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New Record Highs on the Eve of New Year's Eve

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On the second-to-last trading day of the extraordinary year 2020, market indexes have struck brand new record highs, with the Dow +0.24% on the day, the Nasdaq +0.15% and the S&P 500 +0.13%. Much as we saw Monday — the last time the indexes made new all-time highs — the gains were relatively minor. Except for the Russell 2000, however, which gained another 1% this Wednesday.

Barring an outright disaster on New Year’s Eve trading (not to be completely discounted; this is still 2020, after all), the Russell 2000 will have posted its best-performing quarter in history. Year-to-date, the index is up nearly 19% — higher than both the Dow (+5.5%) and S&P 500 (+14.7%) year to date. Only the Nasdaq, by virtue of its terrific strength in “shelter at home” stocks like Zoom Video (ZM) during the early heart of the pandemic, did better: it’s up a whopping 41.6% from the start of the year.

Only Communication Services, Consumer Staples and Tech (toward the end of the trading day) wound up in negative territory; all other industries were gainers. Newsworthy items are basically what they were at the start of the day: a new economic stimulus package passing through Congress and the promise of Covid vaccines finally bringing us to herd immunity. That vaccinations are reportedly taking longer than expected to deliver looks not to have negatively affected the market, despite the possibility that it may delay our post-pandemic era.

Pending Home Sales for November came in lower than expected, -2.6% from the -0.7% reported the previous month. At 16.4% growth year over year, it still shows strength in the housing market. That said, it’s been a slow and steady dwindle downward from the 12-month peak in August, +24.3%. April was the lowest Pending Home Sales month on record — it fell 33.8% on the month, and didn’t start recovering until June.

Jobless Claims, which are released tomorrow morning, are anyone’s guess. It was looking like new unemployment claims were about to spike north of 900K again, but two weeks ago new claims dropped way down. Sometimes there is static and noise associated with these types of prints during holiday season; tomorrow’s report represents the holiday-shortened Christmas Week. A week from Friday we’ll get the non-farm payroll and Unemployment Rate report.

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