Markets “In a Nutshell” for January 13, 2021
Investment Week at a Glance
Stocks finished up for the week. The Dow Jones Industrial Average was up 1.61%, the S&P 500 rose 1.83%, the New York Stock Exchange Composite (2,000 stocks) rose 3.04% and the average investors index (Value Line Index) was up 4.57%. Foreign stocks (DJ Global ex U.S.) were up 3.51%. Bond prices were lower for the week, with the 10-year U.S. Treasury ending the week 20 basis points higher at 1.13%. (Data source: Wall Street Journal)
Stocks Continue to Rise
Stocks finished the week broadly higher as political turmoil and the results of the Georgia senate elections dominated headlines for the week. The only news that seemed to matter to markets though was the much higher chance of another stimulus bill now that Democrats have effective control of the House, Senate and Presidency. There are little details so far on any potential bill, but it is expected to be much a much higher price tag than the bill just passed at the end of 2020 and may even be bigger than the CARES Act from March. Yields on bonds soared on the results of the elections, with fears of inflation becoming more real, although runaway inflation still seems unlikely in the near future. While government aid would be welcome to many who continue to deeply affected by the pandemic and the economic consequences, a full reopening of the economy may be the biggest stimulus that the country could receive, whenever that time may come. (Barron’s)
Jobs Lost in December
The Bureau of Labor Statistics released the jobs report for December and reported a loss of 140,000 jobs for the month of December, the first loss of jobs in the labor market since April. Most affected were the workers in the leisure, hospitality and personal services industries, where 580,000 workers were pushed out of jobs. A deep job loss was expected for this group as December brought worse weather and more government restrictions, but the report still highlighted the need for some assistance for workers entering unemployment. One piece of good news from the report came from a survey of workers, where more workers now believe they have a job to go back to in the coming months and the number of permanent job losses is starting to decrease. This figure has been rising relentlessly since March and a reversal of that trend spells good news to workers outside of the most deeply affected sectors. (Barron’s)
Japan’s major stock market index, the Nikkei 225, hit its highest level since which year?
Have a Great Week!
4. The Nikkei 225 hit its highest level since August of 1990 on Friday. (Barron’s).