Monthly Archives: December 2020
Most Major Indexes Reached New Highs as Coronavirus Vaccines were Administered
Market Data as of Week Ending 12/18/2020 unless noted otherwise.
EQUITIES
U.S. stock prices advanced and most major indexes reached new highs as coronavirus vaccines were administered and the government closes in on a $900 Billion stimulus bill. Small and medium sized company stocks generally outperformed large company peers and growth stocks outperformed value. Sector performance was mixed as energy stocks rotated out of a leadership position and were down more than 4%. Information technology, consumer discretionary, and the materials sectors outperformed while defensive sectors such as communication services, utilities, and consumer staples lagged. Developed foreign stocks in Europe and Asia narrowly outperformed U.S stocks, while Emerging Market stocks lagged developed foreign markets.
BONDS
U.S. Treasury yields rose this past week as the Federal Reserve (Fed) voted to maintain monthly bond purchases of at least $120 billion and reaffirmed their commitment to keeping short term borrowing rates near zero through 2023. High yield corporate bonds were the best performing asset class while Long-term government bonds were down more than 1%. Investment grade corporate bonds are yielding approximately 1.8% and high yield (below investment grade) corporate bonds are yielding more than 4.5%.
MACROECONOMIC DATA
Economic data released during the week was worse than expected but largely overshadowed by the virus and prospects of a fiscal spending package. Weekly initial unemployment claims increased to 885,000 which is the highest level in three months and approximately 5.5 million Americans continue to claim ongoing unemployment benefits. Housing continues to be an area of strength as single-family starts rose for the seventh consecutive month to an annualized rate of 1.2 million, the highest since 2007. Several leaders in Europe had to quarantine themselves after French President Emmanuel Macron developed COVID-19 symptoms and lockdowns were tightened throughout parts of Germany and the UK.
5.8 Million Americans Continue to Claim Ongoing Unemployment Benefits
Market Data as of Week Ending 12/11/2020 unless noted otherwise.
EQUITIES
U.S. stock prices declined after several major indexes reached new highs in the middle of the week. Small company stocks delivered gains and were the notable exception for the week as they outperformed both medium sized and large company peers. Style factors such as value and growth were mixed and largely dependent on size. Sector performance was mixed as energy led the market, followed by traditionally defensive sectors such as communication services, utilities, and consumer staples. Despite the relative performance of other defensive sectors, real estate was the worst performing sector and declined almost 3% for the week. Developed foreign stocks in Europe and Asia narrowly outperformed U.S stocks, while Emerging Market stocks outperformed developed foreign markets.
BONDS
U.S. Treasury yields declined this past week as prospects for another round of fiscal stimulus have declined despite worsening virus and economic trends. Long-term government bonds were the best performing asset class while short-term investment grade corporate bonds lagged. Investment grade corporate bonds are yielding approximately 1.9% and high yield corporate bonds are yielding more than 4.5%.
MACROECONOMIC DATA
Economic data released during the week was mixed as consumer sentiment was better than expected, but largely overshadowed by the virus and employment conditions. Weekly initial unemployment claims increased from 716,000 to 853,000 and approximately 5.8 million Americans continue to claim ongoing unemployment benefits. The increase in continuing claims ended a streak of consecutive weekly declines that dated back to September and is a concerning figure for the recovery. Several countries in Europe have either extended or are expected to extend lockdowns to combat the coronavirus while Japan announced a third round of fiscal stimulus that is estimated to be more than $700 billion to support the economy.
Mid Atlantic to Serve as Trustee for Paychex’s PEP
Mid Atlantic is pleased to serve as the trustee for Paychex’s Pooled Employer Plan
Paychex Introduces a Pooled Employer Plan, A New Cost-Effective Retirement Plan for U.S. Businesses and Their Employees
Dow Jones Industrial Average and Russell 2000 Indexes ended November with the Largest Monthly Gains in More than 30 Years
Market Data as of Week Ending 12/04/2020 unless noted otherwise.
EQUITIES
U.S. stock prices advanced after the Dow Jones Industrial Average and Russell 2000 indexes ended November with the largest monthly gains in more than 30 years. Small and medium sized company stocks generally outperformed large company peers, while growth stocks lagged value counterparts. Sector performance was mixed as energy led the market, followed by health care and information technology. Utilities and consumer discretionary were the only sectors that declined for the week. Developed foreign stocks in Europe and Asia lagged U.S stocks for the first time in several weeks, while Emerging Market stocks outperformed developed foreign markets.
BONDS
U.S. Treasury yields rose this past week as investors priced in the prospects for another round of fiscal stimulus. Since shorter term yields were stable, the spread between 10-year and 2-year treasuries reached its widest level since early 2018. High yield corporate bonds were once again the top performing asset class and government bonds lagged. Investment grade corporate bonds are yielding approximately 1.9% and high yield corporate bonds are yielding more than 4.5%.
MACROECONOMIC DATA
Economic data released during the week was generally weaker than expected. American businesses added 245,000 jobs in November which led to a decline in the unemployment rate to 6.7%. Despite reaching a post pandemic low in the unemployment rate, the report was disappointing since consensus expectations were for a gain of 460,000 jobs. Coronavirus continues to put pressure on Europe across a variety of measures. Consumer prices in the eurozone declined in November, which was the fourth consecutive month of consumer price declines and increases the risk of economic instability for the region.