While Thanksgiving week historically tends to be positive for the U.S. stock market (up about 75% of the time, according to CNBC), last week saw outsized gains for major market indexes and several record highs.
The Dow Jones Industrial Average closed above 30,000 for the first time on Tuesday (Nov. 24) and was up 2.2% for the week. The S&P 500 Index rose 2.3% and the NASDAQ Composite gained 3%. The Russell 2000, which gained 3.9% on the week, continued its stellar gains for November.
Overall, according to several market commentators, “November was a month to remember,” despite a pullback on Monday, Nov. 30.
Source: Bespoke Investment Group, data as of 11/30/2020
Barron’s Up and Down Wall Street column cited Barclay equity derivatives strategists, who pointed to a “perfect trifecta of outcomes” for the recent rally: “a ‘decisive victory’ scenario in the U.S. elections; news of effective Covid-19 vaccines; and positive surprises on third-quarter earnings—an average gain of 18% for S&P 500 companies, with more than 80% beating expectations.”
These positive developments helped markets resoundingly overcome concerns about rapidly rising COVID cases and many states’ increased pandemic-related restrictions, a mixed picture for economic indicators, the continued lack of progress on a new government stimulus program, and the frequent news reports of long lines as many Americans sought supplies from local food banks (a 60% increase in demand versus last year, according to USA Today reporting.)
On the impact of the pandemic in the coming months, Barron’s reports,
At least two other factors could be thrown into the mix for the market’s positive results in November: (1) what seems to be a generally positive assessment of President-elect Biden’s cabinet selections so far (especially the selection of former Fed Chair Janet Yellen as Treasury Secretary) and (2) increased optimism over the 2020 holiday shopping season.
Business Insider remarked on the choice of Yellen,
Regarding the holiday shopping season, the National Retail Federation (NRF) forecast that “holiday sales during November and December will increase between 3.6 percent and 5.2 percent over 2019 to a total between $755.3 billion and $766.7 billion.”
The NRF added in its press release,
Over this past weekend, CNBC noted three key points about the early holiday shopping season:
The Associated Press notes that robust online shopping on Black Friday was accompanied by a significant drop in physical U.S. store visits, down 52% according to Sensormatic Solutions, a retail tracker.
Sources: Statista, Deloitte
Sources: Statista, industry data; 2020 is projected
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