Telemus Weekly Market Review December 28th - January 1st, 2021
December 28 – January 1 Week in Review
It was a mixed bag for the markets as the large-cap indices set fresh intraday and closing record highs in the last week of the year. The S&P 500 finished up 1.4%, and the Dow Jones Industrial Average, also finished up 1.4%, while the Nasdaq Composite gained 0.7%. The small-cap Russell 2000, however, pulled back from record territory with a 1.5% decline.
It's worth mentioning in this final report of 2020 that the S&P 500 ended the year with a 16.3% yearly gain, which was more than the Dow, up 7.3%, but less than the Nasdaq, up a whopping 43.6%, and the Russell 2000, up 18.4%. I think it’s safe to say that most “experts” were surprised by the markets performance this year in the face of the global pandemic and the resulting economic fallout.
Besides momentum, which was arguably the main driver to the move in stocks, supporting factors last week included President Trump signing the $900 billion stimulus and omnibus spending bill, and the U.K. approving the COVID-19 vaccine from AstraZeneca and Oxford for emergency use. Neither were particularly surprising, but the news was good for sentiment reasons.
Ten of the 11 S&P 500 sectors contributed to the advance. The consumer discretionary, communication services, financials, health care, and utilities sectors outperformed the benchmark index. The energy sector was the lone holdout and ended the year with a 37.3% decline.
Unsurprisingly, the market wasn't bothered by Senate Majority Leader McConnell saying that the $2000 stimulus checks (an increase from the $600 originally proposed) had "no realistic path" to quickly pass in the Senate. It could be taken up in the new Senate in January, but that's an issue for the next year and probably the new Biden administration.
In the bond market the 2 year Treasury closed unchanged at 0.12% and the 10 year Treasury yield declined one basis point to 0.92%, leaving it down a surprising 100 basis points for the year.
In other markets last week the U.S. Dollar Index closed lower at 89.93, WTI crude closed fractionally higher for the week at $48.42 a barrel and gold closed at $1,901.60 an ounce, up for the week and its best yearly performance in quite a while.
January 4 – January 8 Economic Calendar
- Monday
- PMI Manufacturing Final
9:45 AM ET - Construction Spending
10:00 AM ET - Investor Movement Index
12:30 PM ET
- Tuesday
- Motor Vehicle Sales
- Redbook
8:55 AM ET - ISM Manufacturing Index
10:00 AM ET
- Wednesday
- MBA Mortgage Applications
7:00 AM ET - ADP Employment Report
8:15 AM ET - Factory Orders
10:00 AM ET - EIA Petroleum Status Report
10:30 AM ET - FOMC Minutes
2:00 PM ET
- Thursday
Thursday - Challenger Job-Cut Report
7:30 AM ET - International Trade in Goods and Services
8:30 AM ET - Jobless Claims
8:30 AM ET - ISM Services Index
10:00 AM ET - EIA Natural Gas Report
10:30 AM ET - Fed Balance Sheet
4:30 PM ET - Money Supply
4:30 PM ET
- Friday
- Employment Situation
8:30 AM ET - Wholesale Inventories [Preliminary]
10:00 AM ET - Baker Hughes Rig Count
1:00 PM ET - Consumer Credit
3:00 PM ET
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