Markets “In a Nutshell” for November 24, 2020
Investment Week at a Glance
Stocks finished mixed for the week. The Dow Jones Industrial Average was down 0.73%, the S&P 500 fell 0.77%, the New York Stock Exchange Composite (2,000 stocks) rose 0.48% and the average investors index (Value Line Index) was up 2.08%. Foreign stocks (DJ Global ex U.S.) were up 2.01%. Bond prices were higher for the week, with the 10-year U.S. Treasury ending the week 6 basis points lower at 0.83%. (Data source: Wall Street Journal)
More Positive Vaccine News
Stocks had a less impressive week compared to the past week, even though more evidence is presenting itself for an improved economy in 2021. More positive vaccine news came from pharmaceutical company, Moderna, on Monday last week, reporting a 95% effectiveness in preventing the virus and giving the world two likely solutions to the COVID-19 pandemic. The overhanging issue now is for the economy to reach the point where there is no virus and last week proved it won’t be that simple to cross that bridge. After stocks reacted positively to the vaccine news early in the week, they fell later on after economic reports of falling consumer spending and a surprise rise in initial unemployment claims. Time is clearly of the essence for normal activity to resume as an already decelerating recovery is being threatened by another devastating slowdown. (Barron’s)
International Stocks Poised to Grow
In the cover story of this week’s Barron’s magazine, international stocks are the focus of the conversation regarding what may outperform in 2021 and beyond. The world, after removing the U.S., accounts for 96% of the world’s population and 85% of all economic activity, but has been a laggard in producing investment returns, with the stocks outside the U.S. returning only 4.7% annually compared to the S&P 500’s 14% annualized return over the past decade. International stocks have underperformed the U.S. for a myriad of reasons, spanning from political instability to poor economic policies, but coming out of the pandemic, most international stocks are undeniably cheaper when compared to their U.S. counterparts and present very similar growth opportunities. Asian countries in particular are the closest in the world to returning to a more normalized economic world, while European countries have begun to move past the political woes faced over the past several years. (Barron’s)
How many of the 11 sectors in the S&P 500 have a negative return so far for the year of 2020?
Have a Great Week!
4. 3 sectors in the S&P 500 have a negative return for the year: Energy, Financials and Real Estate. (Morningstar).