ClearWater Market Commentary as of December 21st, 2020

Here is the ClearWater Market Commentary as of December 21st, 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 2020/12/21 – Source: www.marketwatch.com}

^{As of 2020/12/21}

Last week’s and next week’s key economic events:
 

• US economy (S&P 1.69%):

• The major indexes reached record highs as expectations grew for the passage of another federal coronavirus relief package.
• Information technology stocks outperformed within the S&P 500 Index, helped by gains in Apple and Microsoft.
• Energy stocks lagged despite oil prices touching nine-month highs on strong demand from India and China. Trading volumes were muted through much of the week in advance of the rebalancing of the S&P 500, which electric carmaker Tesla was set to join the following Monday.
• After weeks of stalled negotiations, signs of progress emerged in congressional attempts to craft a new stimulus bill of up to USD 908 billion. The group was unable to come to an agreement, but reports later surfaced that the two sides had agreed to temporarily put aside two of the thorniest issues.
• The rollout of the Pfizer-BioNTech coronavirus vaccine on Monday also seemed to bolster sentiment.  

Canadian markets (S&P/TSX 0.84%):

• The TSX finished the week largely unchanged
• Canadian October retail sales surprised to the upside, driven by strong auto sales, but growth is expected to slow in November
• Bank of Canada Governor Tiff Macklem warned that the economy may shrink modestly in the first quarter of 2021 due to the pandemic’s second wave
• The energy sector fell, despite higher oil prices. US economic releases continued to reflect some slowing of activity due to widening COVID-19 containment measures

Performance 2020: S&P 500/400/600 Sectors

• European and Asian economies:

• Shares in Europe rose on optimism surrounding coronavirus vaccinations, better-than-expected readings from purchasing managers’ indexes in key eurozone economies, and signs of progress in U.S. congressional negotiations for another round of fiscal stimulus. 
• French president Emmanuel Macron catches COVID-19; lockdowns tightened
• French President Emmanuel Macron self-isolated after displaying symptoms of COVID-19, the disease caused by the novel coronavirus. Macron had attended a series of high-level events in the past week, including a summit of EU leaders. After his announcement, the prime ministers of Spain and Portugal, who met with him at a dinner, quarantined themselves as a precaution.
• Germany tightened lockdown restrictions to tame a strong resurgence in coronavirus infections
• Negotiations on a post-Brexit trade deal are in a “serious situation,” UK Prime Minister Boris Johnson said after a call with von der Leyen late Thursday. He said again that a no-deal scenario was “very likely” unless the EU’s position changed “substantially.”
• Chinese stocks posted a weekly gain despite recording mild losses on Friday, when the U.S. announced that it was blacklisting China’s top chipmaker and more than 60 other companies for national security reasons.

What to watch this week:

United States:

• Before markets open on Monday, Dec. 21, Tesla will be added to the S&P 500.
• U.S. existing home sales and new home sales are released on Tuesday Dec. 22, and Wednesday, Dec. 23, respectively.

Sources: Bloomberg.com,Yardeni.com, Barron’s.com, Factset.com and Newyorkfed.org

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