An Early Christmas Gift for the S&P 500?

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The Christmas holiday season is always full of miracles and surprises. At least, that’s what we’re told by television shows and their stories revolving around the wonders and joys that can happen in the final month of the calendar year.

But based on yesterday’s trading session, it appears that we could end 2020 with some much-needed gains. Here are the most important numbers you need to know about:

  • Dow Jones: +0.2%
  • S&P 500: +0.2% (an all-time closing high at 3,669.01)
  • NASDAQ: +0.1% (an all-time closing high at 12,349.37)

So what could have possibly led to these slight gains in the market?

Most likely, we are still riding on the wave of momentum brought about by the incredible monthly performance seen by all three major indices in November: +11% for the Dow Jones, +10.8% for the S&P 500, and +11.8% for the NASDAQ.

All thanks to the exciting news of progress made in the development of “more than 90% effective”COVID-19 vaccines from Pfizer, Moderna, and AstraZeneca. Say what you will about the vaccines, but they are the confidence boosters needed to give several industries a positive outlook on the immediate and long-term future.

Not to mention that negotiations for a second COVID-19 financial aid package have now resumed. We are currently sitting at $908 billion for the price of the total relief fund, which is better-than-bad news in the eyes of StoneX’s global market strategist Yousef Abbasi:

“The potential for fiscal stimulus in the lame duck session does appear to be on the rise, but any package that will be considered will likely be significantly smaller than the $1 trillion that had been talked about prior to the election.” 

To summarize, what we are seeing are two conflicting viewpoints: One where we can sustain the current momentum of positive economic growth, and one where the winter season may accelerate the continuous spread of COVID-19.

But for now, the former is winning out over the latter. For the sake of the stock market and the nation of America as a whole, it is more critical than ever to maintain a high sense of morale.

We’ve had all of 2020 to complain and sulk about all of the ways in which the pandemic has negatively affected our lives. Yet the lockdown restrictions appear to be staying put for now, so the time for grieving is over.

Going into 2021, the overarching theme will literally be making America great again… regardless of whether a President Trump or a President Biden is sitting in the White House.

What do YOU think about the news of yesterday’s stock market performance? Can we maintain positive momentum and end the last month of 2020 in the green? Reply to this newsletter and share your predictions with us!

E-Commerce Has a New Obstacle to Overcome: The United Parcel Service

A bombshell investigative report was released by The Wall Street Journal yesterday afternoon that revealed how the United Parcel Service (UPS) was deliberately placing shipping restrictions on mega-chain stores as of Monday:

“The delivery giant on Cyber Monday notified drivers across the US to stop picking up packages at six retailers, including L.L. Bean Inc., Hot Topic Inc., Newegg Inc. and Macy’s Inc…  ‘No exceptions,’ the message said.”

“…The move comes during a holiday season when retailers are increasingly dependent on delivery companies to move online orders as store traffic plummets during the coronavirus pandemic, a dynamic that has shifted power significantly.”

And if that’s not enough, have a taste of this tidbit from the report: The National Retail Federation estimated that online shopping jumped 44% over a five-day stretch including Black Friday and Cyber Monday.”

This is the first holiday season where a shipping carrier has had to actively impose limits on stores who exceed their allowance for package deliveries. However, this is completely inexcusable when you consider that they have had several MONTHS well in advance of the holidays to make adjustments for the increase in e-commerce spending.

It’s a very bad look for UPS, especially with the Christmas holiday shopping season well underway. It’s expected that people will have to make orders at an earlier time and wait far longer for deliveries to arrive, so the onus is 100% on them to do whatever it takes to accommodate the higher volume of orders.

So if you have a package that’s being delivered via UPS, expect it to arrive far later than usual!

Walmart Is Offering FREE Shipping, Regardless of Your Order Price

When you talk about the rise in e-commerce spending over the course of 2020, Amazon is the first company that comes to mind. However, for the duration of the pandemic, Walmart has been quietly working to become a serious threat to Amazon’s seemingly endless success.

Their latest announcement for customers subscribed to their “Walmart+” service states that ALL orders will have free one-day or two-day shipping, regardless of the total price of the order. Set to take place on December 4th, this over-rides the previous rule that free shipping was only available to Walmart+ subscribers if their total order was a minimum of $35.

(NOTE: According to The Motley Fool, the $35 minimum for free shipping will still apply to items such as groceries.)

Walmart may have the advantage over Amazon in terms of offering a cheaper subscription service, but they have a LONG way to go before they gain some semblance of market domination. While Walmart supposedly accounts for 6% of all online purchases in the US, Amazon is clearly the king of the e-commerce mountain at a whopping 38%.

Then again, Walmart+ is a baby at only two months old. Give it another year and we might see a completely different picture!

Christmas Holiday Spending Will SOAR but Only Because of Rich

Don’t be fooled by the ongoing COVID-19 pandemic that has financially ruined the lives of millions of Americans, or the seemingly empty retail stores. Because this Christmas holiday, sales in the US are expected to burst through the roof.

Bloomberg has spent the past two days commenting on how the ongoing lockdown restrictions will lead to a surge in the purchase of items that allow people to take full advantage of staying at home and keeping themselves entertained (or productive, however you choose to see it).

One interesting comment came from Craig Johnson, President of Customer Growth Partners. Apparently, his projection of 5.8% growth in spending for the months of November and December is looking a lot more like 7%. To put this number in perspective, 5.8% growth translates to $749 billion in spending:

“We’ve been predicting it will be a decent Christmas for months, but we didn’t realize it would be this strong… There’s an extra $1.2 trillion in people’s pockets versus a year ago. It’s like dry powder to spend for Christmas.”

It’s fantastic news for retailers who heavily rely on foot traffic for their business and have an online e-commerce setup. Why? Even though there’s a very obvious drop in foot traffic, the losses may be more than made up for by the exponential rise in online spending.

At the same time, the heightened holiday spending seems to be fueled by one particular group of people: Those who have directly benefitted from the COVID-19 pandemic in the form of remote working, either maintaining or increasing their current salaries while simultaneously saving a ton of money on everyday expenses such as dining and transportation.

This rosy picture cannot be painted for Americans who are less financially fortunate. Over 5.7 million people do not have enough food in their house to eat since late October, and the US poverty rate is projected to be 13.6% for the five final months of 2020 (compared to 10.5% in 2019).

It’s the textbook example of the K-shaped economic recovery: Those at the top benefit even more, while those at the bottom will suffer more than ever.

Nearly 33% of Small Businesses in New Jersey and New York Are STILL Closed

At the start of the COVID-19 pandemic, some small businesses had no choice but to close in order to avoid financial hardship and the eventual filing for outright bankruptcy.

Which leaves you wondering just how many of those businesses have re-opened their doors, versus how many of them are STILL closed. We now have an answer for that question in the states of New Jersey and New York, according to Opportunity Insights:

  • 31.2% of all small businesses in New Jersey have yet to reopen
  • 27.8% of all small businesses in New York have yet to reopen

Despite making up the economic backbone of America, small businesses have received the least amount of financial support and nation-wide concern. On top of the lockdowns and restrictions that effectively make their businesses inoperable, they have not received sufficient government assistance in the form of monetary funds.

To make matters worse, it appears as if the restrictions imposed upon small businesses will continue well into 2021. The COVID-19 vaccine might help relax some of these restrictions, but by that time it may already be too late.

The fact that New York City is projected to make a full economic recovery no earlier than 2025 really says it all. The remaining 48 American states will indeed suffer, but things look especially bad for New York and New Jersey.

Visa’s Newest Credit Card Offers Bitcoin as a Cash-Back Reward

If you ever wanted your credit card purchases to give you cash-back rewards in the form of Bitcoin, your wish has now come true!

Visa’s latest credit card, the “Bitcoin Rewards Visa Credit Card,” was recently announced in partnership with BlockFi, a startup in the cryptocurrency space. Set to be released in early 2021, here are the most important details you need to know about:

  • If you spend at least $3,000 within the first 3 months of opening your account, you will get a financial bonus of $250
  • 1.5% of your purchases will be compensated in the form of Bitcoin
  • The card comes with an annual fee of $200
  • You will need to open up an account on BlockFi in order to be added to the waitlist being opened in January 2021, with existing BlockFi users getting first dibs on access to the card

When asked for comment, BlockFI CEO Zac Prince had this to say:

“We’re excited to add credit cards to our suite of products and expand bitcoin’s accessibility to a broader set of consumers… This card makes it simple and risk-free for people to gain or increase exposure to a new asset class without changing their spending or investing habits.”

I’m curious to know: Would YOU use this card to build up your portfolio holdings in Bitcoin, or would you rather buy and hold Bitcoin the traditional way? Let me know which choice you would make – and why – by replying to this newsletter!

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