The US stock market this week after the previous consolidation phase moved higher boosted mainly by positive coronavirus-vaccine news. The Dow Jones Industrial Average (DIA) surpassed for the first time the 30,000 level, and the S&P 500 (SPX) and Russell 2000 (IWM) made fresh record highs. Small-cap stocks outperformed, a stock rotation trend we have pointed out even when Russell 200 was still negative for 2020.

With a shortened trading week due to Thanksgiving, making new highs for major stock indices was not a problem, despite conflicting and mixed economic news. The risk-on mood for investing is dominant, but caution is needed as positive vaccine news and rising COVID-19 cases co-exist for now.

Economic News

The Markit Manufacturing PMI Preliminary showed improved business conditions in the manufacturing sector as it came in at 56.7, better than the forecast of 53. The Markit Services PMI which shows business conditions in the services sector was also reported better than expected with a figure of 57.7, better than the consensus of 55.3.

Durable Goods Orders reported came in at 1.3%, better than the forecast of 0.9%. The Gross Domestic Product Annualized reported figure of 33.1% was slightly less than the forecast of 33.2%. The Michigan Consumer Sentiment Index that tracks the willingness of consumers to spend reported was 76.9, just missed the forecast of 77.

New Home Sales were strong, with a figure of 0.99 million, better than the consensus of 0.97 million. But Personal Income slipped to -0.7%, worse than the forecast of 0.0% and Personal spending had a minor upbeat at 0.5%, better than the consensus of 0.4%.

The labor market continues to be weak and its recovery is still having tons of uncertainty. The Initial Jobless Claims released were 778K, worse than the forecast of 730K. And the Continuing Jobless Claims reported were 6.071 million, higher than the consensus of 6.02 million.

For the week of November 23– November 27, 2020, the major US stock market indexes closed as follows as of Friday, November 27, 2020:

• Dow Jones Industrial Average: Close 29910.37, +1.45% for the week, +4.81% Year-to-date

• S&P 500 Index: Close 3638.35 , +1.58% for the week, +12.62% Year-to-date

• Nasdaq Composite: Close 12205.85 , +2.53% for the week, +36.03%, Year-to-date

• Russell 2000: Close 1855.27 , +3.99% for the week, +11.20% Year-to-date

Economic events for the week Nov. 30- Dec. 4, 2020:

Important economic data for the week will be the ISM Manufacturing PMI, the ISM Services PMI, the weekly Initial and Continuing Jobless Claims, the Nonfarm Payrolls, and the Unemployment Rate.

Sources:

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

https://www.barchart.com

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