Winthrop Partners Update 11-9-2020

The Markets (as of market close November 6, 2020)

Stocks rebounded last Monday with each of the benchmark indexes gaining value, led by the Russell 2000, which added 2.0%, followed by the Global Dow, the Dow, the S&P 500, and the Nasdaq. Treasury yields fell while the dollar and crude oil prices advanced. It is unclear what drove the market uptick. Some analysts suggest investors may see fiscal relief coming shortly after the election, while others proffer that the market gains were nothing more than dip-buying following last week’s selloff. Each of the major market sectors ended the day in the black, with energy and materials each advancing more than 3.0%.

Equities continued to rally last Tuesday. Election day saw the small caps of the Russell 2000 jump over 3.0% while each of the other benchmark indexes gained at least 1.8%. Treasury yields climbed nearly 4.0% as banks and financials posted solid gains. Crude oil prices advanced 2.9%, but remain below $40 per barrel. The dollar weakened. Although crude oil prices rose, overall energy was the only major sector to lose value last Tuesday. In addition to financials, consumer discretionary and industrials each gained more than 2.0% on the day.

Communication services, technology, health care, and consumer discretionary sectors posted robust gains, pushing market indexes higher last Wednesday. Although the election had yet to be officially decided, investors may be anticipating a fiscal stimulus package, which would provide more resources for investment. The Nasdaq was the big winner, gaining 3.9% on the day, followed by the S&P 500 (2.2%), the Dow (1.6%), the Global Dow (0.6%), and the Russell 2000 (0.05%). Treasury yields and the dollar dropped, while crude oil prices advanced for the third consecutive day.

The market continued to rally last Thursday. The S&P 500 climbed 2.0% and was on track for its best week since April. Tech stocks surged, pushing the Nasdaq ahead 2.6% on the day and more than 9.0% for the week. The Russell 2000 led the pack, advancing 2.8% by the end of trading. Globally, stocks also posted notable gains, driving the Global Dow up 2.1%. Treasury prices fell, moving yields higher. Crude oil prices sank and the dollar fell to its lowest level in more than two years. Among the market sectors, only energy lost, while technology and materials gained 3.1% and 4.1%, respectively.

Stocks were flat to close out the week, with the Global Dow and the Nasdaq posting modest gains, while the remaining benchmark indexes listed here lost value. Among the market sectors, information technology, consumer staples, health care, industrials, and materials advanced marginally. Energy dropped 2.1%. Crude oil and the dollar fell, while Treasury yields advanced.
Despite last Friday’s tepid returns, stocks enjoyed their best week since April. Investors may have been anticipating that former Vice President Joe Biden would win the presidential election and Republicans would maintain control of the Senate. This scenario might lead to additional fiscal stimulus but marginal tax increases, if any. While this is purely speculation, it could have been enough to drive investors to stocks last week. The tech-heavy Nasdaq gained 9.0%, followed by the S&P 500, the Dow, the Russell 2000, and the Global Dow. Year to date, The Nasdaq is more than 32.0% above last year’s closing value, while the S&P 500 is more than 8.6% ahead. The Dow has again come within 1.0 percentage point of hitting its 2019 closing mark as the indexes continue to push ahead following the COVID-19 downturn.

Crude oil prices advanced last week, closing at $37.39 per barrel by late Friday afternoon, up from the prior week’s price of $35.61 per barrel. The price of gold (COMEX) closed the week at $1,953.10, up from the prior week’s price of $1,878.00. The national average retail price for regular gasoline was $2.112 per gallon on November 2, $0.031 lower than the prior week’s price and $0.493 less than a year ago. Click here for the complete update: Winthrop Partners Market Update 11-9-2020