Booster shot

11/16/20
  • Record highs for all major US indexes except the NDX
  • Oil surge fuels energy sector rally, financials also strong
  • This week: Retail sales—and retail earnings

Strong start, strong finish—that was last week’s stock market in a nutshell.

Last Monday stocks got a shot in the arm from reports that the Pfizer-BioNTech COVID vaccine was 90% effective1—news that was followed by a few new record highs in the major indexes and, ultimately, a second-consecutive week of gains. (The effective end of election uncertainty didn’t hurt, either.)

While the initial reaction was huge—Monday marked the Dow Jones Industrial Average’s (DJIA) sixth-biggest opening rally (+4%) in the past 35 years—the market spent the rest of the week in a choppy consolidation. But the S&P 500 (SPX) went out on a strong note with Friday’s 1.4% rally and new record close:

Chart 1: S&P 500 (SPX), 6/23/20–11/13/20. S&P 500 (SPX) price chart. Ups, downs—and a new record.

Source: Power E*TRADE


The headline: US market tags new highs amid “vaccine euphoria.”

The fine print: It wasn’t all euphoria, though. While many stocks that had been hit particularly hard by the virus (including airlines) skyrocketed on Monday, some of the pandemic’s biggest stay-at-home winners (cloud tech, videoconferencing, streaming entertainment) got hammered. But in both cases, these moves at least partially reversed themselves later in the week.

The number: 66.17 points—that’s how close the Dow came last Monday to hitting 30,000 for the first time.

The move: 23%, BioNTech’s (BNTX) intraday rally on Monday—not the week’s biggest, but definitely one of the news-worthiest.

The quotes: “We’re recovering, but to a different economy, and it will be one that is more leveraged to technology[.]” Fed Chairman Jerome Powell.2 “I’m not sure you can really absorb how shocking this is.” St. Louis Fed President James Bullard, noting the gains in the jobs market since the summer took four years to achieve in the last recession.3

The scorecard: It was new record highs all around—except for the Nasdaq 100, which bore the brunt of Monday’s stay-at-home tech sell-off. The Russell 2000 closed out a week in positive year-to-date (YTD) territory for the first time since mid-February:

US stock index performance table for week ending 11/13/20. S&P 500 (SPX), Nasdaq 100 (NDX), Russell 2000 (RUT), Dow Jones Industrial Average (DJIA).

Source (data): Power E*TRADE


Sector roundup: The strongest S&P 500 sectors last week were energy (+16.3%), financials (+8.3%), and industrials (+5.2%). The weakest sectors were consumer discretionary (-1.1%), information technology (-0.4%), and communication services (0.7%).

Highlight reel: Five Prime Therapeutics (FPRX) soared 237% to $18 on Wednesday, while Arcturus Therapeutics (ARCT) tumbled 45% to $34.61 on Monday.

Futures action: For a second-straight week, December WTI crude oil (CLZ0) surged the first three days of the week (+15% to a six-week high of $43.06) before pulling back, closing Friday at $40.13/barrel. When stocks jumped last Monday, December gold (GCZ0) tanked more than $100 to test support at its September–October lows (roughly $1,851/ounce), then recovered to end the week at $1,886.20.

Biggest futures up moves: January lumber (LBSF1) +9.6%, December ethanol (ZKZ0) +8.8%, January Brent crude oil (BF1) +8.4%. Biggest futures down moves: December VIX (VXZ0) -8.9%, December palladium (PAZ0) -6.8%, December silver (SIZ0) -3.7%.

Coming this week

Retail sales and housing numbers highlight this week’s economic calendar:

Monday: Empire State Manufacturing Index

Tuesday: Retail Sales, Export and Import Prices, Industrial Production and Capacity Utilization, Business Inventories, NAHB Housing Market Index

Wednesday: Housing Starts and Building Permits

Thursday: Existing Home Sales, Leading Indicators

Retail figures prominently in earnings, too—several nationwide chains are set to share their numbers:

Monday: Palo Alto Networks (PANW), Baidu (BIDU), Tyson Foods (TSN)

Tuesday: JinkoSolar (JKS), Kohl’s (KSS), Home Depot (HD), Walmart (WMT)

Wednesday: L Brands (LB), NVIDIA (NVDA), Target (TGT), TJX (TJX), Lowe's (LOW), Keysight (KEYS)

Thursday: BJ's Wholesale (BJ), Canadian Solar (CSIQ), Ross Stores (ROST), Intuit (INTU), NetEase (NTES), Workday (WDAY)

Friday: Foot Locker (FL), Hibbett Sports (HIBB)

Go to the E*TRADE market calendar for an up-to-date earnings schedule and complete list of splits, dividends, IPOs, and economic reports. The Active Trader Commentary also lists earnings announcements, IPOs and economic report times each morning.

Market mover update: On Friday Alibaba (BABA) slid below an important retracement level—setting up a test of the next support level noted in “Traders prepping for stock deals?” Hyliion (HYLN) is up around 23% since pivoting off its July lows at the start of this month (see “Stock tortoise seeks to become hybrid hare”).

 

Click here to log on to your account or learn more about E*TRADE's trading platforms, or follow the Company on Twitter, @ETRADE, for useful trading and investing insights.


1 The Guardian. Hopes rise for end of pandemic as Pfizer says vaccine is 90% effective. 11/10/20.

2 CNBC.com. Here are the things that scare Jerome Powell the most about the economy right now. 11/12/20.

3 MarketWatch.com. Job-market recovery this year is shockingly better than last recession: Fed’s Bullard. 11/13/20.

What to read next...

11/13/20
Unusual options trading activity highlights possible strategy for traders playing a potential stock breakout.

11/12/20
Airline stocks may be a crowded trade again, but savvy traders may have reasons to be selective about their seat assignment.

11/11/20
Traders may look to add digital retailer to their shopping lists—if a potential historical trend plays out again this year.

Looking to expand your financial knowledge?