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THIS WEEK'S UPDATE

| December 08, 2020
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The Week on Wall Street
Stocks marched higher last week on an improving outlook for the passage of a fiscal stimulus package. 
 
The Dow Jones Industrial Average rose 1.03%, while the Standard & Poor’s 500 tacked on 1.67%. The Nasdaq Composite index gained 2.12% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.78%.
 
A Record Week for Stocks
After opening the week with moderate losses amid rising COVID-19 infections, stocks turned higher as investor sentiment was buoyed by the resumption of fiscal stimulus negotiations. As lawmakers discussed various proposals, stocks managed to grind higher.
 
A better-than-expected jobless claims report on Thursday added fuel to the market rally, but the gains evaporated in late-day trading following news by a major pharmaceutical company that it would be slowing its rollout of the vaccine due to logistical challenges. 
 
A disappointing jobs report on Friday did not keep investors from bidding stocks higher as the week came to a close, sending the Dow Jones Industrials, S&P 500, and the NASDAQ Composite indices to record high closes. 
 
The Start of Holiday Shopping
The start of the holiday shopping season provides important insight into the state of the economy and overall consumer confidence. In response to the pandemic, consumers avoided in-store visits over the Thanksgiving weekend. This translated into a 22.4% decline in spending from last year’s levels. 
 
However, spending prior to the Thanksgiving-to-Sunday period surged 65.7% from a year earlier, thanks to large retailers introducing Black Friday-like deals as early as mid-October. 
 
Of course, the pandemic has led to an acceleration in shopping online. Cyber Monday sales jumped 15.1% over last year’s levels as consumers spent almost $11 billion, making it the largest U.S. online shopping day ever. 
 
THIS WEEK: KEY ECONOMIC DATA
Wednesday: Gross Domestic Product (GDP), Job Openings and Labor Turnover Survey (JOLTS).  
Thursday: Consumer Price Index (CPI), Jobless Claims.
Friday: Consumer Sentiment.
 
THIS WEEK: NOTABLE COMPANIES REPORTING EARNINGS
Monday: Coupa Software (COUP)
Tuesday: Autozone (AZO), Mongodb, Inc. (MDB), Chewy, Inc. (CHWY)
Wednesday: Campbell Soup Company (CPB), Slack Technologies (WORK)
Thursday: Lululemon Athletica, Inc. (LULU), Adobe, Inc. (ADBE), Broadcom (AVGO), Costco Wholesale Corp. (COST)

Final Thoughts
With just a handful of weeks left in the year most are calling for a Santa Claus rally to take the S&P500 to around the 3,800 level.  It sounds like a lot, but it is really just a few percentage points higher than we are right now.  However, we won't look a gift horse (or Santa) in the mouth.  We'll gladly take it after the year we've all experienced.  Most of the market's return this year has come from tech.  In fact, if you remove the big tech companies from the S&P500 the return this year would be negative.  We'll dig into that a little more in next week's update.  Stay tuned...

Have a good week!

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