The Week on Wall Street
News of a COVID-19 vaccine ignited a rally in economically sensitive stocks and a broad retreat in technology companies last week, though enthusiasm was tempered by reports of rising new infections and fresh lockdowns.
The Dow Jones Industrial Average surged 4.08%, while the Standard & Poor’s 500 rose 2.16%. The Nasdaq Composite index fell 0.55% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, jumped 4.01%. , ,
Reports of an effective COVID-19 vaccine sent stocks soaring on Monday as the end to economic uncertainty appeared to be in sight. Stocks that had been pummeled by economic lockdowns surged on the news, while the stay-at-home stocks suffered steep declines. Bond yields and oil prices both moved higher on expectations of increased economic activity.
Market enthusiasm evaporated in the days that followed, however, as higher COVID-19 infections, new lockdowns, and low expectations for a new fiscal stimulus package dampened the optimism brought on by the pending vaccine.
Stocks closed the week on a higher note, with cyclical stocks adding to their gains and technology companies shaving part of their losses.
Market Drivers to Watch
The four main drivers for the market recovery heading into year-end 2020 remain fiscal stimulus, monetary stimulus, economic recovery and medical advances.
The Fed remains an active bond buyer and remains poised to do whatever it takes to ensure liquidity across the crisis, even allowing for inflation to drift about its 2% target.
The $2 trillion stimulus from the CARES act delivered enhanced unemployment benefits, stimulus capital and dependent child credits to individuals while the PPP loan programs helped small businesses during the economic shutdown. Now we’re looking for a path forward on a second round of much needed stimulus to get through the resurgence of the virus keeping businesses viable through the season.
As the Q4 began, daily new infections have grown to 100,000, highlighting the need for a vaccine, which seems to be on a timeline for a mid-2021 distribution.
THIS WEEK: KEY ECONOMIC DATA
Tuesday: Retail Sales.
Wednesday: Housing Starts.
Thursday: Existing Home Sales, Jobless Claims, Index of Leading Economic Indicators.
Source: Econoday, November 13, 2020
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
THIS WEEK: COMPANIES REPORTING EARNINGS
Monday: Palo Alto Networks (PANW), Tyson Foods, Inc. (TSN), JD.com, Inc. (JD)
Tuesday: Walmart (WMT), The Home Depot (HD)
Wednesday: Nvidia Corp. (NVDA), Target Corp. (TGT), Lowe’s Companies (LOW), The TJX Companies (TJX)
Thursday: Workday, Inc. (WDAY), Ross Stores (ROST), Intuit (INTU), Netease, Inc. (NTES)
Source: Zacks, November 13, 2020
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
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