November 9 – November 13 Week in Review
It was mostly a positive week for the markets last week. The S&P 500, up 2.2%, and the Russell 2000, up 6.1%, closed at new record highs. The Dow Jones Industrial Average also finished higher, gaining 4.1%. The Nasdaq Composite couldn’t keep pace and declined 0.6% amid relative weakness in the mega-cap growth and stay at home stocks.
The market brushed aside record daily coronavirus cases and hospitalizations in the U.S. and a warning from Fed Chair Powell that the economy will be challenging for the next few months. Investors and analysts remained bullish however, with Goldman Sachs forecasting the S&P 500 to hit 4,300 by the end of 2021.
Money disproportionately flowed into the economically sensitive stocks on news that the collaborative COVID-19 vaccine from Pfizer and BioNTech was more than 90% effective. Overall the market remained hopeful that a vaccine will help the economy return to pre-pandemic levels in 2021 and instill a sense of normalcy.
On the political front Joe Biden being projected as the winner of the presidential election washed out some uncertainty, although there will be two election runoffs in Georgia on January 5th that will determine if Republicans retain their majority in the Senate.
Notwithstanding the election implications on another round of economic stimulus, the market took the vaccine news as well as one could have hoped with all 11 S&P 500 sectors closing in positive territory.
The energy sector was the standout performer with an impressive 16.5% weekly gain, followed by solid gains in the financials and industrials sectors. On the other hand, the consumer discretionary and information technology sectors underperformed amid profit-taking activity in some of the mega-cap stocks.
In the bond market the 2 year U.S. Treasury yield increased 2 basis points to 0.18% and the 10 year yield increased seven basis points to 0.89% amid renewed selling pressure.
In other markets the U.S. Dollar Index rose slightly to 92.72, WTI crude jumped 8% to $40.12 a barrel helped by the vaccine news and gold fell 3.0% to close at $1,888.20 an ounce.
November 16 – November 20 Economic Calendar