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Weekly Market Insights

The Markets (as of market close November 20, 2020)

Last week began with more good news on another COVID-19 vaccine, sparking a rally in domestic and global stocks. The Dow set a record as it neared the 30,000 mark, with cyclicals and small caps advancing on hopes of a speedier economic recovery. The Russell 2000 and the Global Dow each gained more than 2.0%, while both the Dow and the S&P 500 added more than 1.0%. The Nasdaq advanced 0.8%. Among the market sectors, energy, financials, and industrials surged. Crude oil prices and Treasury yields climbed, while the dollar slipped.

Stocks closed lower last Tuesday, paring record-high gains from the previous day. Only the Russell 2000 (0.4%) and the Global Dow (0.1%) advanced. The Dow (-0.6%), the S&P 500 (-0.5%), and the Nasdaq (-0.2%) lost value. Treasury bond prices climbed, sending yields lower. Crude oil prices rose, while the dollar fell. A surge in COVID-19 cases and hospitalizations overshadowed encouraging vaccine developments. In response to elevated virus numbers, several states imposed new restrictions on gatherings. Federal Reserve Chair Jerome Powell said last Tuesday that the rising number of COVID-19 cases is a big concern, and the economy will need additional fiscal and monetary policy support. Among the major market sectors, only energy and real estate posted gains.

Last Wednesday, new COVID-19-related restrictions aimed at slowing the spread of the virus eclipsed news that progress is speeding up on a vaccine. The Russell 2000 fell 1.3%, followed by the Dow and the S&P 500, each of which dropped 1.2%. The Nasdaq lost 0.8% and the Global Dow dipped 0.5%. Treasury yields and crude oil prices climbed, while the dollar approached its lowest level in nearly two years. Each of the major market sectors lost value, with energy, consumer staples, health care, real estate, and utilities the hardest hit.

Mega-caps and tech shares pushed stocks higher last Thursday, despite rising COVID-19 virus cases here and around the world. Several states and countries have tightened restrictions in response. A report that fiscal stimulus talks would resume may have helped the market as well. Of the indexes listed here, only the Global Dow lost value. The Nasdaq (0.9%), the Russell 2000 (0.8%), the S&P 500 (0.4%), and the Dow (0.2%) each edged higher. Crude oil prices rose, while the dollar and Treasury yields declined.

Stocks were mixed last Friday, with the Global Dow and the Russell 2000 essentially breaking even, while the Dow, the S&P 500, and the Nasdaq lost value. Investors weighed reports of an application for emergency approval of a COVID-19 vaccine against the possibility of further restrictions, shutdowns, and layoffs. Of the major market sectors, only utilities inched ahead. Information technology, financials, and industrials lost the most by the end of the day. Crude oil prices rose, Treasury yields fell, and the dollar was mixed.

By the end of last week, the small caps of the Russell 2000 and the Global Dow posted notable gains, the Nasdaq inched ahead, while the Dow and the S&P 500 each fell nearly 0.8%. However, following last week's performance, the Global Dow has joined the other benchmark indexes listed here in surpassing their respective 2019 closing values.

Crude oil prices advanced, closing at $42.17 per barrel by late Friday afternoon, up from the prior week's price of $40.20 per barrel. The price of gold (COMEX) slipped again last week, closing at $1,869.40, down from the prior week's price of $1,886.70. The national average retail price for regular gasoline was $2.111 per gallon on November 16, $0.015 greater than the prior week's price but $0.481 less than a year ago.

Market/Index

2019 Close

Prior Week

As of 11/20

Weekly Change

YTD Change

DJIA

28,538.44

 29,479.81 29,263.48

-0.73%

2.54%

Nasdaq

8,972.60

11,829.29 11,854.97 0.22%  32.12%

S&P 500

3,230.78

3,585.15

3,557.54

-0.77% 10.11%

Russell 2000

1,668.47

1,744.04

1,785.34 2.37%
7.00%

Global Dow

3,251.24 3,249.33 3,293.16
1.35% 1.29%

Fed. Funds target rate

1.50%–1.75%

0.00%–0.25%

0.00%–0.25%

 0 bps

-150 bps

10-year Treasuries

1.91%

0.89%

0.82%

-7 bps

-109 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • Sales of existing homes grew for the fifth consecutive month in October, climbing 4.3% from September. For the last 12 months ended in October, sales of existing homes are up 26.6%. These increases have occurred despite high unemployment relative to pre-pandemic levels. The median existing home price in October was $313,000, up from the September price of $311,800 and well ahead of the October 2019 median sales price of $271,100. Total housing inventory fell 2.7% in October from September and sits at an all-time low supply of 2.5 months at the current sales pace. Sales of single-family homes also increased by 4.1% last month and 26.7% over the last 12 months. The median existing single-family home price in October was $317,700, higher than the September price of $316,200.
  • Sales at the retail level increased 0.3% in October from the previous month and 5.7% above October 2019. Retail trade sales also rose 0.3% in October. Retailers that enjoyed a surge in sales include nonstore (online) retail sellers (+29.1%), building material and garden equipment and supplies dealers (+13.2%), and food and beverage stores (+12.0%). Retail businesses that saw sales curtailed last month include electronics and appliance stores (-14.6%), gasoline stations (-16.1%), clothing and clothing accessories stores (-30.0%), and food services and drinking places (-19.3%).
  • Import prices fell 0.1% in October, the first decline since April. Despite the October decline, import prices are up 1.0% for the 12 months ended in October. Fuel imports continued to decrease, dropping 1.9% in October after a 5.2% decline in September. Prices for fuel imports fell 27.4% for the year ended in October. Import prices excluding fuel rose 0.1% last month after a 0.5% increase in September. Export prices increased 0.2% in October, the fourth consecutive month of increases. Higher agricultural export prices drove the increase as nonagricultural exports were unchanged. Even with the increase, export prices declined 1.6% for the year ended in October.
  • According to the latest report from the Federal Reserve, industrial production rose 1.1% in October, recovering much of its 16.5% decline from February to April. After edging up 0.1% in September, manufacturing output advanced 1.0% last month, although it remains 5.6% below its February level. Utilities output rose 3.9%, while the output for mines fell 0.6%. Total industrial production was 5.3% lower in October than it was a year earlier.
  • The housing sector continued to show strength in October. Housing starts rose 4.9% last month, and single-family housing starts increased 6.4%. Housing completions slowed in October, dropping 4.5% from September's rate, while the number of building permits issued was virtually unchanged.
  • For the week ended November 14, there were 742,000 new claims for unemployment insurance, an increase of 31,000 from the previous week's level, which was revised up by 2,000. According to the Department of Labor, the advance rate for insured unemployment claims was 4.3% for the week ended November 7, a decrease of 0.3 percentage point from the prior week's rate. For comparison, during the same period last year, there were 232,000 initial claims for unemployment insurance, and the insured unemployment claims rate was 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended November 7 was 6,372,000, a decrease of 429,000 from the prior week's level, which was revised up by 15,000. The highest insured unemployment rates in the week ended October 31 were in Hawaii (8.3%), California (8.3%), New Mexico (8.0%), and Nevada (7.6%). The largest increases in initial claims for the week ended November 7 were in Washington (+7,683), California (+5,293), Massachusetts (+3,383), Alabama (+1,704), and Louisiana (+1,626). States with the largest decreases were in Georgia (-13,426), Illinois (-6,357), Kentucky (-4,830), and Texas (-3,934).

Eye on the Week Ahead

Thanksgiving week is filled with important reports, which will give a final picture of the state of the economy in October. The second iteration of the third-quarter gross domestic product is out this week. The first estimate showed the economy flipped from a second-quarter estimate of -31.4% to a 33.1% growth rate in the third quarter. Orders for durable goods have risen for five consecutive months through September and are expected to advance again in October. Sales of new, single-family homes slowed in September, while existing home sales continued to soar. The October numbers are expected to reverse course for new home sales and come in higher than in September. Finally, an important indicator of inflation, the personal income and outlays report, revealed that inflation at the consumer level has been muted for much of the year, advancing at a rate of 1.4% through September. October's estimate is expected to remain at that same level.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Market summaries contain information on the Dow, S&P 500, NASDAQ, Russell 2000, Global Dow, Federal Funds interest rate, and 10-year Treasury yields, as well as highlights of past and future economic data.

The Markets (as of market close November 13, 2020)

Stocks soared to record highs last Monday following an announcement from a major pharmaceutical company of positive data on a COVID-19 vaccine. That news, coupled with President-elect Joe Biden's win, helped buoy investor optimism. Cyclicals and bio-tech stocks led a powerful rally, which drove the Dow up 3.0%. The S&P 500 added 1.2%, the Russell 2000 climbed a robust 3.7%, and the Global Dow shot up 4.2%. The Nasdaq lost value as money moved from tech stocks to value shares. Energy shares jumped more than 14%, while financials advanced more than 8.0%. Crude oil prices, the dollar, and Treasury yields all rose.

Market returns were mixed last Tuesday with the Nasdaq and the S&P 500 losing value, while the Dow, the Russell 2000, and the Global Dow continued to surge. Bond prices fell, sending Treasury yields higher. Crude oil prices and the dollar each rose for the second consecutive day. Weakness in mega-caps and tech stocks offset strength in cyclicals and value stocks. Among the market sectors, utilities, industrials, energy, and consumer staples pushed higher.

By the end of trading last Wednesday, the Nasdaq posted a gain for the first time in the last three sessions. The tech-heavy index climbed 2.0%, followed by the S&P 500 (0.8%), and the Global Dow (0.2%). The Dow and the Russell 2000 moved little. Crude oil prices and the dollar rose, while Treasury yields fell. Technology led the sectors, followed by consumer discretionary. Energy, industrials, and financials fell.

Surging COVID-19 cases prompted a sell-off last Thursday as each of the benchmark indexes listed here lost value. Treasury yields plunged and crude oil prices sank, while the dollar rose. All of the market sectors lost value, with energy and materials tumbling the most. Along with news of advancing virus cases, investors were hit with the prospects of tighter pandemic-related restrictions, continued wrangling over fiscal stimulus, and worsening relations between the United States and China.

Stocks closed the week on a high note as cyclicals and value stocks prevailed over tech shares. The Dow and the S&P 500 each gained 1.4%, the Global Dow rose 1.1%, and the Nasdaq gained 1.0%. The big winner last Friday was the Russell 2000, which vaulted 2.1% on the day. Crude oil prices and the dollar declined, while Treasury yields gained nearly 1.0%. While each of the major market sectors advanced, the market was led by energy, real estate, and industrials. Tech shares gained less than 1.0%.

The indexes posted notable gains for the second consecutive week as both the S&P 500 and the Russell 2000 rallied to all-time highs. The Dow advanced to its pre-pandemic level. The Nasdaq, which had been a consistent gainer through much of the year, was the only major benchmark to lose value, as investors pulled away from tech stocks and moved to shares influenced by changes in the overall economy. News that caccine test results were in the 90% efficacy range outweighed mounting COVID-19 cases. For the first time since late January, all but one of the indexes listed here were ahead of their respective 2019 year-end closing values, and the Russell 2000 was only 0.06 percentage point away.

Crude oil prices advanced for the second consecutive week, closing at $40.20 per barrel by late Friday afternoon, up from the prior week's price of $37.39 per barrel. The price of gold (COMEX) closed the week at $1,886.70, down from the prior week's price of $1,953.10. The national average retail price for regular gasoline was $2.096 per gallon on November 9, $0.016 lower than the prior week's price and $0.519 less than a year ago.

Market/Index

2019 Close

Prior Week

As of 11/13

Weekly Change

YTD Change

DJIA

28,538.44

 28,323.40 29,479.81

4.08%

3.30%

Nasdaq

8,972.60

11,895.23 11,829.29 -0.55% 31.84%

S&P 500

3,230.78

3,509.44

3,585.15

2.16% 10.97%

Russell 2000

1,668.47

1,644.16

1,744.04 6.07%
4.53%

Global Dow

3,251.24 3,073.02 3,249.33
5.74% -0.06%

Fed. Funds target rate

1.50%–1.75%

0.00%–0.25%

0.00%–0.25%

 0 bps

-150 bps

10-year Treasuries

1.91%

0.86%

0.89%

3 bps

-102 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week's Economic Headlines

  • The Consumer Price Index was unchanged in October after advancing 0.2% in September. Over the past 12 months, the CPI has increased 1.2%. Within the index, food (0.2%), energy (0.1%), and shelter (0.1%) inched up. Offsetting those gains were declines in used cars and trucks (-0.1%), apparel (-1.2%), medical care commodities (-0.8%), and medical care services (-0.3%).
  • Prices at the producer level advanced 0.3% in October after climbing 0.4% in September. For the last 12 months ended in October, producer prices are up 0.5%, the largest advance since moving up 1.1% for the 12 months ended in February. However, when excluding food and energy, producer prices are up 1.1% year over year. In October, nearly 60% of the rise in producer prices can be traced to a 0.5% increase in prices for goods. The prices for services moved up 0.2%. Food prices vaulted 2.4% last month, and energy prices increased 0.8%. Trade services rose 0.2%, while transportation and warehousing services advanced 1.1%.
  • October, the first month of the federal government's fiscal year 2021, saw a deficit of $284.1 billion. By comparison, the deficit in October 2019, at $134.5 billion, was 111% lower. Government receipts for the month totaled $237.7 billion, or 3% lower than receipts this time last year. Government outlays were $521.8 billion, 37% greater than last October.
  • According to the Job Openings and Labor Turnover report for September, the number of job openings increased by 84,000, the number of hires decreased by 81,000, and the number of total separations fell by 25,000. The job openings rate was unchanged at 4.3%. The number of job openings decreased over the year to 6.6 million (-566,000), reflecting the continued impact of the COVID-19 pandemic on the labor market. Over the 12 months ended in September, hires totaled 70.4 million and separations totaled 76.4 million, yielding a net employment loss of 6.0 million.
  • For the week ended November 7, there were 709,000 new claims for unemployment insurance, a decrease of 48,000 from the previous week's level, which was revised up by 6,000. According to the Department of Labor, the advance rate for insured unemployment claims was 4.6% for the week ended October 31, a decrease of 0.3 percentage point from the prior week's rate. For comparison, during the same period last year, there were 222,000 initial claims for unemployment insurance, and the insured unemployment claims rate was 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended October 31 was 6,786,000, a decrease of 436,000 from the prior week's level, which was revised down by 63,000. The highest insured unemployment rates in the week ended October 24 were in Hawaii (9.9%), California (8.9%), New Mexico (8.5%), and Nevada (8.2%). The largest increases in initial claims for the week ended October 31 were in Illinois (+20,377), Kentucky (+3,868), Pennsylvania (+3,768), Ohio (+3,766), and Kansas (+2,711), while the largest decreases were in Massachusetts (-8,470), Georgia (-6,442), New York (-5,883), Michigan (-3,067), and New Jersey (-2,500).

Eye on the Week Ahead

Housing, retail, and industrial production are economic sectors in the news this week. October reports on housing starts and existing home sales are expected to reveal continued strength in the housing sector. Industrial production scaled back a bit in September following a robust August. October's figures should show continued growth, but at a slower pace. The October retail sales report is out this week. Sales at the retail level advanced nearly 2.0% in September and could continue to climb as more businesses reopen following pandemic-related shutdowns.

Data sources: Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment. 

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. Market summaries contain information on the Dow, S&P 500, NASDAQ, Russell 2000, Global Dow, Federal Funds interest rate, and 10-year Treasury yields, as well as highlights of past and future economic data.

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