A consolidation with minor losses for the major US stock market indices was the main theme for this week. Dow Jones and S&P 500 had minor losses, Nasdaq minor gains, and Russell 2000 again outperformed with gains over 2%. The positive vaccine news and developments are still a key catalyst to move the stock market, but profit-taking after the historic highs for S&P 500 makes sense. On the economic data, the jobs-data release showed worse-than-expected initial jobless claims, and this is a major fundamental factor that is alarming for the path and pace of the US economic recovery. A rotation in stocks and sectors is also present, especially moving capital into small-cap stocks and cyclical sectors such as finance and energy.

Economic News

The Retail Sales were a miss with several 0.3%, less than the forecast of 0.5%. The Industrial Production was a beat with a figure of 1.1%, slightly better than the forecast of 1.0%. The housing market continues to show strength, with a figure for the Building Permits of 1.545 million, lower than the forecast of 1.56 million but with a strong figure for the Housing Starts of 1.53 million, better than the forecast of 1.46 million.

Initial Jobless Claims last week were reported to be 742,000 higher than the forecast of 707,000, and the Continuing Jobless Claims fell to 6.372 million, lower than the forecast of 6.47 million.

We do not yet see a stable and strong improvement in the Initial Jobless Claims, and with weak Retail Sales numbers, this mix of week economic data is a setback for quick economic recovery and growth for the US economy.

For the week of November 16– November 20, 2020, the major US stock market indexes closed as follows on Friday, November 20, 2020:

• Dow Jones Industrial Average: Close 29263.48, -0.73% for the week, +2.54% Year-to-date

• S&P 500 Index: Close 3557.54, -0.77% for the week, +10.11% Year-to-date

• Nasdaq Composite: Close 11854.97 , +0.22% for the week, +32.12%, Year-to-date

• Russell 2000: Close 1785.34 , +2.37% for the week, +7.00% Year-to-date

Weekly Stocks Losers

These are the top 3 losers, stocks with 5 days of consecutive price declines:

1. Atlas Technical Consultants Inc (NASDAQ:ATCX), Close 5.23, 5-day change -23.76%

2.  Flexsteel Inds (NASDAQ:FLXS), Close 24.81, 5-day change -20.99%

3. Applied Genetic Tech (NASDAQ:AGTC), Close 3.99, 5-day change -19.56%

Economic events for the week November 23- November 27, 2020:

Important economic data for the week will be the Chicago Fed National Activity Index, the Manufacturing Purchasing Managers Index (PMI), the Services Purchasing Managers Index (PMI), the Personal Income and Personal Spending figures, the Durable Goods Orders, the Gross Domestic Product Annualized(Q3), the Michigan Consumer Sentiment Index, Initial and Continuing Jobless Claims. Overall a rich economic calendar with very important key financial data.

Sources:

https://www.wsj.com/market-data/stocks/us/indexes

https://www.barchart.com

https://www.fxstreet.com/economic-calendar