Markets “In a Nutshell” for December 22, 2020
Investment Week at a Glance
Stocks finished up for the week. The Dow Jones Industrial Average was up 0.44%, the S&P 500 rose 1.25 %, the New York Stock Exchange Composite (2,000 stocks) rose 0.78% and the average investors index (Value Line Index) was up 1.42 %. Foreign stocks (DJ Global ex U.S.) were up 1.64 %. Bond prices were lower for the week, with the 10-year U.S. Treasury ending the week 5 basis points higher at 0.95%. (Data source: Wall Street Journal)
Stocks Rise Despite Bad News
Stocks rose for the week despite a flurry of bad news from various economic reports and relentlessly rising COVID-19 cases worldwide. Retail sales for the month of November were reported last week and showed a disappointing drop in consumer spending, the largest and most important component of the U.S. economy. In tandem with the reported fall in spending, initial unemployment claims showed a large rise in U.S. workers seeking financial assistance for the first time, rising to a level that hasn’t been seen in months. All of this poor economic news is to some degree tied to the continued rise in virus cases over the past two months that has led to partial shutdowns in certain areas across the world. (Barron’s)
Second Vaccine Approved
The Food and Drug Administration approved the Moderna vaccine last week, making it the second vaccine approved in the U.S. and is expected to begin being used early this week. This approval has been expected for a number of weeks now, but the importance of its approval meant much more as we learned that other vaccine candidates from GlaxoKlineSmith and Sanofi have hit delays that have temporarily slowed down their progression through the approval process. Moderna expects to provide at least 100 million doses for the U.S., providing a much needed second option to the Pfizer/BioNTech vaccine already in use. (Barron’s)
Relief Bill Almost Agreed Upon
A $900 billion relief bill is nearly completed and is expected to be voted on and passed early this week, along with a full year spending bill to fund Congress. The relief portion of the bill is expected to include support for state and local governments, business liability protection and direct payments to individuals. Whether or not this is the last piece of relief legislation Congress passes remains to be seen, but the $900 billion price tag associated with the bill is much less than the what was previously negotiated before the election, leading many to believe that more stimulus may be in the works when the new government takes over.
How much is the S&P 500 up as of Friday from its low for the year on March 23rd?
Have a Great Week!
3. The S&P 500 is up about 67% since the low point of the market on March 23rd. (Wall Street Journal).