Sunday, November 29, 2020

Dow tops 30K giving investors a lot to be thankful for 

Weekly Market Update: Dow tops 30K giving investors a lot to be thankful for


- The Dow hit a fresh all-time highs this week breaking above 30K for the first time ever. Markets continued to calibrate to rising hopes for coronavirus vaccines. Uncertainty also dissipated when the GSA informed President-elect Biden that the current administration was ready to begin working on the transition. That news came in the wake of multiple reports former Fed Chair Yellen has been selected to serve as Treasury Secretary under the Biden administration. Stock and options volumes exploded and breadth was very impressive ahead of Thursday’s Thanksgiving break led by the small caps and various segments at the pandemic’s epicenter, like travel and leisure.
- Investors sifted through a mountain of economic data. Weekly initial jobless claims hit a 5-week high while the total number of people claiming benefits in all programs rose by 135K to ~20.5M people. Oct personal income also fell a sharp 0.7% suggesting the pandemic continues to ravage a broad swath of the US labor market. Friday’s shortened trading session saw gold prices drop below $1,800 and the VIX tested below 20 for the first time since Feb, suggesting investors are becoming comfortable with diminishing political uncertainty despite President Trump’s continued tweets questioning the election results. Oil prices rallied sharply helped by a report OPEC+ producers are still leaning towards extending production cuts into next year despite the recent pop in crude prices. Bitcoin rolled over after nearing 20K and new all-time highs midweek amid continued general softness in the dollar. The Euro tested back above 1.1950 for the first time since September bringing the key technical 1.20 level back into focus as time continued to run out on protracted Brexit talks. For the week the S&P added 2.3%, Dow gained 2.2% and NASDAQ rose ~3%.
- In corporate news for this holiday-shortened week, AstraZeneca announced its vaccine candidate met its primary efficacy endpoint in preventing COVID-19 with average efficacy of 70%, though the CEO said it may do another study after an accidental lower dose showed higher efficacy levels against coronavirus. Salesforce reportedly held talks with Slack over a potential acquisition which could value the business communication company at over $17B. EU aviation regulators confirmed the Boeing 737 Max can be allowed to fly again and expects formal approval by Jan 2021. Google is said to plan to build a fiber optic network that would open a new global traffic corridor linking India and Europe, which would connect an internet route between Saudi Arabia and Israel for the first time.