Current Market Observations

Posted on December 1, 2020 by The Weekly Commentary

by William Henderson, Vice President / Head of Investments
A holiday shortened trading week did not stop the markets’ strong weekly performance as all three broad market indices showed positive results for the week. The Dow Jones Industrial Average returned +2.2%, The Standard & Poor’s 500 index returned +2.3% and The NASDAQ Composite returned +3.0%. These weekly returns piled onto year-to-date figures that are shaping up 2020 to be a year of healthy gains for equities. As of November 27, 2020, year-to-date returns for the key market indices stood at +4.8% for the Dow Jones Industrial Average, +12.6% for the S&P 500 Index and +36.0% for the NASDAQ Composite.

Fortunately, the economy continues to display impressive resilience across multiple sectors, such as housing, auto sales, retail sales, manufacturing, and most services including health care and information technology. We’ve seen increased demand for services such as cloud computing and web-based services as working from home becomes the norm rather than the exception. Further, as an offshoot of strong housing, the home remodeling and home improvement sectors have also been very strong. Conversely, travel and leisure sectors continue to suffer. According to the FAA, Thanksgiving holiday travel was 50% lower than 2019. Lastly, elevated concerns of COVID-19 in the United States and elsewhere casts a pall on a positive path for the economy.

Three things leave us hopeful for a continued economic recovery in 2020 and into 2021. First, and most important, the Federal Reserve is likely to keep rates low and provide as much liquidity and accommodation as the economic recovery requires. Secondly, online and virtual holiday shopping could be very strong this year as the consumer is flush with cash and suffering from pent up spending demand. Finally, two major pharmaceutical firms have filed with the FDA for approval of their COVID-19 vaccine: Moderna and Pfizer. November has wrapped up and looks to be one of the best market returns for a November ever. Keep an eye of e-commerce spending and continued strength in housing as the year comes to close.

Valley National Financial Advisors, and its family of companies, has been in the Lehigh Valley since 1985. The company is independent and locally owned. As a respected and trusted organization, our relationships with many clients and their families transcend generations. We have the expertise to provide clients with financial strategies to effectively manage their existing assets and to provide for the eventual transfer of their wealth.

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