Updated: 4-Dec-20
A weekly recap of market activity and events, featuring commentary, analysis written with individual investors in mind.
Week in perspective provided by Briefing.com. Briefing.com offers live market analysis on their web site www.Briefing.com
Each of the major indices set all-time highs this week, powered higher by growth stocks and value stocks alike. The Nasdaq Composite claimed the winning spot with a 2.1% gain and was followed by the Russell 2000 (+2.0%), S&P 500 (+1.7%), and Dow Jones Industrial Average (+1.0%).
Nine of the 11 S&P 500 sectors contributed to the advance. The energy sector rallied 4.5%, and the information technology sector rose 2.8%. The utilities sector (-2.2%) was the weakest link by a wide margin.
There was no one specific catalyst that propelled stocks higher. Rather, it was the positive cumulative effect that the week's developments had on an already bullish investor mindset that could best explain the gains. In simpler terms, the market rode a bullish momentum.
Stimulus talks were renewed. Moderna (MRNA) said its vaccine was 94.1% effective in preventing COVID-19 and 100% effective in protecting against serious outcomes. Pfizer (PFE) and BioNTech (BNTX) received emergency approval for their COVID-19 vaccine in the UK. Apple (AAPL) and Tesla (TSLA) were upgraded to Buy ratings by a couple of analysts.
Regarding stimulus talks, Democratic Congressional leadership and some Republicans supported a proposed $908 billion bipartisan stimulus bill as a starting point for negotiations. House Speaker Pelosi spoke with Senate Majority Leader McConnell about attaching a smaller stimulus deal to the year-end spending bill.
It's not for certain that the mixed November employment report, which highlighted slower jobs growth, pushed lawmakers over the edge on Friday, but the market reacted as if the report had some negotiating power.
In the Treasury market, the 2s10s spread widened by 14 bps to 83 bps, reaching its highest level since late 2017 in an affirmation of the market's upbeat economic outlook. The 10-yr yield finished the week 13 basis points higher at 0.97%. The U.S. Dollar weakened by 1.0% to 90.82 to reach its lowest level since April 2018.
Separately, Salesforce (CRM) confirmed it agreed to acquire Slack (WORK) in a cash-and-stock deal with an enterprise value of about $27.7 billion. CRM shares fell 9% this week given the hefty price tag.