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Market Indexes: Three of four indexes rose this week, with the Russell small caps leading by a wide margin. The S&P 500 was the only loser, but the DOW was barely positive, as signing of the stimulus bill was delayed by a Presidential veto threat. Congress will meet Monday to decide whether to vote to override the veto. A Brexit deal was announced on Thursday.Looking for additional income? You can replace lost dividend income with option premiums, with much higher yields. You can find a wide array of high yield options trades on our Public Cash Secured Puts Table and our Public Covered Calls Table.
Volatility: The VIX was flat this week, ending at $21.53.
High Dividend Stocks: These high dividend stocks go ex-dividend next week: ACRE, CIM, TDI, TWO, NLY, ANH, ARI, BGS, EFC, EARN, GSBD, NHI, ORC, PBA, CGBD, TPVG, WPC.
Market Breadth: 12 out of 30 DOW stocks rose this week, vs. 19 last week. 48% of the S&P 500 rose, vs. 62% last week.“Give Now: Top US Charities & Corporate Charitable Donors” (SATURDAY) “Monthly Payer, 7%-8% Yields: Gladstone Commercial REIT” (MONDAY)
Economic Reports: “The latest stimulus package was put into jeopardy Wed., following a veto threat by the President. A vetoed bipartisan defense policy bill raised the prospect that the United States could face a government shutdown during a pandemic, stirring new turmoil in Washington as the President headed to Florida for Christmas, after demanding dramatic changes to a $2.3 trillion package that funds the federal government and provides nearly $900 billion in coronavirus aid.Democrats and Republicans objected to the veto of the National Defense Authorization Act, which sets up the possibility of a veto override by Congress.
U.S. House of Representatives Speaker Nancy Pelosi said on Wednesday the House would return on Monday, Dec. 28, to vote on whether to override the veto. That is the same day government funding is due to expire. A Senate vote is expected shortly thereafter.” (Reuters)
“Congressional leaders on Sunday reached a hard-fought agreement on a $900 billion stimulus package that would send immediate aid to Americans and businesses to help them cope with the economic devastation of the pandemic and fund the distribution of vaccines.The agreement was expected to provide $600 stimulus payments to millions of American adults earning up to $75,000. It would revive lapsed supplemental federal unemployment benefits at $300 a week for 11 weeks — setting both at half the amount provided by the original stimulus law. It would also continue and expand benefits for gig workers and freelancers, and it would extend federal payments for people whose regular benefits have expired.The measure would also provide more than $284 billion for businesses and revive the Paycheck Protection Program, a popular federal loan program for small businesses that lapsed over the summer. It would expand eligibility under the program for nonprofits, local newspapers and radio and TV broadcasters and allocate $15 billion for performance venues, independent movie theaters and other cultural institutions devastated by the restrictions imposed to stop the spread of the coronavirus. While the plan is roughly half the size of the $2.2 trillion stimulus law enacted in March, it is one of the largest relief packages in modern history.” (NY Times)
“Britain and the European Union struck a hard-fought trade agreement on Thursday, settling a bitter divorce that stretched over more than four years and setting the terms for a post-Brexit future as close neighbors living apart.The deal, which must be ratified by the British and European Parliaments, came together in Brussels after 11 months of grinding negotiations, culminating in a last-minute haggle over fishing rights that stretched into Christmas Eve, just a week before a year-end deadline.Despite running to thousands of pages, the agreement leaves critical parts of the relationship to be worked out later. And it will not prevent some disruption to trade across the English Channel, since British exports will still be subjected to some border checks, adding costs for companies and causing potential delays at ports.” (NY TImes)
“Personal income fell in November for the second straight month, the Commerce Dept. reported on Wed., and consumer spending declined for the first time since April, as waning government aid and a worsening pandemic continued to take a toll on the U.S. economy.Personal income fell 1.1 percent in November and is down 3.6% since July, as the loss of federal assistance more than offset rising income from wages and salaries.Separate data from the Labor Department showed that Unemployment Benefits applications remained high last week and have risen since early November. Taken together, the reports are the latest evidence that the once-promising economic recovery is sputtering. ” (NY Times)
Week Ahead Highlights: The market will be closed on Friday, New Year’s Day.
Analyst's Disclosure: I am/we are long TPVG.
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