It’s exceptionally rare to see double-digit broad market returns in any one month.
In fact, we have only seen seven the since 1992… with one of those earlier this year (April)
Prior to 2020, the most recent double-digit return month was in October 2011, as the market recovered from a U.S. Treasury downgrade.
From there, we need to go back a further twenty years to December 1991.
“Black Friday” is generally regarded as one of the largest U.S. shopping days of the year…
It’s also the start of the Christmas holiday season shopping period.
This is a closely watched event given ~70% of all US GDP is a function of what consumer’s spend.
What’s more – it gives us insights into how and where consumers are shopping (e.g., online versus physical; specific categories etc).
Santa is coming…
He might be a little late but the gift of more cheap money is almost certainly on the way.
Great news!
Low credit spreads, trillions in fiscal stimulus with short-term rates anchored below zero through 2023 is “Christmas” for risk assets.
All that was missing was some visibility past the pandemic..
Despite the market closing slightly lower this week – the market remains optimistic. For eg, a number of economic headwinds hit the tape. However, the market remains incredibly resilient – focusing on the potential upside for next year.
When 2020 comes to a close in approx 6 weeks… it will likely be another double-digit return year. The stand-out group will be tech – with the Nasdaq up ~30% for the year – outperforming the broader S&P 500 by a solid 20%. The Dow Jones and Russell 2000 are essentially flat for the year..
July 7 this year I issued a post titled “BABA is a Better Buy than AMZN”. At the time, Alibaba (BABA) was trading $236. Over the next 3 months – BABA hit a peak of $312 – good enough for 32% gains. However, most of those gains were erased the past three weeks…
News of effective vaccine’s from Moderna and Pfizer are bolstering hopes of a rapid (2021) economic recovery. As a result, growth stocks (like tech) are being sold and value (recovery names) are being bought.
The near-term (3 month) response from central decision makers on COVID lock-downs will be pivotal to whether global economies maintain recovery momentum into the new year. From mine, business (large and small) clearly wants to get on with things… but will they be allowed?
The S&P 500 is up 10.5% year-to-date. The Nasdaq is up over 30%. If we can finish anywhere near today’s close – it will be considered a solid year – despite a 35% bump-in-the-road over March. So here’s today’s exam question: Will the market be higher or lower as we close out the final two months?
The market received some potentially very exciting (and long awaited) news today…
An effective vaccine for COVID-19 could be on the horizon.
Pfizer (PFE) lit up the market with news of its Phase III vaccine trial… where initial studies showed “90% effective” rate.
