The Week on Wall Street
Stocks soared last week as investors
anticipated that a split Congress would raise legislative hurdles to changing corporate taxes and
adjusting regulatory oversight of big technology companies.
The Dow Jones Industrial Average jumped 6.87%, while the Standard & Poor’s 500 tacked on
7.32%. The Nasdaq Composite index surged 9.01% for the week. The MSCI EAFE index, which tracks
developed overseas stock markets, rose 7.65%.[1][2][3]
Bulls Take Charge
Coming off a poor close to October, stocks surged throughout
election week, jumping higher in pre-election trading on bargain hunting and strong factory activity.
The rally picked up steam as Americans went to the polls and shifted into overdrive Wednesday morning.
Investors were buoyed by Congressional results that indicate that the next president would have to work with a divided Congress. Though a divided Congress might result in a smaller potential stimulus package and continued gridlock, investors seemed to believe that was outweighed by a diminished risk of higher taxes, greater regulation, and policy initiatives that might be challenging to businesses.
Stocks took a pause to close out the week, even as a solid jobs report saw the unemployment rate fall a full percentage point to 6.9%.[4]
Yields Gyrate
Overlooked amid the powerful rally in stock prices was the swing
in yields last week. Action in the bond market is important since 10-year Treasury yields are a
benchmark for setting borrowing costs for businesses and they represent another view on the strength
of the economic recovery.
The 10-year Treasury note rose as high as 0.942% during after-hours trading on election evening and dropped to 0.768% by the end of normal trading hours on Wednesday.[5]
THIS WEEK: KEY ECONOMIC DATA
Thursday: Consumer Price Index
(CPI), Jobless Claims.
Friday: Consumer Sentiment.
Source: Econoday, November 6, 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
Monday:
McDonald’s Corporation (MCD), Simon Property (SPG)
Tuesday: D.R. Horton
(DHI), Rockwell Automation (ROK), Datadog, Inc. (DDOG)
Wednesday: Air Products
and Chemicals, Inc. (APD)
Thursday: Tencent Holdings (TCEHY), The Walt Disney
Company (DIS), Cisco Systems (CSCO), Applied Materials (AMAT)
Friday:
Draftkings, Inc. (DKNG)
Source: Zacks, November 6, 2020
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- The Wall Street Journal, November 6, 2020
- The Wall Street Journal, November 6, 2020
- The Wall Street Journal, November 6, 2020
- The Wall Street Journal, November 6, 2020
- The Wall Street Journal, November 5, 2020