US Small-caps continue to outperform. The major indexes hit new highs on Wednesday and the Russell 2000 index outpaced the S&P 500 for the 5th consecutive week
The S&P 500 however continues to show signs that its momentum is extending
Pfizer/BioNTech vaccine nears distribution. This positive vaccine news appeared to boost investor sentiment as they confirmed the vaccine was 95% effective. The brightening outlook for an eventual end to the pandemic came against a grim set of current milestones, however. Daily U.S. deaths from the virus crossed 3000 for the first time and new state restrictions continued to be announced for the holidays
The Bipartisan relief bill remains in doubt. Whether congress will respond with further fiscal stimulus remains unknown.
The impact of latest wave of infections was perhaps most evident in the weekly jobless claims which jumped from 716,000 to 853,000.
Canadian markets (S&P/TSX 0.72%):
Although Canadian equities closed mixed last week, the TSX rose to a nine-month high following the fresh record highs set last week by the major U.S. indexes.
The Bank of Canada left its policy rate unchanged near zero and highlighted that the outlook remains fluid with both downside and upside risks.
Even as the economic momentum slows in the near term, the outlook for the economy remains positive over the next year, though the road may be bumpy.
The rollout of vaccines (Canada approved the Pfizer vaccine last week) will likely accelerate growth and clear the way for a durable rebound in economic activity.
Later next year we should hopefully see the economy closer to its normal state due to easy of restrictions and a economic re-opening will unless pent-up consumer demand.
Performance 2020: S&P 500/400/600 Sectors
European and Asian economies:
European shares fell on concerns about the rising number of coronavirus cases in key economies. France extended lockdown measures and Germany is set to follow.
There remains uncertainty surrounding a post-Brexit trade deal. Talks between the British Prime Minister Boris Johnson and Ursula von der Leyen, the European Commission president, failed last week to break the deadlock over a UK-EU trade deal. A Final deadline announcement to be set for this week.
On brighter news, the EU approved a historic budget and the ECB extended stimulus measures. The 1.8 trillion budget will start distribution money to needy member states in the second half of next year.
Japan stocks posted mixed results as the Japanese government unveiled a third round of stimulus.
China equities fell on renewed tensions with the U.S. after a second major index provided removed some Chinese companies from its benchmarks following a Trump administration executive order. Worries over U.S. sanctions continue to weigh on sentiment.
What to watch this week:
Canada:
Statistics Canada will release its Monthly Survey of Manufacturing on Tuesday
Statistics Canada will release its Consumer Price Index for November on Wednesday.
BlackBerry will release Q3 results after market close on Thursday
United States:
This upcoming Friday is the deadline to avoid a government shutdown…again.
Nike reports earnings this upcoming Thursday.
This upcoming Wednesday, the Federal Open Markets Committee announces interest rates and monetary policy.
Sources: Bloomberg.com,Yardeni.com, Barron’s.com, Factset.com and Newyorkfed.org
Thank-you for checking out our ClearWaterMarket Commentary for December 14th, 2020. If you would like to receive the ClearWater Commentary at the start of every week, sign-up for our Newsletter.
Here is the ClearWater Market Commentary as of December 14th, 2020:
In this issue:
– Performance of Major Indices
– Market Commentary
– Last Week’s Key Economic
Events and Upcoming Events
Performance of Principle Indexes:
As of 2020/12/04 – Source: www.marketwatch.com
As of 2020/12/04
Last week’s and next week’s key economic events:
Canadian markets (S&P/TSX 0.72%):
Performance 2020: S&P 500/400/600 Sectors
What to watch this week:
Canada:
United States:
Sources: Bloomberg.com,Yardeni.com, Barron’s.com, Factset.com and Newyorkfed.org
Thank-you for checking out our ClearWater Market Commentary for December 14th, 2020. If you would like to receive the ClearWater Commentary at the start of every week, sign-up for our Newsletter.
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