Is this exuberance rational? Broader indexes once again trading higher as the markets prepare for a new stimulus plan announced by President Elect Biden. With a $2 trillion price tag being bantered, the Russell 2000 is the index outperforming. Energy (XOP +3.1%) and Banks (BKX +2%) helping the Value vs Growth trade, but it’s Telcos (XTL +3.4%) and Semis (SMH +3.2%) with the news. Acacia (ACIA +32%) is rising after Cisco said they would buy them, and Taiwan Semi (TSM +9.6%) earnings, are supporting those sectors respectively. TSM will also spend $25-28 billion on capex in 2021, pushing semicap cos (ASML, AMAT, KLAC, LRCX) up 6-7% on the day. Since it’s such a positive day, it makes sense for two new IPOs to skyrocket; Petco (WOOF) is up 60%, and Poshmark up 131%. Add that bitcoin is back to $40,000, and GameStop (GME) is up 26%, exuberance is bubbling.
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