The S&P 500, NASDAQ, and Russel 2000 all hit record highs

US stocks rose on Thursday for the 4th day in a row. Investors are positive about the quarterly reports of corporations and are optimistic about the publication of the labor market report for January (on Friday). The number of applications for US unemployment benefits fell to the lowest level since November, signaling a possible slowdown in the rate of employment decline, as the spread of Covid-19 in the US gradually wanes.

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After the end of regular trading in the extended session, shares of Peloton Interactive fell, as the company can not meet all the demand for Internet-connected simulators, and this will negatively affect its profits in the future. Ford Motor shares rose as the automaker's profit in the reporting quarter was higher than analysts ' estimates.

Dow Jones +1.1% to 31055.9 p. (from the beginning of the year +1.5%),
S&P 500 +1.1% to 3,871. 74 p. (since the beginning of the year +3.1%),
NASDAQ +1.2% to 13,777. 7 p .( from the beginning of the year +6.9%),
Russel 2000 +2% to 2202.4 p. (since the beginning of the year +11.5%).

GameStop shares fell 42% to $53.50 as an army of retail investors shifted their Reddit-coordinated focus to biotech companies Anadex Life Sciences (+43.64% to $14.91) and Cassava Sciences (-28% to $63.43). At some point, the price growth for the Anadex was 364% since the beginning of February, and for the Cassava securities +545% in just 4 trading days of the current month.
At the end of Tuesday, the S&P 500 index was trading at a ratio of 30.6 to earnings for the past year and at a ratio of 22.6 to the forecast earnings of its member companies for the coming year.

Of the 505 shares in the index, 390 rose and 114 lost value.

For every share that fell in price, there were more than three that added in value.
Apple shares contributed the most to the growth of the index (+2.6% to $137.4), as well as the largest contribution to the growth of the IT sector. The company may soon announce a cooperation agreement with Hyundai-Kia to create an Apple Car electric car. Production can be carried out at the Kia plant located in the United States.

"Rumors about such cooperation appeared a couple of weeks ago. Now this has become more and more insistent in various media outlets. Perhaps an official announcement will be made in the near future. Working with a major automaker would allow Apple to enter the electric car market relatively quickly. Apple would be responsible for building the computing hardware and software to create an unmanned version that could be used as a robotaxi, as an option.

Under a smooth cooperation scenario, production could start in 2024, but this is only a rough forecast. In the meantime, it is better to wait for official news from the companies, " said Alexey Kornilov, a leading analyst at Otkritie Broker on the international stock market.

We have a current investment idea for Apple, the target implies $145, the growth potential from the current price of 5.5%.

Align Technology shares showed the most positive dynamics among the index components (+12.6% to $615.2). In the course of trading was formed absolute maximum paper at $634,46. A leading developer of innovative technologies in the field of dentistry that promotes market aligners "Invisalign" (invisible system for straightening teeth), issued a strong report on the results of the 4th quarter. Net profit +28% YoY to $834.5 million, with analysts ' consensus forecast of $783.2 million.

Shipments of Invisilines +14% QoQ and +37% YoY to 568 thousand units. Adjusted earnings per share of $2.61 with a forecast of $2.11. If the growth in the supply of Invisiline airliners in Q3 (+28% yoy) could be explained by deferred demand after the removal, as well as the scaling effect, then the significant growth in Q4 reflects the presence of growth potential in the global geography of deliveries.

10 of the 11 sectors of the S&P 500 index showed growth.

The IT sector contributed the most to the increase in the index (+1.5%) and reached a 52-week high. Qualcomm shares (-8.8%) put the most pressure on the sector and led the decline, as the company's revenue is limited by a shortage in the semiconductor market, and the situation is not expected to improve until the second half of the year.

PayPal shares were the leaders of growth in the sector. The securities rose by 7.4% to $270.43 on Thursday and reached a new record of $274.94 during the session. This was a reaction to the quarterly report published before the start of trading, in which the payment system reported a profit above forecasts due to the installment payment system and the added ability for users to buy, sell and store cryptocurrency in PayPal wallets.

The financial sector showed the maximum growth (+2.3%). JPMorgan shares (+2.3%) are the biggest contributor to the sector's growth. Allstate shares (-1.7%) put the most pressure on the sector and became the leaders of the decline.

The materials sector was the only one to end the day with a drop (-0.5%). DuPont de Nemours shares (+2.7%) are the biggest contributor to the sector's growth.

Air Prod Shares & Chem (-7.2%) exerted the most pressure on the sector after the release of the report for the 1st fiscal quarter, according to which adjusted earnings per share amounted to $2.12-below the consensus forecast of analysts of $2.18. Sales increased by 5.3% yoy to $2.38 billion, with forecasts of $2.34 billion. But adjusted Ebitda of $932 million fell short of expectations of $956 million.

International Paper shares (-7.6%) were the leaders of the decline in the sector also due to the publication of the results of operations in the 4th quarter of 2020. Adjusted earnings per share were 75 cents, compared with Wall Street's forecast of 81 cents. At the same time, net sales fell by 4.7% YoY to $5.24 billion, with a forecast of $5.30 billion.
Other reports
Shares of Boston Scientific rose 3.5% to $38.76. The company reported results for the 4th quarter and outlined a forecast for 2021. Adjusted earnings per share in the fourth quarter were $0.23, up from $0.46 a year earlier. Revenue fell 6.8% to $2.71 billion. In 2021, management forecasts earnings per share growth of about 60% to $1.50-$1.60. Revenue growth in 2021 is expected to be in the range of 13% -19%.

"Boston Scientific makes medical devices for performing operations. Because of Covid, the number of operations decreased as hospitals were more busy treating Covid patients. There was a deferred demand for operations. 2021 could be a year of recovery if the fight against the pandemic goes ahead as planned. There are prerequisites for this. Vaccination of the population is becoming more widespread. Therefore, the management forecast also reflects positive expectations. Given the positive dynamics in the forecasts for 2021, we see an opportunity to slightly increase the target price from $39.5 to $42 based on the projected earnings per share of $1.55 and a P/E multiplier of 27x. We maintain our rating at the level of "buy", - said Alexey Kornilov.

Twitter punished for blocking Trump's account.

The external background before the start of trading in Russia is positive. Oil and industrial metals are becoming more expensive. Asian indices are mostly trading in the black. The growth of US Treasury yields in the market is perceived as a temporary phenomenon.



During the day, the situation may change significantly, as numerous speeches of the Fed representatives are scheduled for Tuesday. In general, the strategy of betting against money remains the main one in the markets and deltamarket. For the Russian investor today, it is worth paying attention to the final estimate of inflation for December.

The Board of Directors of LUKOIL will review the results for 2020 and announce plans for the new year. The Moscow Exchange will report trading volumes for December. MMK shares will be traded on the last day with a dividend of 2,391 rubles per paper.

The financial sector remains a growth area.

At the end of trading on January 11, the Mosbirzhi index rose by 0.8% to 3,482. 48 p., while the RTS remained at 1,466. 56 p. During the day, the MOSBIRZHI index rose to the level of 3516.9 points, which is a historical high. The external background did not contribute to growth, but there were internal corporate news that could distract investors ' attention from the negative. The volume of transactions on the main section of the Moscow Exchange amounted to 143.292 billion rubles.

Three sectors closed the day in the red, and five in the black.

The strongest growth was shown by financial (+1.4%), but telecommunications declined by 0.54%. Metals and mining were also in the red (-0.27%), which was quite similar to the dynamics on European markets. According to Mikhail Shulgin, Head of Global Research at Otkritie Broker: "Technically, the Russian market looks very overbought at the moment. Relative strength index (RSI with a period of 14 days rose to almost 80 points).

The indicator was last higher in January 2020, just before the coronavirus became the reason for the correction, which turned into a collapse. We do not rule out that news during the corporate reporting season or rumors about new sanctions may soon become a reason for a market correction." Similar expectations are increasingly heard in relation to foreign markets, which not only passed the period of the Christmas rally, but also very strongly entered the new year.

The main providers of positive news were financial organizations.

TCS Group (+1.5%) plans to change the capital structure, which will reduce the share of Oleg Tinkov from 84% to 35%. Sberbank rose by 1.84% on the news about the interest in buying the electronics seller Citylink, which will contribute to the expansion of the corporation's ecosystem. The leader of the day was RusHydro shares (+3.69%). According to the business plan, RusHydro expects to increase its net profit under IFRS by 43% to RUB 47.86 billion in 2021. Revenue in 2021 should be 456.6 billion rubles, EBITDA-107.39 billion rubles. At the same time, the debt-to-EBITDA ratio will reach 2.4 x.

According to Alexey Pavlov, chief analyst for the Russian market at Otkritie Broker: "When drawing up a business plan, management traditionally follows a conservative scenario, and therefore the absolute value of profit on paper and in life can vary greatly. In our opinion, the dynamics are fundamentally important here, as well as another confirmation of the fact that at least in the next two years the company is not expected to have large paper write-offs, which for many years have greatly damaged RusHydro's consolidated net profit.

And this is important, because 50% of the profit under IFRS goes to dividends." RusAl (+2.68%), Sistema (+2.25%) and Sistema (+2.25%) also showed significant growth in the Moscow Exchange index. Mail.ru Group (+1.98%). NLMK (-2.99%), Petropavlovsk (-2.15%), Severstal (-1.94%) and Tatneft (-1.12%) were the weakest.

The ruble is weak along with other commodity currencies

The ruble showed weakness during the day, reaching 75.0 per dollar and 91.11 per euro at the moment. It did this together with other commodity currencies like AUD and NZD, which lost more than 0.7% against the US dollar in the evening. The dollar index eased slightly in the afternoon, but was still up 0.35%. The concern is the growth of yields on US Treasury bonds. In particular, the yield on 10-year securities has already increased to 1.13%.

This is due to the statements of the Vice-Chairman of the Federal Reserve Richard Clorida, who noted the lack of immediate plans to increase quantitative programs. On the other hand, this situation may be temporary. The Fed has repeatedly hinted that there should be fiscal measures first, and then the Fed will have its say. The ruble is also negatively affected by the uncertainty of the future American foreign policy. The democratic consensus in Washington hints that not only economic measures, but also any actions in the foreign policy direction are waiting for quick approval. By Monday evening, the dollar was up 0.68% at 74.66 and the euro was up 0.22% at 90.80.

Twitter punished for blocking Trump's account

US indices started the new week with a fall. In the market environment, there are opinions that stocks have risen too far and too fast. In fact, this growth is largely supported only by the Fed's incentives and promises to keep the rate near zero. The political situation also does not add to the optimism. Democrats in the House of Representatives have initiated impeachment proceedings for Donald Trump, although his term as president remains just over a week away. Of course, the markets are waiting for statements about new stimulus programs from President-elect Joe Biden, but the ones already adopted could only keep the economy from collapsing. Joe Biden himself has received a second dose of the coronavirus vaccine, and the FBI is warning of future armed protests. However, it is unlikely that anything is already able to prevent the inauguration of a new president.

Behind the political veil, there are very strong movements in the market.

Tesla shares fell 7.82%. The day before, we wrote that the share price per profit indicator exceeds 1700. Moreover, the share price index for cash flow is close to 90, which can hardly be justified by huge hopes. In any case, the electric car market may be very competitive. Apple (-2.32%), according to information in various media, is negotiating with companies such as Daimler, Hyundai Motors, etc. about the creation of an alliance for the production of electric vehicles and the development of autopilot technologies. In the securities of Twitter, a drop of 6.41% after the company blocked the account of Donald Trump, which is subscribed to by almost 89 million people. Boeing shares fell by 1.48% on the news of another plane crash, but this time the B737-500 in Indonesia. The biggest declines were in the durable goods (-1.89%), real estate (-1.66%) and communications (-1.76%) sectors. The growth was best reflected in the energy sector (+1.62%). In the S&P 500, Eli Lilly and Co. (+11.74%), Biogen Inc. (+5.93%) and Walgreens Boots Alliance Inc. (+5.51%) were the strongest performers. The leaders among outsiders were Tesla Inc. (-7.82%), Twitter Inc. (-6.41%) and DexCom Inc. (-4.5%).

At the end of the day:

DOW JONES 3,1008. 69 p. (-0.29%),

NASDAQ - 13036.43 p. (-1.25%),

S&P 500 - 3799.61 p. (-0.66%).

Quarantine is China is not afraid
Asian markets are also experiencing post-holiday enlightenment. We noted that the South Korean KOSPI rose by 10% in the first week, but on Monday it lost 1%. At the auction on Tuesday, the correction only intensified. In Japan, on the contrary, the market reacted to the weakening of the yen. If the yen spent last week closer to the value of 103 per dollar, then this week it is trading around 104 per US currency. However, it is worth noting that in the Japanese market, the shares of pharmacists were in high demand on the news about the next experimental drugs against COVID-19. In China, where the market was a little afraid of the quarantine in Hebei Province the day before, they still understand that 103 cases per 1.3 billion people are far from the American morbidity statistics. On the other hand, Malaysia on Tuesday declared a state of emergency with total quarantine in several parts of the country. U.S. Treasury yields continued to rise. For 10-year obligations, it reached 1.15%. Against this background, the dollar index added about 0.12% to 90.57 p.

By 8: 40 GMT:

NIKKEI 225 - 28214.65 p. (+0.27%),

Hang Seng - 28087.82 p. (+0.64%),

Shanghai Composite - 3,570. 25 p. (+1.10%).

US oil stocks may fall for the fifth week in a row
Oil was trading in a small plus. Concerns about current demand persist, but the future no longer seems so bleak. A number of countries are accelerating the coronavirus vaccination process. Even US President-elect Joe Biden has already received a second dose of the vaccine from Pfizer. In the short term, oil is supported by expectations for reserves. According to preliminary data from a Reuters poll, the market is waiting for a drop in US oil reserves for the fifth week in a row. Goldman Sachs has improved its forecast for the price of Brent, expecting it to rise to $65 in the summer, and not at the end of 2021.

By 9: 00 Moscow time:

Brent - $55,85 (+0,34%),

WTI - $52,48 (+0,44%),

Gold - $1858.3 (+0.41%),

Copper - $7956.51 (+1.25%),

Nickel - $17,445 (+2.10%).я