All major U.S. indexes made new all-time highs despite not having yet confirmed news for a new fiscal stimulus package. Tech stocks and small-cap stocks outperformed. Economic data was again mixed, and vaccine news continued to support the positive momentum for stocks. Besides, the Fed’s pledge to keep rates low during the coronavirus crisis is supportive to stocks, but this can change in 2021 with a gradual shift to accommodative monetary policy as business and economic conditions should improve a lot, due to the vaccine for covid-19.

Economic News

The latest FOMC stated it will continue buying treasury bonds and agency mortgage-backed securities “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.” The Treasury 10-year yield closed at 0.9480% and rose during the week sending bond prices lower.

The Retail Sales were a miss coming in at -1.1 %, compared to the consensus of -0.3%. The Fed kept its interest rate unchanged at a range of 0.00%-0.25%. The housing market figures were with the Building Permits number of 1.639 M beating the estimate of 1.55 M, and the Housing Starts figure of 1.547 M also beating the consensus of 1.53 M.

The labor market during the pandemic struggles to find a sustainable trend. The Initial Jobless Claims were weaker than expected at 885 K, compared to the consensus of 800 K. The Continuing Jobless Claims figure reported was 5.508 M, better than the consensus of 5.598 M.

For the week of December 14- December 18, 2020, the major US stock market indexes closed as follows on Friday, December 18, 2020:

• Dow Jones Industrial Average: Close 30179.05, +0.44% for the week, +5.75% Year-to-date

• S&P 500 Index: Close 3709.41, +1.25% for the week, +14.81% Year-to-date

• Nasdaq Composite: Close 12755.64, +3.05% for the week, +42.16%, Year-to-date

• Russell 2000: Close 1969.99, +3.05% for the week, +18.07% Year-to-date

Economic events for the week December 21- December 25, 2020:

Important economic data for the week will be the weekly Initial and Continuing Jobless Claims, the Chicago Fed National Activity Index, the Gross Domestic Product Annualized(Q3), the Michigan Consumer Sentiment Index, and the Durable Goods Orders.

Sources:

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

https://www.barchart.com

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