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Weekly Market Commentary

Weekly Market Commentary 12/4/2020

-Darren Leavitt, CFA

US equity markets hit another set of all-time highs last week.  Positive price momentum carried over from a strong November into the start of December, and more positive news on Covid-19 vaccines coupled with the rhetoric around a bipartisan stimulus package aided the weekly gains.

For the week, the S&P 500 added 1.7%, the Dow rose 1%, the NASDAQ led with a gain of 2.1%, and the Russell 2000 increased 2%.  The US Treasury curve steepened as longer-tenured issues sold off.  The 2-year yield increased by one basis point to close at 0.14%, while the 10-year bond yield rose by thirteen basis points closing at 0.97%.  Gold snapped its losing streak gaining just over 3% or $56.60 to close at $1840.20 an Oz.  Oil continued its move higher, increasing $0.76 a barrel to close at $46.25.  There were no changes to our models last week.

Wall Street had an impressive rally last week, with most sectors of the market participating.  Value and growth equities both did well.  Standout sectors included Software and Semiconductors.  In Software, Salesforce.com formally announced that it would take-out Slack, and Docusign and Snowflake’s earnings were better than expected. Semi’s continued to be red hot, posting 50.5% gains since the end of 2019.  Sixteen components of the Philly Semiconductor index were at all-time highs on Friday.  The performance comes as the Semiconductor industry association saw 6% year over year growth in October sales.

The positive news continued to roll-out on Covid-19 vaccines.  Early in the week, Moderna announced an efficacy rate of just over 94%.  Additionally, Pfizer and BioNTech received emergency use approval in the UK.  Later in the week, Pfizer announced that there had been some troubles in their supply chain and tempered their expected manufacturing expectations for their vaccine by 50%.

Stimulus related headlines reappeared during the week.  A watered-down version that would slate $908 billion found some bipartisan support but received a cold shoulder from the administration. Bernie Sanders also said he wanted more from the proposed bill and would want an additional set of $1200 checks to go out to US households.  The news headlines gave the market some footing and induced some anxiety in longer-dated treasuries that sold off on the prospects of a better economy and more fiscal spending.  The push for more stimulus might have a chance after Washington saw a big miss in the Employment situation report.  Non-farm payrolls increased by 245k, much less than the 650k that was expected.  The report clearly showed a slowdown in hiring in November and also showed increased permeant jobless statistics.  On the bright side, the unemployment rate fell to 6.7% in November from 6.9% in October.

The information in this Market Commentary is for general informational and educational purposes only. Unless otherwise stated, all information and opinion contained in these materials were produced by Foundations Investment Advisers, LLC (“FIA”) and other publicly available sources believed to be accurate and reliable.  No representations are made by FIA or its affiliates as to the informational accuracy or completeness.  All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. No party, including but not limited to, FIA and its affiliates, assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.

The views and opinions expressed are those of the authors do not necessarily reflect the official policy or position of FIA or its affiliates.  Information presented is believed to be current, but may change at any time and without notice.  It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. You should consult with a professional advisor before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Investment advisory services are offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.

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