The year ended strong. Here is a review of the week, but also, what is in store for January and the rest of 2021?
Monday
The week opened with a bang as the markets responded to the administration signing the stimulus package. Trade was light, but the Santa Claus rally continued, led by communications, discretionary, and technology.
Tuesday
Markets opened the day strong as hopes for larger stimulus and optimism over Brexit persisted. Mid-day that turned as Sen. McConnell indicated that a unanimous push of the $2,000 provision would not occur. This was not a surprising move, however, surprising enough to take the wind out of the sails for traders. Markets ended the day marginally lower.
Wednesday
The day brought modestly increased markets, however the close was deceiving. Markets opened up nearly 1% and faded through out the day. The Santa Claus rally is intact, but barely.
Thursday
The final day of trading followed the trend of 2020. The S&P 500 ended the year by rising 0.60%. The Santa Claus rally ended up adding 2.02% to the year’s performance. Economic news was light for the day; however, initial jobless claims did come in lower than expected at 787K. This is still a very elevated number, but lower than the 833K expected.
Friday
Happy 2021!
Conclusion
What a year! There was so much negative across the globe, between COVID and the subsequent global recession. The markets were not one of those sore spots! The year begin as mundane as any other, with minor concerns stirring over a virus being reported out of China. A few months later it was everywhere and had caused shutdowns around the world, stalling the global economy. The S&P 500 fell 35% in response to the threat. The rebound was amazingly fast and strong. The S&P 500 was able to recapture its previous high 5 months after reaching bottom. The S&P 500 managed to rise 16.26% for the year! Aided, of course, by $3.6T in Fiscal stimulus as well as $3.2T in monetary stimulus.
After the gains experienced last year, a soft January should be expected. Past January the rest of the year shows promise. Stimulus is expected to accelerate with little expectations around further taxation. As the vaccine gets more widely circulated, a return to service industry demand is expected. This should lead to a stronger second half of 2021.
~ Your Future… Our Services… Together! ~
Your interest in our articles helps us reach more people. To show your appreciation for this post, please “like” the article on one of the links below:
FOR MORE INFORMATION:
If you would like to receive this weekly article and other timely information follow us, here.
Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services. Broad diversification across several asset classes with a long-term holding strategy is the best strategy in any market environment.
Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.