The End of a Long Strange Year

Welcome to the last week of 2020. One might say it done come and gone, and my oh my what a long strange trip it has been indeed.

The fiscal stimulus saga, which first grabbed headlines in June, took another twist as Congress finally passed a $900 billion fiscal stimulus bill on Tuesday, but before the ink could dry, President Trump refused to sign it. Spoiler alert: Skip to the “This Week” section for better news.

The COVID-19 pandemic raged on, with daily new cases and deaths holding steady at record levels. On a positive note, two million doses of the vaccines have already been administered. The vaccines will clearly remain a headline for at least the first half of 2021.

The economic numbers remained extremely challenged, although clearly better than in the spring when the economy was closed. The initial claims for unemployment declined to 803,000 from 892,000 the previous week, but up from 218,000 a year ago. The Conference Board’s Consumer Confidence Index declined in December to  88.6 (1985=100), down from 92.9 in November. A year ago, Consumer Confidence registered at 126.8. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – decreased sharply during the month from 105.9 to 90.3. However, the Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – increased from 84.3 in November to 87.5 this month. A bright spot (?) in the survey was that the bullishness on stocks reached a three-month high.

The market started the week deep in the red on the news that a more contagious variant of the coronavirus appeared in the U.K., but those losses were recouped by Christmas Eve. The S&P 500 finished down just 0.17%, while small caps continued to shine, as the Russell 2000 gained 1.72%. The yield on the Ten-Year Treasury was unchanged at 93 basis points.

The Chicago Bears won again, keeping their playoff hopes alive. I dozed off during halftime and had nightmares reliving Mitch Trubisky floating interceptions into the end zone. When I woke up in the fourth quarter the Bears had scored four touchdowns in a row. Not that I am superstitious, but I will be taking sleeping pills before next week’s game against the Green Bay Packers. ESPN gives the Bears a 72.9% chance of making the playoffs since they have two bites at the apple; either beating the Packers or having the Rams beat the Cardinals.

This Week:

On Sunday night President Donald Trump signed the $2.3 trillion dollar coronavirus relief and government funding bill into law, averting a government shutdown that was set to begin on Tuesday, and extending billions of dollars in coronavirus aid to millions. The two-day delay in signing the bill will create some short-term hardships, but thankfully this drama is finally behind us.

The economic calendar is very sparse during this holiday-shortened trading week.

We have referenced — or hinted at — a number of songs in an attempt to keep the commentary upbeat and hopefully interesting during the pandemic. It is surprising how few good tunes there are about the New Year. A sleeve of golf balls awaits anyone with a good submission. The best I could do was to modestly tweak the Fleetwood Mac classic “Don’t Stop”:

If you wake up and don’t want to smile
If it takes just a little while
Open your eyes and look at the day
You’ll see things in a different way

Don’t stop thinking about tomorrow
Don’t stop, it’ll soon be here
It’ll be better than before
2020 is gone, 2020 is gone

Stocks on the Move:

-10.9% BG Staffing Inc (BGSF) provides workforce solutions. The Company recruits commercial and professional staff in information technology, accounting and finance, light industrial, and real estate fields. There was no significant company news last week. BGSF is a 2.2% holding in the North Star Dividend Fund.

+11.2% Blue Bird Corp (BLBD) designs and manufactures school buses. The Company provides alternative fuel applications through propane-powered and compressed natural gas-powered school buses. Last week, there was no significant company news. BLBD is a 1.9% holding in the North Star Micro Cap Fund.

+13.4% Lakeland Industries Inc (LAKE) manufactures and distributes protective work clothing. The Company offers disposable, chemical, cleanroom, hand, arm, fire, and heat-protective clothing. There was no significant company news last week. LAKE is a 1.1% holding in the North Star Micro Cap Fund.