks Investment Management reserves the right to amend the terms or rescind the free Market Strategy Report offer at any time and for any reason at its discretion.
3 Wall Street Journal. December 16, 2020. https://www.wsj.com/articles/states-sue-google-over-digital-ad-practices-11608146817?mod=hp_lead_pos1
4 Wall Street Journal. December 17, 2020. https://www.wsj.com/articles/lawmakers-race-to-finish-900-billion-covid-19-aid-package-11608217973?mod=hp_lead_pos2
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5 Wall Street Journal. December 16, 2020. https://www.wsj.com/articles/us-economy-november-retail-sales-coronavirus-recovery-11608059514?mod=hp_lead_pos4
6 Zacks Investment Management reserves the right to amend the terms or rescind the free Market Strategy Report offer at any time and for any reason at its discretion.
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Steel Demand Rises, Stimulus Breakthrough, Retail Pulls Back
In today’s Steady Investor, we look at key factors that we believe are currently impacting the market, such as:
- Steel prices surge as demand picks up
- Current events indicate that headwinds against Big Tech are real
- Fiscal stimulus breakthrough
- Retail sales pull back in November
Steel Prices Surge as Demand Picks Up – In the spring, steelmakers halted domestic production, shuttered plants, and stopped ordering steel to build up inventories. No one was really sure how long pandemic-induced plummets in demand would last. Now, steelmakers are struggling to keep up with new orders from U.S. manufacturers, and steel prices are surging as a result of supply and demand imbalances. The benchmark price for hot-rolled sheet steel has doubled to $900 a ton (from around $450 in August), and lead times for sheet steel orders keep lengthening – 10 weeks today, versus 4 weeks over the summer. By some accounts in the steel industry, the supply chain has collapsed, which in the short-term may bizarrely be a good sign for the greater U.S. economy. It shows that auto, appliance, and other machinery manufacturers are rebounding in lockstep, with some seemingly panic-buying steel to make sure they have ample inventory to meet future demand. Even with this strong rebound, steel utilization and production remain lower than twelve months ago, with steel production down 13% from last December and only 71% of U.S. production capacity being used (compared to 80% at the same time last year).1
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How to Navigate Your Investment Goals at the Start of a New Year!
Many investors are worried about the economic recovery and what 2021 will bring for the market. The current vaccine has recently been approved, and with it a lot can go right, but a lot can also go wrong – Will it really be effective? How long will it take? Will enough Americans take it?
In this report, we take a look at some of the most critical aspects of life-after-the-pandemic such as how earnings will rebound. You will see a glimpse of what we’re forecasting ahead. We will look at:
- What does Tesla being added to the S&P 500 mean for investors?
- A look at major companies in the fight against Covid-19
- What are expectations for U.S returns in 2021?
Download Our Just Released, “December Market Strategy Guide”2
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Facebook Was Dealt an Antitrust Lawsuit. Now Google is Being Sued – On Wednesday, 10 states joined Texas in a lawsuit accusing Google of “running an illegal digital-advertising monopoly” where it enlisted Facebook to help rig advertisement auctions. In a twist only the Big Tech industry could produce, the lawsuit specifies that the code names used by Google and Facebook to coordinate their efforts were Star Wars characters. The lawsuit accuses Google of building a monopolistic online advertising vertical, where the search giant owns tools at every link of the chain between online publishers and advertisers. Just two days later, a coalition of 38 states filed a lawsuit against Google alleging the company of maintaining a monopoly over the internet-search market, using anticompetitive contracts and business practices to thwart competition. Some readers may recall that Google is already in a lawsuit with the U.S. Justice Department, filed on October 20th and also targeting its search business. Part of the reason there are three lawsuits is simple division of labor – the cases overlap in some areas but the overall effort is so large that it had to be broken up. The lawsuits also represent perhaps the most remarkable bi-partisan cooperation against one of the most successful companies in America, signaling that the headwinds against Big Tech are real.3
Fiscal Stimulus Breakthrough – Lawmakers in D.C. appear closer than ever to passing more fiscal stimulus, with $900 billion seeming to be the agreed upon figure. The stimulus is said to include helicopter money – checks or deposits sent directly to American households – and $300 in ‘extra’ per week unemployment benefits. The bill also reportedly includes an emergency rental assistance program, funding for small businesses, schools, broadband, and importantly vaccine distribution. In the realm of compromise, Republicans had to give up a provision protecting businesses from liability lawsuits, and Democrats had to give up funding for states and municipalities.4
Retail Sales Pull Back in November – A Warning Sign? U.S. consumers gained momentum in the fall, with strong spending figures posted in August and September. The numbers moderating in October and November, however, signal that rising cases and restrictions may have caused consumers to pull back. U.S. retail sales fell a seasonally adjusted -1.1% in November from October, with drops in restaurants, department stores, and vehicle dealerships leading the way down. A fiscal stimulus that includes direct payments may give a boost heading into winter.5
What to Expect in 2021 – As we all know, 2021 is around the corner and many investors are worried about the economic recovery and what the new year will bring for the market. In our just-released December Market Strategy Report, we take a look at companies working on the vaccine and antibody medicines. You will see our analysis on the major companies involved, with Zacks stock ratings included in our commentary.
We will look at:
- What does Tesla being added to the S&P 500 mean for investors?
- A look at major companies in the fight against Covid-19
- What are expectations for U.S returns in 2021?
This
report dives into what a vaccine could mean for economic recovery. If you have
$500,000 or more to invest and want to learn more, click on the link below to
get your free report today!