THE WEEK ON WALL STREET
Stocks marched higher last week on an improving outlook for the passage of a fiscal stimulus package.
The Dow Jones Industrial Average rose 1.03%, while the Standard & Poor's 500 tacked on 1.67%. The Nasdaq Composite index gained 2.12% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.78%.1,2,3
A Record Week for Stocks
After opening the week with moderate losses amid rising COVID-19 infections, stocks turned higher as investor sentiment was buoyed by the resumption of fiscal stimulus negotiations. As lawmakers discussed various proposals, stocks managed to grind higher.
A better-than-expected jobless claims report on Thursday added fuel to the market rally, but the gains evaporated in late-day trading following news by a major pharmaceutical company that it would be slowing its rollout of the vaccine due to logistical challenges.4
A disappointing jobs report on Friday did not keep investors from bidding stocks higher as the week came to a close, sending the Dow Jones Industrials, S&P 500, and the NASDAQ Composite indices to record high closes.5
The Start of Holiday Shopping
The start of the holiday shopping season provides important insight into the state of the economy and overall consumer confidence. In response to the pandemic, consumers avoided in-store visits over the Thanksgiving weekend. This translated into a 22.4% decline in spending from last year's levels.6
However, spending prior to the Thanksgiving-to-Sunday period surged 65.7% from a year earlier, thanks to large retailers introducing Black Friday-like deals as early as mid-October.6
Of course, the pandemic has led to an acceleration in shopping online. Cyber Monday sales jumped 15.1% over last year's levels as consumers spent almost $11 billion, making it the largest U.S. online shopping day ever.7
BY THE NUMBER$
SUPPLY AND DEMAND - On 4/09/20, OPEC and Russia agreed to a historic production cut of 10 million barrels a day. The price of West Texas Intermediate (WTI) crude oil had fallen to $22.76 a barrel as of 4/09/20 as the global impact of COVID-19 was crushing the worldwide demand for oil. As of last Friday 12/04/20, WTI crude oil closed at $46.26 a barrel (source: NYMEX).
THE FRIENDLIER SKIES - 4,592,989 passengers went through TSA screening at US airports on the Wednesday before Thanksgiving through the Sunday after Thanksgiving, i.e., 11/25/20 through and including 11/29/20. Exactly 8 months earlier, i.e., Wednesday 3/25/20 through Sunday 3/29/20, just 1,006,765 passengers went through TSA screening at US airports (source: TSA). 8
THE WEEK AHEAD: KEY ECONOMIC DATA
Wednesday: Gross Domestic Product (GDP), Job Openings and Labor Turnover Survey (JOLTS).
Thursday: Consumer Price Index (CPI), Jobless Claims.
Friday: Consumer Sentiment.
Source: Econoday, December 4, 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.
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday: Coupa Software (COUP).
Tuesday: Autozone (AZO), Mongodb, Inc. (MDB), Chewy, Inc. (CHWY).
Wednesday: Campbell Soup Company (CPB), Slack Technologies (WORK).
Thursday: Lululemon Athletica, Inc. (LULU), Adobe, Inc. (ADBE), Broadcom (AVGO), Costco
Wholesale Corp. (COST).
Source: Zacks, December 4, 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.
THE WEEKLY RIDDLE
I have keys that will open no locks. I have a space and a lock that's a key. You can enter but you can't leave, and yet - you can escape. What am I?
LAST WEEK'S RIDDLE: You heard me before, yet you hear me once more. Then I die 'til you call me again. What am I?
ANSWER: An echo.