Week 49 in Brief
How did the major indices perform?
U.S. stocks recorded new levels on Friday on hopes of another fiscal stimulus from Congress amid a disappointing November jobs report.
- On Friday, the Dow Jones Industrial Average rose 248.74 points or 0.8% to close at 30,218.26; the S&P 500 gained 32.40 points, or 0.9%, to end at 3,699.12; and the Nasdaq Composite rose 87.05 points, or 0.7%, to 12,464.23.
- Stocks of smaller companies, which have recently helped lead the market after lagging earlier this year, outgained the broader market Friday. The Russell 2000 climbed 43.75 points, or 2.4%, to 1,892.45, more than double the gain for the big stocks in the S&P 500.
- For the week, the Dow gained 1%, the S&P 500 rose 1.7%, and the Nasdaq was up 2.1%. The Russell advanced 1.7% during that time.
What drove the markets?
- Stocks saw historic gains in November and continued to push higher this week in a rally tied largely to optimism over progress toward COVID-19 vaccines, with investors looking past a sharp rise in new cases and deaths over the same period.
- Investors noted the jobs report which showed 245,000 jobs were created in November, marking the smallest monthly gain since the economy began to emerge from lockdown in the spring, as the unemployment rate fell to 6.7% from 6.9%.
Economic Data & Policy
- US factory goods orders rose for the sixth straight month in October, with orders for manufactured goods rising 1% after a 1.3% gain in the prior month.
- House Speaker Nancy Pelosi said Friday that talks on a COVID-19 relief package have “momentum,” and that the weaker-than-expected November jobs report gives more reason for Congress to act.
Stocks in focus
- Pfizer shares gained 0.7% closing at $40.34. The stock has been rising since Wednesday when its BioNTech partnered coronavirus vaccine gained authorization in the U.K. The stock demonstrated a mixed performance when compared to some of its competitors Friday, as Johnson & Johnson rose 0.85% to $150.27, Merck & Co. Inc. rose 0.60% to $81.94, and Novartis AG rose 1.53% to $91.62.
- Moderna shares fell 3% after it said late Thursday that its COVID-19 vaccine candidate has the potential to confer longer-term immunity and that it expects to have 20 million doses of the trial vaccine at hand in the U.S. this year. Shares closed the week at $152.52
- DocuSign Inc. shares surged 5.3% after the maker of technology that facilitates digital contracts delivered results that exceeded earnings expectations. Shares closed at $243.22.
- Tesla shares outperformed the market Friday by rising 0.95% higher to close at $ $599.04 Friday compared to the NASDAQ Composite Index 0.70% to rise. The stock demonstrated a mixed performance when compared to some of its competitors Friday, as Toyota Motor Corp. rose 1.04% to $138.28, General Motors rose 0.70% to $44.40, and Honda Motor Co. Ltd. rose 2.83% to $30.18.
How did the European markets perform?
- European markets finished higher on Friday with shares in London leading the region. The pan-European Stoxx 600 closed up 0.6%, with oil and gas stocks climbing 3.1% to lead gains after OPEC+ members agreed on Thursday to increase production by 500,000 barrels per day beginning in January. Retail stocks declined by 0.5%
- The UK’s FTSE 100 is up 0.92% while France’s CAC 40 is up 0.62% and Germany’s DAX is up 0.35%.
- Data from Germany showed manufacturing orders rose for the sixth-straight month ahead of a second lockdown.
- The European Central Bank plans to boost its bond-buying program, the Pandemic Emergency Purchase Programme, when it meets next week, Market News reported, citing unnamed sources. The ECB indicated in a late October meeting that it would boost stimulus at this month’s meeting.
- Representatives from the U.K. and EU talked on Thursday in the hope of securing a trade deal before the Dec. 31 deadline. However, the Financial Times reported that Britain is accusing France of making new demands at the last second, diminishing the chances of a deal being agreed by the end of the week.
- In stocks, shares of Danish pharmaceutical company H. Lundbeck jumped 8.5% to lead the Stoxx 600 after UBS rated it as a top pick for 2021. At the bottom of the index, Swedish investment firm Latour plunged more than 12.6% after its majority owner announced the sale of 10 million shares in the company.
How did Asian markets perform?
- Asian markets finished mixed as of the most recent closing prices. China’s Shanghai Composite Index finished less than 0.1% lower, the CSI 300 finished 0.2% higher, while Hong Kong’s Hang Seng booked a 0.4% gain. Japan’s Nikkei 225 ended 0.2% lower on Friday.
Commodities and other assets
- Crude-oil futures gained 24 cents, or 0.3%, to trade at $45.87 a barrel on the New York Mercantile Exchange after OPEC+ agreed to curb production, presenting a united front of a unanimous decision after days of disagreements.
- Meanwhile, gold futures ended lower on vaccine developments but posted a weekly gain on U.S. stimulus talks. February gold lost $1.10, or nearly 0.1%, to settle at $1,840 an ounce, after gaining 0.7% on Thursday to mark the highest finish for a most-active contract since Nov. 20, according to FactSet data.
- Against that backdrop, Gold has surged for the week as the dollar, as measured by the ICE U.S. Dollar Index, has fallen 1.2% to around its lowest level since 2018.
- The yield on the 10-year Treasury note TMUBMUSD10Y rose 6 basis points to around 0.972% amid hopes for a fiscal package. Yields and prices move in opposite directions.
- The US currency has shed 1.2% against a basket of its peers over the past seven days, bringing its decline for the year to more than 6%, with the ICE USD Index 0.1% higher, after touching close to a two-year low.
- The pound climbed 0.2% to $1.3471, after Reuters reported, citing unnamed European Union officials, that a trade pact between the EU and the U.K. was “imminent.”
- The Euro has been one of the biggest winners from recent dollar weakness, breaking decisively above $1.20 this week.
- Against the Swiss franc, the dollar continued its descent, dropping to a nearly six-year low of 0.8886 francs. The greenback was last down 0.1% at 0.8902.
- The dollar gained 0.2% against the yen to 104.08 yen.
- Stocks closed November with some of the biggest gains ever, thanks to positive news on vaccines. The market’s next move hinges on the state of coronavirus stimulus talks in Washington and analysts note that even a smaller deal would be good for the economy, but without one, investors may grow worried.
- Watch out for our Monday Weekly Market Outlook that provides insights on what’s coming up that week.