Markets “In a Nutshell” for January 5, 2021
Investment Week at a Glance
Stocks finished up for the week. The Dow Jones Industrial Average was up 1.35%, the S&P 500 rose 1.43%, the New York Stock Exchange Composite (2,000 stocks) rose 0.99% and the average investors index (Value Line Index) was up 0.23%. Foreign stocks (DJ Global ex U.S.) were up 1.68%. Bond prices were higher for the week, with the 10-year U.S. Treasury ending the week 1 basis points lower at 0.93%. (Data source: Wall Street Journal)
Stocks End Year At Highs
Stocks ended the most tumultuous year many people have ever lived through at record highs and showed little sign of slowing down. The S&P 500 ended the year up 16.3%, while the Dow Jones Industrial Average and the Nasdaq ended up 7.2% and 43.6%, respectively. Technology was the biggest beneficiary of the increased demand for remote work and the plummeting of interest rates this year, while many other stocks are still struggling to break even this year. Specifically regarding last week, stocks rose on positive developments on many fronts, with President Trump signing the latest stimulus bill, a third vaccine produced by Astra Zeneca and Oxford being approved for use and a trade deal between the United Kingdom and the European Union was passed, greatly benefiting many international stocks. The new year looks like it will be defined on how quickly and broadly the global economy can return from the COVID-19 pandemic and how the many issues facing the U.S. before the pandemic will be addressed by the new incoming administration. (Barron’s)
Stimulus Deal Signed
Congress and the President were able to come to an agreement after a delay over the weekend to increase direct payments to individuals and signed the new stimulus bill on Monday. The $900 billion deal will provide $600 direct payments to individuals and $1,200 to couples under certain income limits, increase federal unemployment benefits and small business aid through the Paycheck Protection Program. While many have seen the need for this bill since the end of the summer, this aid will certainly still give a government infused boost to the economy that can temporarily continue to keep individuals and businesses afloat. While more stimulus could be possible in a new administration, it would likely take much time, meaning the most important thing to monitor for the economy at this point is the labor market and creating new jobs. (Wall Street Journal)
What was the best performing stock in the S&P 500 for the year of 2020?
Have a Great Week!
1. Tesla was the best performing stock, skyrocketing 743% for the year. (Barron’s).