Market Data as of Week Ending 11/13/2020 unless noted otherwise.
U.S. stock prices advanced largely based on positive coronavirus vaccine news and better than expected earnings growth. According to FactSet, 84% of companies have reported beating earnings estimates for the third quarter. If the figure holds, it will tie last quarter as the highest percentage of S&P 500 companies reporting a positive earnings surprise since FactSet began tracking this metric in 2008. Small and medium sized company stocks generally outperformed large company peers, while growth stocks lagged value counterparts. Most major economic sectors were positive with the most notable gains in the energy and financial sectors. Growth oriented sectors such as information technology and health care lagged the S&P 500 Index. Developed foreign stocks in Europe and Asia outperformed U.S stocks while Emerging Market stocks underperformed developed foreign markets.
U.S. Treasury yields rose this past week reaching their highest levels since March. High yield corporate bonds were once again the top performing asset class and shorter term bonds generally outperformed longer term bonds. Investment grade corporate bonds are yielding approximately 2% and high yield corporate bonds are yielding more than 5%.
Economic data released during the week was mixed and largely overshadowed by political uncertainty and coronavirus news. Initial unemployment claims for the week were 709,000 and less than 7 million Americans continue to claim ongoing unemployment benefits. Sentiment data was less positive as the University of Michigan’s preliminary measure of consumer sentiment in November missed expectations and dropped to a three-month low. France, Portugal, and Germany have extended their partial lockdowns in an attempt to slow the spread of coronavirus. Japanese Prime Minister Yoshihide Suga asked his cabinet to provide a proposal for a third stimulus package as Japan attempts to support the economy through a resurgence in coronavirus infections.