Market Perspective February 2, 2021

Equities shrugged off a rising dollar on Monday and rebounded from last week’s losses. Technology was the strongest sector, lifting the Nasdaq 2.55 percent. The Russell 2000 Index climbed 2.53 percent, the S&P 500 Index 1.61 percent and the Dow Jones Industrial Average 0.76 percent.

Shares of Tesla (TSLA) climbed 5.83 percent and Amazon (AMZN) 4.26 percent on Monday. That boosted SPDR Consumer Discretionary (XLY) 2.60 percent. SPDR Technology (XLK) rose 2.51 percent, SPDR Real Estate (XLRE) 2.26 percent and SPDR Communication Services (XLC) 1.87 percent.

Short-interest in GameStop (GME) reportedly fell on Monday and shares sank an even $100.00 or 30.77 percent. It’s unknown if the squeeze is over, but if it is, GME could fall another 90 percent or so, back to where it was trading before the squeeze began. Last week we sent out a sell alert on SPDR S&P Retail (XRT) because the largest holding in the fund is GameStop, a consequence solely of its incredible rally. Investors should stay away from that ETF until all the air comes out of GME.

The ISM Manufacturing PMI eased to 58.7 percent in January, down from 60.7 percent in December. Any reading above 50 signals expansion.  The ISM services PMI will be out midweek.

January’s employment report will be released on Friday. Economists project 105,000 new jobs, unemployment steady at 6.7 percent and 0.3 percent wage growth.

Big Tech and biotech will dominate a busy earnings week. Tuesday brings Amazon (AMZN), Google (GOOGL), Alibaba (BABA), Pfizer (PFE), Exxon Mobil (XOM), Amgen (AMGN), United Parcel Service (UPS) and ConocoPhillips (COP).

On Wednesday, we will receive reports from PayPal (PYPL), Qualcomm (QCOM), Biogen (BIIB), AbbVie (ABBV), Boston Scientific (BSX), eBay (EBAY) and Spotify (SPOT).

Nokia (NOK), Bristol-Myers Squibb (BMY), Merck (MRK), Ford (F) and Gilead Sciences (GILD) report on Thursday.

The week closes out with Regeneron (REGN), Illinois Tool Works (ITW) and Cardinal Health (CAH).

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