A brief last note for the year of COVID – 19, 2020


Dear Friends,

I will be taking the next few days off. The next Kenny’s Commentary is scheduled for release on January 4, 2021. In my absence, I hope you find much-needed comfort and spiritual nourishment in your traditions, happiness and warmth with family and friends, and reasons to be hopeful in 2021.

I would also like to thank you for another year of solid growth in readership and engagement. I am genuinely privileged that you allow me to share my perspectives with you every week. Thank you for all of your emails and responses to the note over the past 12 months.

Warmest Regards,



The Federal Reserve released the Industrial Production numbers for November on Tuesday. On a M/M basis, they were 0.4% versus the previous month’s reading of 0.9%. Manufacturing output on a M/M basis was 0.8% versus the prior reading of 1.15%. Capacity Utilization ticked up to 73.3%. Retails sales data M/M was a disappointment. Retail sales M/M were -1.1% versus the prior reading of -0.1%. PMI Composite Flash slipped to 55.7 from the previous month’s revised reading of 58.6.

Fed Chair Powell’s press conference after the FOMC meeting and announcement was both in-line with expectations but also a bit unexpected. He assured us that that rates would remain unchanged and he committed to ongoing bond purchases – as expected. However, he also told a reporter from Politico in answer to a question that the Fed had given no thought or consideration to what emergency actions might be needed in the upcoming Biden administration. As you can imagine, many were left a bit puzzled. It may be that Fed Chair Powell was simply trying to instill confidence but not everyone seemed to be, given the response in the press following the conference.

Weekly Jobless Claims were significantly weaker than the Econoday consensus. The actual results were 885 K versus a consensus of 806 K. The Philadelphia Fed Manufacturing Index results for December confirmed for us what we all already knew. The reading for December was 11.1 versus November’s 21.1. Economic activity by, most measures, was halved relative to the previous month’s reading – at least in terms of the releases we received last week. As you will see below, Econoday consensus is calling for a similar trend line for this week’s economic data releases.

This week’s economic calendar highlights:

Though this is a holiday-shortened trading week, there is certainly no shortage of potentially market-moving economic releases on tap in the next few days. The first release of consequence this week is the final Q3 GDP Q/Q – Annual Rate release on Tuesday morning. Econoday consensus is 33.1% – unchanged from the previous reading. Personal Consumption & Expenditures – Annual Rate is a component of this top-line release. There is no Econoday consensus for this but the previous reading was 40.6%. Also on Tuesday, Consumer Confidence for December is released by the Conference board. Expectations are for this reading to tick fractionally higher to 97.0 from November’s reading of 96.1. Existing Home Sales data from November is expected to slip to 6.715 M. However, the month-over-month reading in November was 4.3% and the year-over-year jump was 26.6%.

This week’s highlights wrap up on Wednesday. Durable Goods for November are out at 8:30 am. New Orders M/M are expected to drop in half to 0.7% from October’s 1.3%. Ex-Transports and core-capital goods are expected to slip in-line. As you certainly have noticed, Weekly Jobless Claims have begun to turn higher in recent weeks – underscoring the need for action on Capital Hill. Politicians of both parties have been “negotiating” over this Stimulus/Relief bill for 6 months. What a disgrace. The Bureau of Economic Analysis releases November’s Personal Income and Outlays at 8:30 am as well. Personal Incomes are expected to improve from -0.7% to -0.3%. Consumption is headed the other direction – dropping to -0.2%. Finally, New home Sales for November are released at 10:00 am. The annual rate is expected to remain relatively unchanged (999 K vs 988 K).

New contributor to Kenny’s Commentary

Jordan Kimmel Chief Investment Strategist
jkimmel@lebenthal.com | www.lebenthal.com
p: 516-785-1800 | m: 908-202-1971

Working hard, planting seeds, tending to the land, and knowing that patience will be rewarded by the future harvest.

The powerful move off the March bottom continues to confuse the public that is bombarded with scary headlines daily. Despite the horrific news on page one in the newspapers and the political rancor in Washington, the internals of the US stock markets remain solid. The advance decline line is hitting new highs and the new low/new high ratio shows a market that is showing broad sector participation and a lack of sellers.

The gains over the last several months are almost unimaginable and we are now seeing signs of excess by inexperienced speculators. Never truer is the concept that “it’s a market of stocks”, and not just “the stock market”. The greater fool theory assumes there will always be a greater fool to come along and pay an even higher price, no matter how absurd the valuation may be. It is important to remember the moving average algorithms will sell as fiercely as they are currently buying when the time comes. Algorithms are simply programmed and have no judgment or experience.

We remain constructive but cautious at this time. With fixed income yields expected to stay “lower for longer”, we expect the most stable companies with a history of increasing their dividends will continue to attract interest from institutions and individual investors. We suggest the fear of missing out should take a back seat to the fear of the greater fool not bailing you out.

Flickr photo: Rhi Ph0tography
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