Daily Market Color January 4, 2021US Equities Fall on First Trading Day of 2021 Rates are mixed on the first trading day of the year Rising global virus cases and uncertainty surrounding tomorrow’s election in Georgia pulled major equity indices lower – the S&P 500 and DJIA fell 1.5% and 1.3%, respectively. Treasury yields and swap rates ended the day mixed – the 10-year Treasury yield closed flat at 0.91%. Georgia runoff elections will be held tomorrow The election results will determine whether Democrats gain control of Congress, which would open opportunities for President-elect Joe Biden to push his agenda. UK re-enters strict lockdown as virus hospitalization increased by 30% from last week In an attempt to ramp up the vaccine rollout, New York Governor Andrew Cuomo also threatened to fine hospitals up to $100,000 if their vaccine doses are not used by the end of the week. Global virus cases are nearing 86 million while fatalitie are just under 1.856 million. Final PMI manufacturing figure of 2020 finishes at a six-year high December’s PMI figure rose to 57.1 from 56.7 in November after machinery and equipment manufacturing experienced notable gains. November’s construction spending hits a record high The figure jumped 0.9% M/M and 3.8% Y/Y. The increase was driven by a robust housing market combined with record low mortgage rates, offsetting the impact from rising COVID-19 cases.