Stocks surged last week, ignited by another COVID-19 vaccine announcement, encouraging economic data, and the easing of political uncertainty.
The Dow Jones Industrial Average rose 2.21%, while the Standard & Poor’s 500 added 2.27%. The Nasdaq Composite index, which has led all year, gained 2.96%. The MSCI EAFE index, which tracks developed overseas stock markets, climbed 1.54%.1,2,3
Dow Breaks 30,000
For the third consecutive week, markets opened on Monday to yet another announcement of a potential COVID-19 vaccine.
Stock prices found additional support on news that President-elect Biden would be nominating Janet Yellen, the former Chair of the Federal Reserve, to be Secretary of the Treasury. Investors reacted well to the choice, encouraged by her previously voiced support for greater fiscal stimulus and relieved that a candidate less antagonistic to the industry was selected.
Positive momentum continued into the following day, driving the Dow Jones Industrial Average, S&P 500 index, and the Russell 2000 to record high levels, with the Dow closing above the 30,000 milestone.4
Stocks eased off their highs in pre-Thanksgiving trading, though they recovered some of those losses on Friday, as the S&P 500 and NASDAQ Composite closed with fresh record highs.5
A Microcosm of the Economy
The economic outlook has been difficult to figure out due to conflicting signals. One day it’s a historic jump in economic growth; another day it’s a record high in new COVID-19 infections. Last week was a good illustration of this. Reports of healthy consumer spending, a solid rise in durable goods orders, and sales of new homes remaining near almost-14-year highs were balanced by a jump in new jobless claims, a decline in household income, and new state and local COVID-related restrictions.6
Last week investors chose to see the glass half full and look past the near-term challenges the economy faces.
This Week: Key Economic Data
Tuesday: Institute for Supply Management (ISM) Manufacturing Index.
Wednesday: Automated Data Processing (ADP) Employment Report.
Thursday: Jobless Claims, Institute for Supply Management (ISM) Services Index.
Friday: Employment Situation, Factory Orders.
Source: Econoday, November 27, 2020
This Week: Companies Reporting Earnings
Monday: Zoom Video Communications (ZM)
Tuesday: Salesforce.com (CRM)
Wednesday: Splunk (SPLK), Snowflake, Inc. (SNOW), Crowdstrike Holdings (CRWD)
Thursday: Marvell Technologies (MRVL), Dollar General (DG), Docusign (DOCU)
Source: Zacks, November 27, 2020
“The need for mystery is greater than the need for an answer.”
– Ken Kesey
Stay Safe While Shopping Online
While online shopping can be a convenient way to do your holiday shopping, it’s important to keep your information safe. Here are some tips from the IRS to help.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS7
Give a Homemade Gift This Holiday Season
With all the buzz surrounding online shopping, it may seem like Black Friday and Cyber Monday deals are the only option for holiday gifts. But, if you want to avoid the crazes at the mall and online and want to give a unique, meaningful gift, look no further than a homemade craft.
Even if you aren’t particularly crafty, some of these options are easy to make and will be a special gift for a loved one:
Tip adapted from The Spruce Crafts8
You heard me before, yet you hear me once more. Then I die 'til you call me again. What am I?
Last week’s riddle: What five letters (with no letters used more than once) can be arranged in three ways to make three separate words - the first with one syllable, the second with two syllables, the third with three syllables? Answer: AIDES - 1 syllable, ASIDE - 2 syllables, IDEAS - 3 syllables.
Sunrise at Beaver Falls, Ketchikan, Alaska.
Footnotes and Sources
1. The Wall Street Journal, November 27, 2020
2. The Wall Street Journal, November 27, 2020
3. The Wall Street Journal, November 27, 2020
4. CNBC, November 24, 2020
5. The Wall Street Journal, November 27, 2020
6. The Wall Street Journal, November 25, 2020
7. IRS.gov, December 18, 2017
8. Thesprucecrafts.com, November 25, 2020
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.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
Please consult your financial professional for additional information.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
Copyright 2020 FMG Suite.
Weekly Market Insights: Dow Hits 30,000
November 30, 2020