Winthrop Partners Economic Update 1-11-2021

The Markets (as of market close January 8, 2021)

Last Monday, stocks began the new year down on worries over the Georgia runoff elections, a surge in COVID-19 cases, and evidence that a new strain of the virus has entered the country. The S&P 500, the Nasdaq, and the Russell 2000 each fell 1.5%. The Dow declined 1.3% and the Global Dow dropped 0.5%. Treasury yields and the dollar were mixed, and crude oil prices fell. Some sectors took heavy losses last Monday, including real estate, utilities, industrials, information technology, communication services, and financials.

Stocks recovered last Tuesday, spurred by cyclicals and small caps. The Russell 2000 led the surge, advancing 1.7%, followed by the Nasdaq (1.0%), the Global Dow (0.9%), the S&P 500 (0.7%), and the Dow (0.6%). Treasury yields and crude oil prices rose, while the dollar slipped. Most of the market sectors gained, with energy posting the largest advance, climbing 4.5% on the day.

Wednesday the certification of the presidential electionwas interrupted. Nevertheless, equities posted solid gains by day’s end, led by the small caps of the Russell 2000, which vaulted 4.0% on the heels of a 1.7% jump the prior day. Only the Nasdaq lost ground, falling 0.6% as tech shares lagged. The Global Dow advanced 2.1%, the Dow climbed 1.4%, and the S&P 500 rose 0.6%. The 10-year Treasury yield surpassed 1.0% for the first time since last March. Crude oil prices rose above $50 per barrel, while the dollar was mixed.

Last Thursday, stocks continued to advance, apparently unaffected by the events of the prior day. Investors pinned their hopes of a speedier economic recovery on additional stimulus and increased vaccines. The tech stocks of the Nasdaq recovered from Wednesday’s losses to post a solid 2.6% gain last Thursday. The small caps of the Russell 2000 continued to surge, advancing 1.9%, followed by the S&P 500 (1.5%), the Global Dow (1.0%), and the Dow (0.7%). The yields on 10-year Treasuries rose last Thursday, as did crude oil prices and the dollar. Information technology, consumer discretionary, energy, financials, and communication services were the top-performing sectors by the end of the day.

Last Friday proved to be another banner day for equities as each of the benchmark indexes posted gains, except for the small caps of the Russell 2000, which fell 0.3%.

The Nasdaq jumped 1.0%, followed by the S&P 500 (0.6%), the Global Dow (0.3%),
and the Dow (0.2%). Treasury yields, crude oil prices, and the dollar advanced.

Consumer discretionary and real estate led the sectors.

Stocks climbed to all-time highs last week as investors latched on to President-elect Joe
Biden’s statement that he’d push for trillions of dollars in further aid and stimulus. The
market’s strong performance came despite a poor jobs report for December (see
below), which highlighted the impact of surging COVID-19 cases while adding incentive
for more stimulus. By the end of last week, the Russell 2000 gained nearly 6.0%,
followed by the Global Dow, the Nasdaq, the S&P 500, and the Dow. Crude oil prices
pushed above $50 per barrel after climbing more than 8.5% for the week. The dollar
inched up by a quarter of a percent, while gold prices fell by the end of the week.

The national average retail price for regular gasoline was $2.249 per gallon on January
4, $0.006 higher than the prior week’s price but $0.329 less than a year ago. The
highest regular gas prices on January 4 were in California ($3.10), Massachusetts
($2.22), and New York ($2.21).  Please click here for the entire Update Winthrop Partners Economic Update 1-11-2021