Company / Analytics

Week 48 in Brief

How did the major indices perform?

U.S. stocks gained on Friday, as shares of technology and health-care companies pushed the S&P 500 and Nasdaq Composite to new records in the shortened trading day. Markets were closed Thursday for the #Thanksgiving holiday.

• On Friday, the Dow Jones Industrial Average rose 37.90 points to close at 29,910.37, a gain of 0.1%; the S&P 500 advanced 8.70 points, or 0.2%, to end at 3,638.35, finishing at its 26th record close of the year; while the Nasdaq Composite climbed 111.44 points to close at 12,205.85, a gain of 0.8% to mark the technology-laden index’s 45th record of 2020.
• On Wednesday, the Dow was down 173.77 points, 0.6%, at 29,872.47; the S&P 500 index lost 5.76 points, 0.2%, ending at 3,629.65; and the Nasdaq Index added 57.62 points, or 0.5%, to book a record close at 12,094.40.
• For the week, the Dow rose 2.2%; the S&P 500 gained 2.3%, and the Nasdaq Composite logged a 3% rise.

What drove the markets?

• Investors noted healthy online retail sales with the holiday shopping season beginning and parsed an update about the presidential transition as well as news related to vaccines for COVID-19.
• Black Friday, the day after the Thanksgiving holiday, also is traditionally the busiest shopping day of the year for Americans, and online sales are likely to replace in-store shopping to an even greater extent this year during the coronavirus pandemic.
• Retailers made gains Friday with the SPDR S&P Retail ETF up 0.9% to an all-time high. Amazon gained 0.3%, and Shopify climbed 1.5% after Adobe Analytics said Thanksgiving Day online sales rose to a record $5.1 billion as the pandemic forces consumers online.
• In vaccine news, the market was keeping one eye on AstraZeneca, whose shares slipped 0.9% early on Friday as questions were raised over the recent efficacy data of its experimental vaccine, being developed by the University of Oxford. The British drugmaker said earlier this week the vaccine was around 90% effective when volunteers were given a half-dose shot followed by a full dose a month later, but 62% effective when two full doses were given. AstraZeneca ended flat Friday, at $52.61.

Economic Data & Policy

• US jobless claims rose for the second week in a row, with 778,000 initial claims.
• Durable goods orders of long-lasting products rose 1.3% in October, mostly a result of military spending while non-defense orders rose 0.2%, led by transportation equipment.
• US Q3 GDP remained unchanged at an annualized rate of 33.1%, but still about 3.5% below pre-pandemic levels.
• New home sales fell slightly in October compared to September but were still 41.5% higher compared to last year.
• Personal income fell 0.7% while consumer sentiment reading was at a level of 96.1 is, below the pre-pandemic reading of 132.6.

Stocks in focus

• Tesla Inc. is recalling 870 cars in China because of a fault in the roofs that could cause a part to fall off. Tesla shares still ended at 2.1% higher, at $585.76.
• Biogen Inc and Sage Therapeutics announced Friday they have agreed to jointly develop therapies to treat depression and movement disorders in a deal in which Biogen will give Sage $1.525 billion in cash. Shares of Biogen gained 0.8% while Sage shares fell 8.6% to close at $243.78 and $75.57 respectively.
• On Wednesday, shares of Slack Technologies surged 37.6% Wednesday to book its highest daily percentage gain ever, following reports that Salesforce.com Inc. was in talks to buy the business communications software company. Shares of Salesforce ended 5.4% lower.

How did the European markets perform?

• European markets finished higher on Friday with shares in France leading the region. The CAC 40 is up 0.56% while Germany’s DAX is up 0.37% and London’s FTSE 100 is up 0.07%.
• The U.K. government announced that most regions would return to tougher restrictions once the national lockdown is lifted next week. The majority of the country will be under tighter measures than before the country went into lockdown on November 5. In Germany, Chancellor Angela Merkel said Thursday the country’s partial lockdown would be extended until December 20, while France will remain locked down until December 15, raising concerns over the economic impact in the coming months ahead of a potential vaccine.
• Shares of Banco de Sabadell SA slid 13.6% on Friday after the Spanish bank said merger talks with bigger rival BBVA SA had ended.

How did Asian markets perform?

• Asian markets finished broadly higher on Friday with shares in China leading the region. The Shanghai Composite is up 1.14% while Japan’s Nikkei 225 is up 0.40% and Hong Kong’s Hang Seng is up 0.28%.
• India plunged into recession for the first time in nearly a quarter of a century as the pandemic continues to weigh heavily on Asia’s third-biggest economy, which economists warn will struggle to recover from the slump. Official data published on Friday showed GDP for the July-September quarter fell by 7.5% compared to the same period last year when the economy was growing by more than 4%. That follows a record drop of nearly 24% in GDP in the April-June period, the first quarter of India’s fiscal year.

Commodities and other assets

• Crude-oil futures on Friday finished mixed ahead of an important OPEC meeting, after settling on Wednesday at the highest level since early March.
• West Texas Intermediate crude for January delivery was down 18 cents, or 0.8%, to end at $45.53 a barrel on the New York Mercantile Exchange, after a 1.8% gain on Wednesday, but January Brent crude climbed 38 cents, or 0.8%, to settle at $48.18 a barrel on ICE Futures Europe, following a 1.6% gain for grade oil in the previous session.
• For the week, WTI gained 7.3% for its largest one-week gain since Oct. 9 and its fourth straight gain, while Brent picked up 7.2%, and notched a fourth weekly rise in a row, according to Dow Jones Market Data.
• Meanwhile, Gold futures closed 1.3% lower, ending below a key support level, at $1,788.10 an ounce.

Currencies

• USD fell on Friday, close to its lowest in three months and on track for a weekly loss against a basket of currencies, as markets continued their rally on vaccine progress and hopes for a global economic recovery.
• The ICE U.S. Dollar Index Was off 0.2% at 91.82, as currency traders move to riskier currencies amid the significant improving risk urge seen around global investors, which triggered the prices of global equities, and energy commodities to go up.

Next week

• Stocks are set to close out November with some of the biggest gains ever, thanks to positive news on vaccines.
• The week ahead includes earnings from Zoom Video Communications, CrowdStrike, and DocuSign and some important data, including November’s employment report.
• Watch out for our Monday Weekly Market Outlook that provides insights on what’s coming up that week.