Finish strong. Stocks closed the quarter, and 2020, with strong returns, despite lingering economic concerns brought on by a resurgence in coronavirus cases, challenges with the vaccine roll‐out, and uncertainty around the policy implications following the Georgia Senate runoff outcome.
Don’t tell December that it was a November to Remember. The S&P 500 large‐cap index, the tech‐heavy Nasdaq Composite, and the Russell 2000 small‐cap index all closed out the first week of December, right where they ended November, at new record highs.
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Stocks got back to their winning ways with most major global equity indices advancing. The S&P 500, Dow, and Nasdaq indices were all up more than 2% and the Russell 2000 small cap index gained nearly +4%, its fourth straight weekly gain, now up +20.7% in November. In what seems like a routine, for three straight Mondays a promising Covid‐19 vaccine was announced; Pfizer on Nov. 9, Moderna on Nov.16, and AstraZeneca on Nov 23.
The S&P 500 and Dow couldn’t advance for a third week in a row, but small cap stocks were able to extend their streak to three. The Russell 2000 small cap index has gained about +16% in November. For the second week in a row, markets opened on news of a promising new vaccine, only to fade as the week wore on after new coronavirus cases in the U.S. continued to surge and new lockdown measures were announced by various state and local officials.
The S&P 500 and Dow were up for the second week in a row, but it was small cap stocks that topped the leader board for the second straight week. After delivering + 6.9% last week, the Russell 2000 small cap index added another +6.1% this week. Promising news of a potential COVID‐19 vaccine helped Value oriented stocks trounce Growth stocks. But with cases surging both in the U.S. and abroad, many are wondering if this is just another Value head‐fake.