Todd’s Take on the Market
Global stock markets continued their 2020 rally on the prospect of a more aggressive U.S. fiscal policy under a new Biden administration. The S&P 500 shrugged off violence at the Capitol and ended at a record-high level of 3824.68, rising 1.88% for the week. The Dow rose 1.66% and the NASDAQ rose 2.45%. Strength continued outside the U.S. as well. The FTSE 100 soared to the highest level since March, rising 6.40% for the week. Similarly, Euro STOXX 600 ended higher at 3.06%.
Job creation came to a screeching halt in December as restrictions brought on by surging COVID-19 cases hammered virus-sensitive industries, particularly bars and restaurants, which lost nearly half a million positions for the month. ADP reports job losses of 123,000 by businesses last month. Wall Street was expecting a gain of 120,000. Markets, however, shrugged off the report, likely on the anticipation that it strengthened the case for more stimulus from Congress and reflected a likely temporary reduction in jobs that would be reversed as COVID vaccine distribution accelerated. Stocks were poised for a modest gain at the open.
The 10-Year Treasury Yield Hit 1% for the first time since March, climbing to a high of 1.17%—this is not very bond friendly, but the case for more stimulus has pushed it higher.
The consumer price index rose 0.4% in the latest survey, but it is mostly attributed to rising gas prices.
Over the next week, we have a lot of changes coming about, so I would encourage you to stay tuned and we will keep you posted.
Todd Day, MBA
Portfolio Manager
Horizon Financial Services, LLC
