Significant optimism drove markets this week as investors reacted to further positive news around vaccine effectiveness. AstraZeneca was the latest vaccine producer in the U.S. to report highly promising results from its current coronavirus vaccine. Multiple U.S. stock indexes reached all-time highs amidst the positive news, alongside an impending holiday season. 

Foreign markets increased in value on balance as well, while the dollar weakened against foreign currencies and gold declined.

President Donald Trump stated that he would step aside if enough Electoral College votes come in for Joe Biden. This communication indicates a reduced risk for significant political turmoil in the U.S., which has been an ongoing potential risk for the equities markets. 

It remains to be seen how much travel the Thanksgiving holiday season saw this week, and what ramifications the gatherings have on the ongoing pandemic.

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Weekly Returns

S&P 500: 3638.4 (2.27%)

FTSE All-World ex-US(VEU): 56.91 (2.0%)

US 10 Year Treasury Yield: 0.85% (2.29%)

Gold: $1,787.63 (-4.6%)

EUR/USD: 1.196 (0.8%)

Major Events

• Monday – The Trump administration announced that they will begin supporting the transition of President-elect Biden’s administration to the White House.
• Tuesday – The Dow Jones Industrial Average climbed above 30,000 for the first time in the Index’s history.
• Wednesday – Delta Airlines and their pilots reached a deal for pilots to receive reduced pay in exchange for furlough avoidance throughout 2021.
• Thursday – U.S. markets were closed for the Thanksgiving holiday.
• Friday – The S&P 500 reached an all-time high during the shortened trading day.

Our Take: A Moment of Reflection

With the Dow Jones Industrial Average’s 30,000 milestone this week, we wanted to take a moment to acknowledge that the index has risen over 60% from its March lows, in a span of seven months. The 30-stock index, composed of blue-chip companies, has had a phenomenal run from its recent low, in the face of one of the most jarring market events in recent memory.

We suspect that volatility will remain as the continued realities of the virus, vaccination timing, and any further U.S. stimulus bring future surprises. The past seven months have been a very positive, and perhaps unexpected, rebound for the U.S. equities markets.

This week acts as a fresh reminder that, while at an individual level COVID-19 continues to wreak havoc, the markets continue to run higher despite the challenges faced by many. We view this as a reinforcement of our continued advice to our clients: Do your best to avoid timing the market.