Despite a downturn on the last day of the month, stocks rebounded impressively in November from a moribund performance in October. Several of the benchmark indexes reached record highs during November as investors shifted slightly from tech stocks to shares influenced by economic cycles.
While the presidential election, COVID-19, and additional fiscal stimulus dominated the news throughout the month, stocks seemed immune. Instead, investors pinned their hopes on the development of a virus vaccine and a quick economic recovery.
Gross domestic product rebounded in the third quarter and job growth continued. Personal income and consumer spending continued to climb. Inflation remained muted and below the Federal Reserve’s 2.0% target. Sales of existing homes advanced, while new home sales lagged.
The Dow enjoyed its best month since 1987, and the small caps of the Russell 2000 surged ahead. In fact, each of the benchmark indexes posted double-digit monthly gains.
Among market sectors, energy, financials, industrials, and materials surged. Communication services and information technology posted moderate gains, and utilities fell.
Year to date, each of the indexes listed here is ahead of its respective 2019 closing value. The Nasdaq lead the way and is well ahead of last year’s pace, followed by the S&P 500, the Russell 2000, the Dow, and the Global Dow.
Eye on the Month Ahead
Reported yesterday, new weekly jobless claims fell more than expected last week even as states reimposed stay-in-place restrictions throughout November amid a resurgence in COVID-19 cases.
Reported this morning, the U.S. economy added back the smallest number of jobs in seven months in November, as the labor market endured mounting pressure from the coronavirus pandemic while businesses wait for a vaccine to be distributed next year.
All in all, the last month of the year brings to a close a most tumultuous 2020, as the country and the world continue to recover from the effects of the COVID-19 virus. One or more vaccines should be nearing availability in the early part of 2021. The job market should trend upward, unemployment should wane, industrial production should increase, and the economy should stabilize.