Janet Yellen, Treasury Secretary Nominee, Outlines Priorities

Janet Yellen, Treasury Secretary Nominee, Outlines Priorities

The King Report January 20, 2021 Issue 6430

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After soaring during the Nikkei’s 1st Session, ESHs retreated sharply during the 2nd Session.  ESHs then chopped sideways until a spurt higher occurred on the NYSE open.  This rally lasted one minute.  ESHs and US stocks then declined sharply on another successful pump & dump scheme.

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ESHs declined 24 handles from their high until 11:16 ET.  The obligatory rally into the European close then materialized.  The rally morphed into a Noon Balloon; ESHs and US stocks returned to the highs that were created on the NYSE open.

The VIX Fix January option expiration (today) and Yellen abetted the rally.  Tuesday was the last day of trading for January VIX options.  Yellen stated at her virtual Senate confirmation hearing for Treasury Secretary that she favors a “big” fiscal package and the focus should be on Covid relief, not tax increases – but in the longer term ‘fair’ taxes would be needed to pay for all Biden’s plans.    https://twitter.com/TCPigott/status/1351596828110823430

Janet Yellen, Treasury Secretary nominee, outlines priorities under Biden administration

She would prioritize a “big” fiscal package to bridge the U.S. economy to a post-pandemic world…“But right now, with interest rates at historic lows, the smartest thing we can do is act big.”…

"It’s very important that corporations and wealthy individuals pay their fair share,” Yellen said.  The Biden administration’s framework for tax policy includes a steeper tax on those making more than $400,000 a year with a hike on the corporate tax rate to 28% (compared to the 2017 Trump tax cuts that lowered the rate from 35% to 21%)…

Yellen statements from Senate confirmation hearing

  • US needs to invest in infrastructure, R&D, training and workforce development.
  • We have difficult months ahead
  • Sees interest rate staying low for a long time
  • “The United States does not seek a weaker currency to gain competitive advantage.”
  • The Biden administration is prepared to use every tool in the toolbox to fight China's unfair economic practices and that over time
  • US needs to address subsidiaries that China uses
  • The Biden administration will cooperate with key allies on the China challenge as well.
  • Would Examine Possibility of Issuing 50-year Treasury Bonds
  • Electric Vehicles are Good Way to Address Climate Change, Create Good Jobs for Americans
  • She will appoint senior climate official at Treasury; climate change is an existential threat
  • Policy should focus on finding ways for Americans to build assets, reduce the racial wealth gap.
  • Women have suffered disproportionately in the pandemic downturn.
  • Crypto currencies are a concern in financing terrorism
  • Some hedge fund leverage levels are dangerous

The US rally peaked fifteen minutes before the VIX Fix (14:15 ET).  ESHs and stocks then trades sideways with a downward bias until selling appeared 4 minutes before the NYSE close.

NFIB Survey: Sends a Strong Warning about Small-Cap Stock

There are currently 30.7 million small businesses in the United States. Small businesses (defined as fewer than 500 employees) account for 99% of all enterprises, employ 60 million people, and account for nearly 70% of employment…In December, the survey declined to 95.9 from a peak of 108.8…

Small business capital expenditure “plans” have a high correlation with real gross private investment. The plunge in “CapEx” expectations suggests business investment will drop sharply next month

Small business owners understand the limited impact of artificial inputs. As such, they will not make long-term hiring decisions, an ongoing cost, against a short-term artificial increase in demand.  Also, given President Biden is focused on more government regulation and higher taxes (which falls squarely on the creators of employment), increased costs will further deter long-term hiring plans

Hotels operators are filing for bankruptcy at a faster pace in the U.S. More may be on the horizon

Just two hotel companies with liabilities greater than $50 million filed for bankruptcy in all of 2020, according to data compiled by Bloomberg. That’s still the most since 2012, which saw four filings, but well below the 10 cases seen in 2009…Lenders have been reluctant to foreclose on struggling hotels since the pandemic crushed revenues…“If you take back a hotel, you’re the mortgage, and now all of a sudden it’s your responsibility to keep the lights on,” Selbst said. “That’s like foreclosing on a horse. You have to feed the horse.”…  https://t.co/cKclssAnml

The ECB: ECB and Commission are working together to prepare a digital euro…to respond to new payment needs in Europe...   https://t.co/B5tGlZtxjt

Breitbart’s @carney: Has there ever been a Treasury Secretary with as little breadth of experience as Janet Yellen? She's been an academic and Fed official but never an administration policymaker or private sector business leader.

Positive aspects of previous session

Late morning thru early afternoon US rally on VIX Fix Jan options last trading session and Yellen

Negative aspects of previous session

Another pump & dump on the NYSE open

The dollar declined smartly on Yellen’s support for Biden’s Trillions

Ambiguous aspects of previous session

What will Dems and Biden do to the economy?

First Hour/Last Hour Action [S&P 500 Index]: 1st Hour from NYSE open: Down; Last Hour: Down

Pivot Point for S&P 500 Index [above/below indicates daily trend to traders]: 3794.60
Previous session High/Low: 3804.53; 3780.37

Trump to Say He Prays for Biden’s Success in Farewell Address

“All Americans were horrified by the assault on our Capitol,” he will say, according to the excerpts. “Political violence is an attack on everything we cherish as Americans. It can never be tolerated.”… https://www.bloombergquint.com/politics/trump-to-say-he-prays-for-biden-s-success-in-farewell-address

BBG’s @JenniferJJacobs: Biden's inauguration speech will last 20 to 30 minutes. Theme is “unity,” his aides say.  Trump in his farewell speech will say: “I am especially proud to be the first president in decades who has started no new wars…”

WaPo’s @seungminkim: "Now, as I prepare to hand power over to a new administration at Noon on Wednesday, I want you to know that the movement we started is only just beginning."

US Secretary of State Pompeo @SecPompeo: I have determined that the People’s Republic of China is committing genocide and crimes against humanity in Xinjiang, China, targeting Uyghur Muslims and members of other ethnic and religious minority groups.

@nytimes: The Justice Department will not pursue insider trading charges against Senator Richard Burr, who dumped hundreds of thousands of dollars in stock after receiving Senate coronavirus briefings the early days of the pandemic (because the Swamp and Deep State protect its own!)

After the close NFLX reported EPS of $1.19 vs $1.39 expected; Revenue of $6.64B vs $6.63B expected and paid net subscriber additions of 8.51m vs 6.03m expected.  NFLX soared 11% in after-hour trading. https://finance.yahoo.com/news/netflix-q4-earnings-2020-171259535.html

Today – Bullish factors: Q4 earnings reporting season is underway; the ECB meets today and Thursday.  The BoJ meets today and tomorrow; no change in policy is expected.  Traders expected the BoJ and ECB to issue its usual dovish jabberwocky on Thursday.  Dovish communiques could foment a trading top.

Second half of January seasonal weakness begins tomorrow per Almanac Trader.  More importantly, as astute traders realize, when seasonal weakness or strength is due, it is incumbent to scrutinize technical indicators for evidence of trend changes.  Yesterday, the daily MACD for the S&P 500 Index turned negative.  Also, the relative strength of the indicator peaked in June; and the January apex is below the early December peak.  This mean momentum is contracting.  The MACD signal is an early warning.  Traders and investors should look for confirmation of a trend change by price action or model indicator.

Yellen Treasury

S&P 500 Index with MACD and Trender Buy/Sell – NB: Price action has been flat since 1/6.  A close below 3686.47 would trigger a Trender Sell signal.

ESHs rallied 13.25 early last night on Netflix’s after-hour surge and the expected MSM’s glorification of Biden’s Inauguration, which will make retail traders even more eager to buy stuff on the NYSE open.  The opportunity for another pump & dump is very favorable.  ESHs are +5.50 at 21:00 ET.

Expected Earnings: USB .95, PG .90, UNH 2.41, FAST .33, MS 1.29, DFS 2.34, UAL -6.57

Expected Economic Data: Jan NAHB Housing Market Index 86; Biden’s Inauguration noon ET

S&P 500 Index 50-day MA: 3675; 100-day MA: 3537; 150-day MA: 3437; 200-day MA: 3306

DJIA 50-day MA: 30,059; 100-day MA: 28,976; 150-day MA: 28,218; 200-day MA: 27,270

S&P 500 Index - Trender trading model and MACD for key time frames

Monthly: Trender is negative; MACD is positive – a close above 3920.04 triggers a buy signal

Weekly: Trender and MACD are positive – a close below 3517.42 triggers a sell signal

Daily: Trender is positive; MACD is negative – a close below 3686.47 triggers a sell signal

Hourly: Trender is negative; MACD is positive – a close above 3811.99 triggers a buy signal

@danielchaitin7: Tucker Carlson: Mitch McConnell "sent word over to the White House: if you pardon Julian Assange, we are much more likely to convict you in an impeachment trial." [This is blackmail!]

The WSJ’s @AndrewRestuccia: Trump has talked to associates in recent days about starting a new party after he leaves the White House.  He wants to call it the Patriot Party.

House security chief said lawmaker wariness of military at Capitol drove his resistance to early request for National Guard [Pelosi & McConnell responsible; but now 65k troops guard DC!] https://www.washingtonpost.com/politics/paul-irving-capitol-attack/2021/01/18/59fb4aae-567d-11eb-a931-5b162d0d033d_story.html

Self-styled militia members made plans to storm U.S. Capitol days before Jan. 6 attack, according to unsealed conspiracy charges (So, the riot was preplanned?)  https://www.washingtonpost.com/local/legal-issues/conspiracy-oath-keeper-arrest-capitol-riot/2021/01/19/fb84877a-5a4f-11eb-8bcf-3877871c819d_story.html

FBI affidavit says Virginia man conspired to breach Capitol, discussed plans on Jan. 1
The affidavit comes amid claims that a crowd stormed the building in response to comments from President Trump at a Jan. 6 rally…  [Another instance of a pre-planned attack on the Capitol] https://justthenews.com/government/security/fbi-affidavit-says-virginia-man-conspired-breach-capitol-discussed-plans-jan-1

@kylenabecker: "WHY are you letting this happen? WHY haven't you called for BACK-UP? WHERE is your BACK-UP? This is our DAMN CAPITOL BUILDING! And you all are letting it get DESTROYED! Watch these police stand by and do nothing to stop anyone at the Capitol siegehttps://t.co/PYJ9FMPdxf

McConnell says Trump "provoked" crowd that stormed Capitol: "The mob was fed lies" http://hill.cm/c2t80XW

The lie was Trump’s insistence that VP Pence could overturn the Electoral College vote.  If Mitch avers that there was no vote fraud, then Mitch is the deceitful one.  Vote fraud is a staple of US elections; for 2020, it’s only a question of magnitude.  In fact, McConnell has been dogged by claims that he benefited from vote fraud in Kentucky.  Mitch wants to purge Trump from what McConnell believes is his wholly-owned GOP and deflect blame for, along with Pelosi, not providing the necessary security for the Capitol after advance warnings of attacks.  Mitch also wants to share power with Schumer.

Was McConnell’s re-election a fraud?

Investigator Alison Greene has been suspicious about just how Mitch McConnell managed to be re-elected by such a huge margin. His polling numbers had been scraping bottom, and yet he supposedly beat Amy McGrath by double digits. She also found that some Kentucky counties appear to have more registered voters than people! And there’s more…

Liberal activists have suggested that Senate election results show signs of fraud. They point to Sen. Mitch McConnell winning counties where Democratic registration far outnumbers Republican registrationhttps://spectrumnews1.com/ky/lexington/news/2020/11/20/there-are-no-known-cases-of-voter-fraud-in-kentucky-election

McConnell: 'There is voter fraud' February 15, 2017

"I do want to point out, though, the Democratic myth that voter fraud is a fiction is not true. We've had a series of significant cases in Kentucky over the years. There is voter fraud in the country."… https://www.wave3.com/story/34511300/mcconnell-there-is-voter-fraud/

Republican Sen. McConnell, and Democrat Sen. Schumer close in on power-sharing agreement in evenly divided Senate - CNN https://t.co/FMsxCbJBPM

A week ago, we noted that McConnell and Schumer might create a ‘powering-sharing agreement’.

McConnell, Pelosi, Schumer will join Biden at church before his inauguration https://trib.al/q3jDHPT

Axios’ @alaynatreene: Kevin McCarthy & Mitch McConnell will skip Trump's departure ceremony in Maryland tomorrow morning in favor of attending mass with Joe Biden ahead of his inauguration

What McConnell, Romney, Paul Ryan and House Minority Leader McCarthy don’t fully comprehend is that the reason most Americans vote for them and similar GOP candidates is to protect them from Demsagenda and not because they like the GOP candidates.  As Tucker Carlson cogently explained, the reason that Trump generated enormous crowds and support was because many Americans though he was the sole protection from Dems and the GOPe, which includes Mitch et al.

@kylenabecker: Republicans’ idea of revenge against Democrats is a strongly worded letter, followed by a series of mean tweets. Democrats’ idea of revenge against Republicans is to get them fired, canceled, humiliated, branded racist, fascist & terrorist, deplatformed, silenced & un-personed.

@ShepardAmbellas: National Guard chief admits there are now “65,000” troops in D.C. https://twitter.com/ShepardAmbellas/status/1351517056387207168

Fox’s @johnrobertsFox: (ex-VA AG) @KenCuccinelli says DC @MayorBowser requested crew-served machine guns be included in the National Guard's arsenal to protect the capital. Cuccinelli says she was told no - that weapons like that have no place in securing a civilian event. (Why the overkill now?)

Governor Greg Abbott Offended By Vetting Of Texas National Guard In DC: Threatens to Never Deploy to DC Again - “This is the most offensive thing I’ve ever heard,” Gov. Abbott tweeted Monday, Jan. 18. “No one should ever question the loyalty or professionalism of the Texas National Guard. I authorized more than 1,000 to go to DC. I’ll never do it again if they are disrespected like this.”… https://tatumreport.com/governor-greg-abbott-offended-vetting-texas-national-guard-dc-threatens-never-deploy-dc/

Dianne Feinstein defends GOP senators’ right to object to election results

“I think the Senate is a place of freedom,” Feinstein told reporters at the Capitol. “…In some cases, it’s positive, in some cases, maybe not. A lot of that depends on who’s looking and what party they are I think it’s a moot question (impeachment/trial)this president is leaving office,” Feinstein said. “So it won’t have any practical application…”

Trump formally declassifies Russia documents over objections of FBI

Officials said they expected the first materials to surface in public by midday Wednesday.

First Trump declassified Russia document: Christopher Steele's 2017 confessional to the FBI

Steele told FBI he leaked Russia collision story to help Clinton and Great Britain, and was connected to his primary dossier source by former NSC staffer and impeachment witness Fiona Hill https://justthenews.com/accountability/russia-and-ukraine-scandals/first-declassified-russia-document-steeles-confessional

NYPD Arrests 28 Protesters at MLK Day Demonstration - Eleven officers were injured…

GOP Sen. Marco Rubio: No Amnesty Until All Americans Can Get Good Jobs
“Before we deal with immigration, we need to deal with COVID, make sure everyone has the chance to find a good job, and confront the threat from China,” Rubio said… America should always welcome immigrants who want to become Americans. But we need laws that decide who and how many people can come here, and those laws must be followed and enforced…

Companies pull 'My Pillow' off shelves in attempt to silence free speech

Company founder and CEO Lindell suggested the left is seeking to drive the company out of business due to his avid support of President Trump as well as his willingness to speak out on the evidence of voter fraud during and after the election…

Democrats Pledge to Fight Trump Rule Ensuring Banks Won’t Refuse Service to Conservatives

In January 2020, a group of Senate Democrats sent a letter to all of the major American banks, requesting that they “stop financing … oil and gas drilling and exploration in the Arctic National Wildlife Refuge” in order to better “prepar[e] the U.S. economy to weather the growing impacts of the climate crisis.”…  https://thefederalist.com/2021/01/19/democrats-pledge-to-fight-trump-rule-ensuring-banks-wont-refuse-service-to-conservatives/

A manifestation of Trump Derangement Syndrome is American Apartheid.  Due to political beliefs, Americans are being fired; excluded from social media; banned from representation or employment in US institutions and denied access to segments of the US economy.  There will be severe consequences for American Apartheid in coming years.

Hillary just days ago declared that Trump was an illegitimate president due to Russian interference in the election – a change she has made for 5 years longer than Trump supporters’ charge of voter fraud.   She also commanded her supporters to “resist” Trump.  Have social media deplatformed Hillary?  Have corporations ostracized her?  Who in the Establishment has vilified her for her vile behavior?

Col. Rob Maness ret. @RobManess: I served under two presidents I didn’t vote for. When the second, Obama, visited my base, it was my security force and sniper team that protected him. This political vetting is bulls#*t and a disgrace to America’s Armed Forces. Shame on any @DeptofDefense official who accepts it

@TuckerCarlson: Shortly before he was assassinated in 1935, the populist Democrat senator Huey Long of Louisiana had a flash of insight. If the U.S. ever winds up with a fascist government, Long said, “we’ll have it under the guise of anti-fascism.”

The truth is the fight for America’s soul is not a battle between left and right but between reason and madness.” -- Joe Hildebrand, Australian journalist

Updated on

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)www.valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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