The good news for investors in equities was that the one-percent-and-change advances put all the averages close to record closing high levels. What may be troubling to some of these stock market perma-bulls is that silver, gold, and Bitcoin - all alternative currencies to the falling US dollar standard and all of which have out-performed all the major averages except the NASDAQ - were also on the move, posting solid gains, poised to go even higher.
After the New York close and overnight, gold, silver and Bitcoin all added to their Tuesday wins as stock futures searched for headlines with which to goose stock futures toward a positive open.
Taking nothing away from the tried and true investing karma of holding bits and pieces of publicly-traded companies, mutual funds, ETFs or even whole index funds, it's valuation and counter-party risk that may eventually chink the armor of traditional investment schemes. P/E ratios of some individual stocks are at what some regard as nose-bleed levels. Simply put, with an economy running on CV-19 vaccine vapors, hope for a smooth transition of power in Washington (good luck with that one!), a masked, stressed, and nutrion-deprived populace, and a media narrative reliant on lies, half-truths and censorship of factual information, investors in just about any asset class have reason enough to be a little bit cautious.
It's not like stocks other than tech companies like Facebook, Apple, Amazon, Google, and companies that have thrived under the lockdown scenario like UPS, Fedex, Target, and Wal-Mart have not performed well in 2020. The concern is that the number of positive stock stories is dwarfed by the cataclysmic collapse of other whole sectors, like airlines, hospitality, retail, and energy, marking the upside rally since the end of summer a thin one, in that a few stocks have benefitted handsomely while the rest of the market has stagnated or fallen apart.
That scenario had been evident in the initial stages of the rally off March lows, but has moderated of late, with most-shorted stocks and riskier issues now picking up the slack in the advance-decline ratios, indicating that the breadth of the rally may be finding a healthy sweet spot. From a broad overview perspective, this looks good, as stocks should during what is usually one of the best months for overall market gains, December, but, as 2020 comes to a close, investors may be thinking about tax implications, though the January Effect (From 1928 through 2018, the S&P 500 rose 62% of the time in January (56 times out of 91)) may provide comfort for the wall-of-worry weary.
From a contrarian - gold bug, silver surfer, or coin hodler - perspective, what the stock market does in relation to the alternatives is paramount. While the NASDAQ has performed admirably, up more than 37% year-to-date, the Dow and S&P are pikers by comparison, up roughly five and 14 percent. Gold (+17%), silver (+33%) and Bitcoin, up a whopping 270% and still rising, appear to be on course to take top honors for 2020.
What the end of the year and 2021 bring for investors is all loaded in Santa's bag, largely dependent on confidence (or lack thereof), geo-political events, and conformity to the "new normal" foisted upon the planet by CV-19 and the "Great Reset" memes.
It's a real grab-bag of assets and asset classes competing over a three or four dimensional chessboard. Not all asset classes can gain or lose at the same time, though this coincidence happens more often than one would normally expect.
And, just like that, at 8:45 am ET, Bitcoin rocketed to a new all-time high at $20,420.00.
Hold onto your hats and buckle up those seatbelts. The final trading days of the year may be the most interesting of all.
Happy Holidays!
At the Close, Tuesday, December 15, 2020:
Dow: 30,199.31, +337.76 (+1.13)
NASDAQ: 12,595.06, +155.02 (+1.25%)
S&P 500: 3,694.62, +47.13 (+1.29%)
NYSE: 14,402.32, +187.39 (+1.32%)
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