Friends
It was a difficult day for stocks as the weight of Tesla being added to the S&P 500 and the never ending stimulus talks took a toll on the market averages. First, Tesla being added to the S&P 500 is like putting a whale in a lake. Adding it to the S&P 500 caused the index funds to have to buy massive amounts of Tesla stock while selling other S&P members to cover it. Thus the pressure on some of the biggest names in the S&P. In addition, every time we seem to be close to a stimulus deal, something or someone seems to get in the way. Perhaps by this weekend something will give. Again, waiting for Godot.
As for today, by the close the Dow Jones Industrial Average was down 124 points to finish the day at 30,179. The S&P 500 was down 13 points to close at 3,709. The Nasdaq Composite Index was down 9 points to close at 12,755. Gold was down $5 to trade at $1,884 per ounce, while oil was up $.50 to trade at $48.86 per barrel WTI.
To add to today’s action was what we call a quad witching where individual stock futures, stock index futures, stock options and index options all come due. So, it was a difficult day to handicap for market participants, but when all was said and done it wasn’t too bad. Let’s see if Santa is getting ready to deliver the fabled Santa Clause rally in the next 2 weeks. Stay tuned.
