S&P Hits New Highs as Covid Cases Spike, The Recovery Slows, and Yields Climb
November 16, 2020 | FIRESIDE CHARTS
The S&P 500® Index closed at a record high on Friday as optimism on vaccine progress—which we heard more good news on this morning—battled a dramatic and accelerating spike in Covid cases. That spike is making its presence felt in the larger economic recovery though, where momentum has slowed. Small caps and the energy sector both enjoyed a boost themselves last week in what could become an interesting reversal of established trends. Meanwhile, yields have continued to rise as the Fed’s balance sheet soars to new heights… will that climb be complicated by the ongoing push-pull between spiking Covid cases and progress toward a vaccine?
1. As Covid surges…
Source: The Daily Shot, from 11/16/20
2. …The recovery begins to falter…
Source: The Daily Shot, from 11/16/20
3. …All while markets hit new highs. Will economic reality affect the markets again?
Source: The Daily Shot, from 11/16/20
4. Last week the Equal Weight S&P 500 index outperformed the market-cap weight S&P 500 Index by 3%. Is this the start of the long-awaited trend change or a transient reaction to a probable vaccine?
Source: The Chart Store, from 11/16/20
5. Small caps surged 7.5%, but have more work to do to join the large and mid-caps all-time highs…
Source: The Chart Store, from 11/16/20
6. Even the beleaguered Energy sector was up over 16% for the week. It is still an ugly looking chart!
Source: The Chart Store, from 11/16/20
7. Corporate insiders have been voting with their feet…
Source: The Daily Shot, from 11/16/20
8. We’ve shown that inflation still shows no signs of over heating. Are bond yields simply reacting to the massive increase in new bond supply?
Source: The Chart Store, from 11/16/20
9. Yields have been rising and so too have the Fed’s bond purchases. “Don’t fight the Fed” is ringing in our ears…
Source: The Chart Store, from 11/16/20
10. There appears to be some dry powder left over from previous stimulus measures…
Source: The Daily Shot, from 11/16/20
Disclosure: The charts and infographics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are they a recommendation to take any action. Individual securities mentioned may be held in client accounts. Past performance is no guarantee of future results.