The markets lost ground last week for the first time since October. Does next week look like more of the same?
Monday
Markets started the week on a strong continuation of last week’s growth. The S&P 500 rose 1.16% in similar form to the start from last week. Most of the growth happened on the back of Moderna announcing a 94.5% efficacy in its coronavirus vaccine. This was apparent through softness in stay at home equities and strength in stocks that do well during a recovery.
Tuesday
Markets took a breather from the recent rally on Tuesday as they were flat on the Day. The Nasdaq did trend higher as Tesla outperformed on news of inclusion to the S&P 500 in late December. Missed expectations in retail sales largely contributed to muted sentiment from investors on Tuesday.
Wednesday
Markets were in the green for most of the day as housing data showed strength. As the day progressed, markets began to dive into the red, with the S&P 500 ending more than 1% down. Increasing lockdowns in major cities drove investor sentiment late in the day.
Thursday
Initial jobless claims climbed last week to 742K in a reversal of recent trends. This is an increasing concern as COVID cases continue to rise. This produced an outperformance in the Nasdaq. Late in the day a reversal occurred, much like Wednesday, but in the markets favor. The optimism came from hopes for stimulus as talks between senate democrats and republicans are to resume.
Friday
Markets stayed in the red for the day as concerns over COVID persisted as economic data was light. Selling accelerated into the close. There was little reason to assume positive information coming out of the weekend news cycle.
Conclusion
The S&P 500 fell by 1.18% across the week. This was its first negative week since the end of October. Rising cases, a weaker job market, and little signs of stimulus have created mounting concerns for markets. There will be a flurry of economic data early this week leading up to the Thanksgiving holiday. The data will give us greater insight into the housing market, consumer confidence, jobless claims, and the services sector.
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