Markets “In a Nutshell” for December 16, 2020
Investment Week at a Glance
Stocks finished down for the week. The Dow Jones Industrial Average was down 0.57%, the S&P 500 fell 0.96%, the New York Stock Exchange Composite (2,000 stocks) fell 0.43% and the average investors index (Value Line Index) was down 0.38%. Foreign stocks (DJ Global ex U.S.) were up 0.06%. Bond prices were higher for the week, with the 10-year U.S. Treasury ending the week 7 basis points lower at 0.90%. (Data source: Wall Street Journal)
Stocks Stall After Gains Streak
Stocks sold off last week, even after the S&P 500 hit its 30th all-time high of the year early in the week, after having climbed higher for over a month consistently. Initial unemployment claims rose as more and more areas of the country are imposing restrictions on gatherings and businesses and the effects of those actions are just now beginning to show up in labor data reports. Unemployment claims are still much higher than at any point than the 2008-09 Financial Crisis and have lost most of the positive momentum of the late summer period, sparking fears of a slow recovery throughout 2021. Any economic aid bill remains elusive as the more controversial contents of the bill are holding up an agreement, while the actual dollar amount of roughly $900 billion is largely agreed upon. An agreement looks like it must be reached by this Friday to be able to be passed this year, which may contribute to another volatile week for stocks. (Barron’s)
First Vaccine Approval
The Food and Drug Administration approved the Pfizer/BioNTech Covid-19 vaccine last week, becoming the first vaccine for the virus available in the U.S. Production and plans for distribution of the vaccine have been under way since November and Pfizer believes about 40 million doses will be available in December of this year and enough to provide doses to anyone in America by middle of the year. How this affects the economy and stocks from here is still widely disputed, with much of the economic damage already done and only slowly getting better. Stocks on the other hand are more directly benefiting from the low interest rates that look to prop up valuations for years to come. A second vaccine from Moderna is expected to be approved this week as well and is poised to strengthen the case that the pandemic can be put to an end in 2021 and allow the world to begin the stages of building back the global economy. (Barron’s)
How much did online vacation rental company, Airbnb, rise in its first day of public trading after its IPO?
Have a Great Week!
4. Airbnb rose 113% in its first day of public trading, rising to a market value of just over $100 billion. (Barron’s).