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2020 – What a Year – Virus and Presidential Elections Give Investors a Volatile Year, S&P Finishes Up 16%

Weekly Update – January 01, 2021

  • The S&P 500 ended 2020 on a positive note as it reached a new closing record, up 1.4% for its final week of the year while logging a 3.7% climb for December and a 16% jump for the year.
  • The market benchmark ended the year at 3,756.07, up from last week’s close of 3,703.06 and representing its highest closing level ever. The index also reached a new intraday high Thursday at 3,760.20.
  • This is the eighth time in history that the S&P 500 has closed a year at a record high, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. The last time this happened was in 2013.
  • It marks the conclusion of a tumultuous year for the market, which reacted negatively earlier in the year as the COVID-19 pandemic unfolded and prompted shutdowns worldwide, but rebounded as economies reopened and vaccines gave investors hope.
  • The final week of the year consisted of just four sessions as the US stock market closed Friday for New Year’s Day.
  • Over the week’s four sessions, all but one sector gained. The utilities sector had the largest percentage gain of the week, up 2.4%, followed by a 1.8% rise in consumer discretionary and gains of 1.8% each in communication services, financials and health care. Energy was the one sector in the red, down 0.6%.
  • The utilities sector’s gainers this week included CMS Energy (CMS) and Entergy (ETR), which rose 4.9% and 4.7%, respectively.
  • Among consumer discretionary stocks, Tesla (TSLA) shares jumped 6.6% on the week amid positive commentary and actions from several analysts. Cowen & Co. analysts raised their price target on the stock while analysts at Wedbush and Credit Suisse both issued notes to clients predicting the maker of electric vehicles will exceed Street expectations for Q4 demand and is likely to achieve its target delivery of 500,000 electric vehicles for the year.
  • On the downside, the energy sector’s decliners included Cabot Oil & Gas (COG), down 3.9%, and Williams (WMB), down 3.3%.
  • Next week, the market will kick off 2021 with readings on December manufacturing activity from Markit and the Institute for Supply Management due Monday and Tuesday, respectively. November construction spending is also due Monday and motor vehicle sales for December are expected Tuesday.
  • The focus will turn to employment midweek, with ADP’s employment report for December due Wednesday, followed by weekly jobless claims Thursday and the Labor Department’s nonfarm payrolls and unemployment rate for December expected Friday.

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