Weekly Market Commentary 11/27/2020
-Darren Leavitt, CFA
US financial Markets hit all-time highs during the week, with the Dow surpassing the 30,000 Marc for the first time. If Markets can hold on to gains in Monday’s trading session, it will become the best November for Market returns since 1928. Value-oriented cyclicals continued to lead the rally, with the energy and financial sectors posting gains of 8.6% and 4.6%, respectively. Catalysts included the GSA or General Services Administration acknowledging President-Elect Biden and making funds available to his team to start his transition to the presidency.
Biden also announced key figures to his administration, including Janet Yellen, former Federal Reserve President, to be Treasury Secretary. Additional news on the progress for a vaccine and therapies to combat Covid-19 also provided a lift. Astra Zeneca announced its trial had been 90% effective. However, later in the week, the company admitted they had some errors within their trial related to manufacturing and dosing, which will likely cause the vaccine approval to be delayed. Regeneron’s antibody cocktail received emergency use approval from the FDA, which had been widely expected. There are currently ~62 million confirmed cases in Covid-19 globally, with 1.454 million deaths. Additional lockdown measures continue to occur across several geographies, but many news reports suggest a vaccine will become available by year-end.
For the week, the S&P 500 gained 2.3%, the Dow added 2.2%, the NASDAQ tacked on 3%, and the Russell 2000 led again with a gain of 3.9%. The action in US Treasuries was somewhat muted in the holiday-shortened week. The 2-year yield was unchanged at 0.15%, while the 10-year bond yield increased by one basis point to close at 0.84%. West Texas Intermediate crude continued to rally, gaining $3.29 or 7% to close at $45.46. Of note, there will be an OPEC meeting in the coming week where continued production limits will be discussed. Gold continued its descent, losing 4.7% or $89.3 to close at $1783.60 an Oz. Interestingly, Bitcoin traded north of $19,000 but subsequently sold off more than 18% before stabilizing. There were no changes to our models last week.
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