February 8 through February 12, 2021
Euro Trader P. M4
Emerging Markets P. M4
Striking Price P. M5
Commodities P. M6
Inside Scoop P. M7
13D Filings P. M7
Power Play P. M7
Charting the Market P. M9
Winners & Losers P. M10
Research Reports P. M11
Market View P. M12
Statistics P. M13
31,458.40
52-wk:+7.01%YTD:+2.78%Wkly:+1.00%
Dow Jones Industrials
3934.83
S&P 500
52-wk:+16.41%YTD:+4.76%Wkly:+1.23%
14,095.47
Nasdaq Composite
52-wk:+44.85%YTD:+9.37%Wkly:+1.73%
$24.54
ETFMG Alternative Harvest
52-wk:+49.36%YTD:+71.01%Wkly:+5.05%
50%
10
-10
0
20
30
40
Monday Tuesday Wednesday Thursday Close
Source: Barron’s StatisticsFriday
MARKET PERFORMANCE DASHBOARD
Where There’s Smoke
TheETFMGAlternativeHarvestETFtumbled
nearly25%onThursdayandanother2%on
Friday.Thethreemajorindexesclosedthe
week at record highs.
Air Pocket
Stockindexeshoveredneartheirrecord
highs midweek. Pot stocks, meanwhile,
surged another 15%.
Reefer Madness
The cannabis-stock ETFMG Alternative
HarvestETFjumped13%onTuesdayastalk
offederallegalizationintheU.S.heatedup.
BackonTop
TheDowJonesIndustrialAverage,S&P500,
NasdaqComposite,andRussell2000
allclosedatrecordhighsMondayforthe
first time since Inauguration Day.
THE TRADER
Pop the
Prosecco—
And Worry
About
What’s Next
Y
es, you can have too
much of a good thing—
and the stock market is
starting to consider
what that might mean
for future gains.
You wouldn’t be
able to tell just from looking at the
market last week. The Dow Jones In-
dustrial Average, after all, rose 310.16
points, or 1%, to 31,458.40, while the
S&P 500 advanced 1.2%, to 3934.83,
and the Nasdaq Composite gained
1.7%. All three closed at record highs.
What could be wrong with that?
Not much, apparently. The chance
that a huge relief bill gets passed has
risen so high that the market assumes
it’s a done deal. Disappointing eco-
nomic data, like weaker-than-expected
jobless claims, continue to be dis-
missed. And optimism about our abil-
ity to vaccinate the U.S. population and
end the pandemic appears to be rising.
But there is a sense of unease perco-
lating, a sense that something is not
quite right with markets. You can see it
in the continued influence of retail
trading, which found a new-old target
in pot stocks, helping to drive shares of
theETFMG Alternative Harvest
exchange-traded fund (ticker: MJ) up
42% through Wednesday and then
down 26% through Friday’s close. It’s
in the small-cap Russell 2000, which
gained 2.5% on the week, to 2289.36,
and has now outperformed the S&P
500 by 11 percentage points in 2021.
And it’s there in the 10-year Treasury
yield, which closed the week at 1.199%,
its highest since March 2020. Do these
things make sense? And if so, what do
they mean for the overall market?
Part of the problem is simply the
known unknowns. For instance, no
one is quite sure when the economy
will reopen and what it will look like.
We can assume there’s pent-up de-
mand, that workers in restaurants,
retail, and other service-oriented busi-
ness will have jobs to go back to, and
people will want to fly to vacation des-
tinations once again, but we won’t
know for sure until it happens. “My
base case is that it works out well,”
says Drew Matus, chief market strate-
gist at MetLife Investment Manage-
ment. “It all boils down to the speed
people feel comfortable re-engaging.”
There’s also starting to be some con-
By Ben Levisohn
MARKET WEEK