January 4 – January 8 Week in Review
The record-setting run for stocks that ended 2020 carried over to the start of 2021 last week despite the unrest in Washington D.C. as each of the major indices set intraday and closing record highs. The Russell 2000 was the big winner with a 5.9% gain, followed by the Nasdaq Composite with a 2.4% gain, the S&P 500 with a 1.8% gain, and the Dow Jones Industrial Average with a 1.6% gain.
As noted above it was a record setting week for the major indexes. The S&P 500 topped the 3,800 level, the Dow topped 31,000, the Nasdaq topped 13,000, and the Russell 2000 briefly topped 2,100.
Last week’s positive market momentum was aided by expansionary December manufacturing PMIs out of the Eurozone, Asia, and the U.S.; expectations for more fiscal stimulus after Democrats clinched control of Congress after flipping both Senate seats in Georgia; Saudi Arabia agreeing to cut an additional 1 million barrels a day in February and March; and high flying Tesla reporting record Q4 deliveries driving the stock to record highs and making Elon Musk the wealthiest person on the planet.
The energy sector rallied 9.3% amid sharply higher oil prices while the materials, financials, and consumer discretionary sectors advanced between 3% and 6%. The counter-cyclical real estate, consumer staples, utilities, and communication services sectors finished in negative territory. The tech sector received solid support from its semiconductor components. The Philadelphia Semiconductor Index advanced 5.0% last week.
Of note last week was the market’s ability to look past the political unrest in D.C. and a weak December employment report, which showed payrolls unexpectedly decline by over 140,000 jobs.
On the interest rate front the 2 year Treasury yield rose 1 basis point to 0.137% and the 10 year yield rose a whopping 19 basis points to 1.12% amid increased selling interest, which benefited the financial sector.
In other markets WTI crude closed at $52.73 a barrel and a gain of over $4 on the week, the U.S. Dollar index closed higher at 90.07 and gold prices fell closing at $1,849.70 an ounce.
January 11 – January 15 Economic Calendar