The Week on Wall Street
Stocks climbed higher amid the
COVID-19 vaccine rollout and an improving outlook for a fiscal stimulus bill.
The Dow Jones Industrial Average, which has lagged all year, gained 0.44%. The Standard & Poor’s 500 picked up 1.25% while the Nasdaq Composite index surged 3.05%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 2.44%.[1][2][3]
Stocks Climb Higher
In a week that celebrated the national rollout of a
COVID-19 vaccine, market enthusiasm was tempered by worries of infection caseload and fresh economic
lockdowns.
Investors turned their focus to the fiscal stimulus negotiations in Washington, D.C., with the hope that a relief bill may be the bridge that gets the economy over its near-term troubles until vaccine distribution grows more widespread.
These negotiations were not smooth sailing. When a compromise bill appeared to gather support, markets quickly moved higher, with the Dow Jones Industrial Average, S&P 500, and NASDAQ Composite all setting new record high closes on Thursday.[4]
Stocks slipped in the final day of trading as stimulus hopes wavered.
Fed Outlook on Economy Improves
The Federal Reserve on Wednesday concluded its
last meeting of the Federal Open Market Committee for 2020. Fed officials provided more detail for its
monthly bond purchase program and reiterated their commitment to a monthly purchase of $120 billion of
Treasury and mortgage-back securities until its inflation and employment goals are met.[5]
The Federal Reserve also raised its outlook on the U.S. economy. It revised its September forecast of a 3.7% decline in GDP in 2020 to a 2.4% decline, and increased its 2021 GDP growth forecast from 4.0% to 4.2%. It also expects unemployment at 2020 year-end would fall to 6.7%, substantially lower than its earlier estimate of 7.6%.[6]
Final Thoughts
Our weekly market commentary will not be published next week. We
would like to take this moment to wish you and your family a safe and joyous holiday season.
THIS WEEK: KEY ECONOMIC DATA
Tuesday: Gross Domestic Product
(GDP), Consumer Confidence, Existing Home Sales.
Wednesday: New Home Sales,
Consumer Sentiment.
Thursday: Durable Goods Orders, Jobless Claims.
Source: Econoday, December 18, 2020
The Econoday economic calendar lists
upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy
meetings, and speaking engagements of Federal Reserve officials. The content is developed from
sources believed to be providing accurate information. The forecasts or forward-looking statements
are based on assumptions and may not materialize. The forecasts also are subject to revision.
THIS WEEK: COMPANIES REPORTING EARNINGS
Tuesday: Cintas
Corporation (CTAS), Carmax, Inc. (KMX)
Wednesday: Paychex, Inc. (PAYX)
Source: Zacks, December 18, 2020
Companies mentioned are for informational
purposes only. It should not be considered a solicitation for the purchase or sale of the
securities. Investing involves risks, and investment decisions should be based on your own goals,
time horizon, and tolerance for risk. The return and principal value of investments will fluctuate
as market conditions change. When sold, investments may be worth more or less than their original
cost. Companies may reschedule when they report earnings without notice.
Investing involves risk including the potential loss of principal. No investment strategy can
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Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political
instability and may not be suitable for all investors.
The Standard & Poor's 500
(S&P 500) is an unmanaged group of securities considered to be representative of the stock
market in general.
The Dow Jones Industrial Average is a price-weighted average of 30
significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by
Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and
similar securities listed on the Nasdaq stock market and is considered a broad indicator of the
performance of stocks of technology companies and growth companies.
The MSCI EAFE Index
was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the
performance in major international equity markets as represented by 21 major MSCI indices from
Europe, Australia, and Southeast Asia.
The 10-year Treasury Note represents debt owed by
the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower,
investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Opinions expressed are subject to change without notice and are not intended as investment advice or
to predict future performance.
Past performance does not guarantee future
results.
You cannot invest directly in an index.
Consult your financial
professional before making any investment decision.
Fixed income investments are subject
to various risks including changes in interest rates, credit quality, inflation risk, market
valuations, prepayments, corporate events, tax ramifications and other factors.
These
are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named
representative, Broker dealer or Investment Advisor and should not be construed as investment
advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax
or legal advice. All information is believed to be from reliable sources; however, we make no
representation as to its completeness or accuracy. Please consult your financial professional for
further information.
The market indexes discussed are unmanaged and generally considered representative of their respective markets. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
- The Wall Street Journal, December 18, 2020
- The Wall Street Journal, December 18, 2020
- The Wall Street Journal, December 18, 2020
- CNBC, December 17, 2020
- The Wall Street Journal, December 16, 2020
- CNBC, December 16,2020