Markets “In a Nutshell” for November 17, 2020
Investment Week at a Glance
Stocks finished up for the week. The Dow Jones Industrial Average was up 4.08%, the S&P 500 rose 2.16%, the New York Stock Exchange Composite (2,000 stocks) rose 4.11% and the average investors index (Value Line Index) was up 6.40%. Foreign stocks (DJ Global ex U.S.) were up 2.67%. Bond prices were lower for the week, with the 10-year U.S. Treasury ending the week 6 basis points higher at 0.89%. (Data source: Wall Street Journal)
Stocks Continue Rise on Vaccine News
Stocks soared broadly across all sectors and styles after pharmaceutical company, Pfizer, along with its vaccine development partner, BioNTech, announced impressive vaccine trial results with a success rate of 90% in preventing the COVID-19 virus. While supplies of the vaccine are understandably limited right now and it is unlikely anyone other than frontline healthcare workers will receive the vaccine in 2020, this was the news everyone in the healthcare community was looking for to move closer to the end of the global pandemic. Emergency use authorization was also granted to an antibody therapy developed by Eli Lilly, continuing the progress towards better treatment of the virus and is increasingly important given the time it will take to produce enough vaccinations, along with the uncertainty of how many people will actually take the vaccine once it is available. (Barron’s)
Value and Growth Trade Off
With growth stocks having wildly outperformed value stocks over the past 4 years, the general expectation amongst investors has been that value will be the clear outperformer once the economy begins to move past the pandemic, but that expectation has proved to be slightly more complicated. At the announcement of the successful vaccine trial on Monday, value stocks soared on the news, while tech stocks actually fell for the day. As the week continued on though, growth and value stocks ended up trading off days in which they outperformed and created a much more uncertain outlook for investors going forward. While value has clearly outperformed growth in recent weeks, the uncertainty is where stocks go from here and whether or not value will be able to hold leadership of the stock market. One much clearer outperformer may be in small cap stocks, which, along with value stocks, also have a persistent history of outperforming coming out of recessions. (Barron’s)
At the job market’s worst point in May, there was a low of 6 million job openings on online recruiting sites, according to Zip Recruiter. How many job openings are available now as of November?
Have a Great Week!
4. Job openings on online sites have nearly doubled since the low in May to a level of 10.8 million, according to Zip Recruiter. (Barron’s).