Weekly Market Commentary December 28th to December 31st 2020
Happy New Year. It was a very light week in terms of economic data releases. We saw some regional manufacturing data out of Dallas and Chicago, both higher than expected. The 9.7 reading marked the seventh consecutive month of expansion for Texas manufacturing activity. Chicago’s composite activity was strong at 59.5, the only laggard being employment which has been partially attributed to a lack of childcare during COVID.
Weekly Jobless Claims came in lower than expected at 787,000. Continuing Claims, which lags Initial Claims by a week, fell 103,000 to 5.219 million, the lowest level since the end of March. Both numbers appear to be trending in the right direction although it is unclear if the Christmas holiday delayed applications to the following week.
U.S. equity markets hit record highs on Monday with President Trump’s signing of a $2.3 trillion spending bill that includes $900 million of Coronavirus relief. The approval of a Coronavirus vaccine developed by AstraZeneca in the UK also gave stocks a boost this week. The Nasdaq was up 0.6% on the week, while the Dow and the S&P 500 were up 1.3% and 1.4%, respectively. The yield on the 10-year US Treasury remained steady at 0.92%
As of market close on Thursday, the Dow was up 6.5% in 2020. The Nasdaq finished 2020 up 43.2%, it’s best annual performance since 2009. The S&P 500 was up 15.6% on the year despite having been down more than 30% in March.
Key economic releases for next week include PMI and ISM Manufacturing and the US Employment Report.