What the markets want for Christmas: for starters, a trillion in stimulus spending

December 18, 2020, 9:54 AM UTC

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.

Happy Friday, Bull Sheeters. In the latest episode of Groundhog Day, Congress failed to reach a deal on a stimulus package, leaving investors—not to mention millions of struggling American families—in the lurch. Again.

Spoiler alert: they do it all over again today, and stocks will rise and fall on any perception of progress, regardless of how infinitesimal. The British-EU spin-off—called Brexit—is just as tedious.

Trade on Friday has been choppy on both sides of the Atlantic with U.S. futures flat, but off their lows. Adding to the volatility—it’s a quadruple witching day in the U.S.

Let’s check in on what’s moving the markets.

Markets update


  • The major Asia indexes are awash in red in afternoon trading with the Hang Seng down 0.7%.
  • The Trump Administration will add dozens of Chinese firms, including chips giant the country’s top chipmaker SMIC, to its trade block list, Reuters reports, a move that’s rocking Chinese markets. SMIC, at one point, was down 5%, in Hong Kong.
  • Earlier this week, I shared survey data showing the stampede into emerging markets in recent months. Now, we have hard-currency data. Spoiler: the in-flows volume into EM is at the fastest pace in seven years.


  • The European bourses were in the red out of the gates before rebounding. 90 minutes into the trading session, the Stoxx Europe 600 was up 0.2%.
  • The brutal COVID second wave is adding to trading volatility. Yesterday, France’s Emmanuel Macron disclosed he’d tested positive, and now Europe’s capitals are scrambling to contain a feared COVID-19 cluster akin to the one we saw in Washington in October.
  • Yesterday’s optimism for an imminent Brexit deal has faded. Britain is warning that talks have been “blocked and time is running out” as the two sides cannot reach an accord over fish… Fish? Yep, fish. The pound fell on the news.


  • U.S. futures are trading sideways. That’s after the major averages notched a record-setting session on Thursday—all three closed at all-time-highs.
  • I woke up this morning, and there was no deal on a new stimulus package—just like every morning for the past six months. Clearly, Congress isn’t data-dependent. Brutal jobless figures, anemic retail sales data, an escalating poverty rate—none of these flashing-red warning signs can bring them to an accord.
  • Shares in Alphabet’s Google fell a mere 0.95% yesterday even after the search giant got slammed with its third antitrust case in the past two months. My colleague, Aaron Pressman, combed through the 130-page Texas-led suit filed earlier this week, and decoded all the redacted passages. It’s worth checking out.


  • Gold is down, trading around $1,885/ounce
  • The dollar is up as futures sink.
  • Crude is flat, but Brent futures are trading above $51/barrel.
  • Bitcoin continues to march higher. It’s up 3%, trading around $23,000.


By the numbers

$88 billion

We’ve talked quite a bit about IPOs here, but not so much about SPACs. A refresher: SPACs are blank-check companies formed with the express intention of merging with or acquiring another company. Usually, if such a deal isn’t consummated within two years, the seed investors get their money back. Over the past 28 months, 272 SPACS have formed, raising $88 billion. A successful SPAC is one that goes public and then finds a firm to merge with, essentially filling the empty box with an actual company. According to Goldman Sachs, an overwhelming number of SPACs (71%) have yet to find a dance partner. That’s not a great hit rate. The clock is ticking on all those misfit empty-box SPACs, and yet the money continues to flow into the creation of new ones. What could go wrong?


Congratulations, Bitcoin bulls. Crypto has been the trade of the week, with Bitcoin up 29% in the past seven days. (To put that into perspective, the Nasdaq 100, hitting an all-time high yesterday, is up 3% over that same period.) This is one of those atypical trades in that it started out as a retail play, and now institutional types have jumped in. Maybe too many institutional types; Bitcoin now ranks as the third most overcrowded trade, according to BofA’s most recent fund manager survey.


This is the last Bull Sheet newsletter for 2020. The first issue came out in mid-January. At that time, I was writing to a smallish community of about 3,000 readers. We’ve since grown more than 8-fold over the past 11 months to come in right around 25K readers. By that measure, Bull Sheet has grown at a faster clip than Tesla, Moderna and the FAANG stocks. Thank you for indulging all those moments I went off script—i.e, to riff on my roast turkey recipe or to take you on a few journeys around Italy—detours that will do nothing for your portfolios. I will see you all back here in January, 2021. I want to wish you and your families a happy holiday season, and my very best wishes for a prosperous new year.

Buone feste, tutti!


Have a nice day, everyone. I’ll see you back here in 2021… But first, there’s more news below.

Bernhard Warner

As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.

Today's reads

Insider trading on Capitol Hill. Watchdogs have long been concerned that lawmakers can trade (and, indeed, they have traded) on the classified information they routinely receive before the rest of us. As such, Congress passed the Stop Trading on Congressional Knowledge (STOCK) Act in 2012. The law isn't doing the job, argues these economists who, to prove their point, analyze a big basket of the 2,596 trades executed by Georgia Senator David Perdue in his six years on the job.

The IPO market. In this week’s episode of our Brainstorm Tech podcast, Michal Lev-Ram talks to Lise Buyer of Class V Group about non-traditional methods of going public: SPACs and the auction model. Both are gaining popularity; Buyer explains why. Then, Brian O'Keefe speaks with Threshold Ventures' Emily Melton about how the rush to go public looks from the VC world, and what trends she's seen that will carry over into 2021. You can listen to the episode here.

Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.

Market candy

How's the economy really doing?

Not great. The New York Times' Ella Koeze puts together nine charts that show the state of the American economy. With just a week before Christmas, the numbers, in some respects, look Dickensian. For starters, since February, nearly 10 million more Americans have lost their jobs and more than 4 million have left the work force entirely. More families are falling into poverty, and cannot put food on the table... In short, they're looking for a Christmas miracle.

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