Broker Check

Adaptive Advice – Weekly Market Update: Tech stocks and small-caps end week as winners 18-Dec-20

December 18, 2020
Share |

A weekly market update of market activity and events, featuring commentary, analysis written with individual investors in mind.

Each of the major indices set fresh all-time highs this week in a continuation of the market’s positive trend. The Nasdaq Composite (+3.1%) and Russell 2000 (+3.1%) both advanced 3.1%, while the S&P 500 (+1.3%) and Dow Jones Industrial Average (+0.4%) finished with more modest gains.

As expected when the Nasdaq noticeably outperforms, the information technology sector (+3.2%) claimed the top spot in the S&P 500, followed by consumer discretionary (+2.3%) and materials (+1.9%). The energy (-4.3%) sector succumbed to profit-taking interest with a 4.3% decline, and the communication services sector (-0.5%) was the one other negative sector.

Positive factors throughout the week included news that a stimulus deal is close to being reached, the Fed affirming its “extraordinarily accommodative” policy stance, the Pfizer (PFE)-BioNTech (BNTX) coronavirus vaccine rolling out in the U.S., and news that Apple (AAPL) is planning to increase iPhone production by 30% yr/yr in the first half of 2021.

To be more specific, the size of a potential stimulus deal is looking to be around $900 billion, although negotiations extended into the weekend amid continued disagreements. The Fed committed to purchasing at least $120 billion of Treasury and mortgage-backed securities per month until substantial progress has been made with respect to employment and inflation targets.

The Fed’s stance helped investors overlook relatively disappointing retail sales data for November and higher weekly initial claims, and it also put downwards pressure on the U.S. Dollar Index, which fell to its lowest level since April 2018.

The 10-yr yield increased six basis points to 0.95% amid increased selling interest in part due to the Fed’s dovish policy and expectations for new supply of Treasuries needed to finance a potential stimulus deal.

Make sure you subscribe for our Weekly Market Update to receive our update directly to your email each week. The market will be closed next Friday, December 25 in celebration of Christmas and will re-open Monday, December 28.

S&P 500 Index is an unmanaged group of securities considered to be representative of the stock market in general. NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. The Dow Jones Industrial Average is a popular indicator of the stock market based on the average closing prices of 30 active U.S. stocks representative of the overall economy. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. It is not possible to invest directly in an index.

Securities offered through Kestra Investment Services, LLC, (Kestra IS), member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC, (Kestra AS) an affiliate of Kestra IS. Adaptive Wealth Partners is not affiliated with Kestra IS or Kestra AS. Kestra Investment Services does not provide legal or tax advice. Investor Disclosures

This site is published for residents of the United States only. Registered Representatives of Kestra IS and Investment Advisor Representatives of Kestra AS may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all of the products and services referenced on this site are available in every state and through every representative or advisor listed. Neither Kestra IS or Kestra AS provides legal or tax advice. For additional information, please contact our Compliance department at 844-553-7872