The market rode low holiday volume to a strong close in the last week of 2020. After dropping over 35% during the pandemic crash, the market ended the year well into positive territory and at all time highs. Employment data came in better than expected as high-risk individuals began to receive the COVID vaccine. Find all this plus more on the impact of Tuesday’s Georgia Senate runoff in this week’s @KonvergentWP Market Update Blog.
Here are the top three things we’re covering this week’s blog:
The Market
The S&P was up 1.44% on the final week of a historical trading year. After spiking higher on Monday, the market was moderately flat until the final hours of trading on Thursday. With many large investors on vacation, the market has drifted higher in the past month on relatively low volume. The “Santa rally” will end next week as the new year brings those on vacation back to work. This, as well as the upcoming Georgia runoff[1], could bring some volatility to the market in the first few weeks of the new year.
Economic Data
New claims decreased more than expected[2] last week to 787,000. This was a step in the right direction from the concerning data reported in prior weeks. Pandemic unemployment fell by over 88,000 to 308,000, bringing the total for new claims to 1,095,000. With millions around the country starting to be vaccinated this reading will be a key indicator of when the unemployment situation is beginning to stabilize. Its critical to note that new claims remain nearly five times higher than this time last year.
Continuing claims decreased slightly last week to 5.219 million. Although the rate of change has slowed significantly, the consistent drop in this reading each week is a promising sign for the unemployment picture.
Total Claims for Unemployment from all programs decreased last week to 19.56 million. All in all, this was a decently positive week of the unemployment situation with claims falling in most major measurements. The only large jump came in extended benefits which is more of a short-term concern.
Articles of Interest
Georgia Senate Runoff – Now that the holidays have ended, all eyes are focused on the upcoming Georgia Senate runoff. Check out this article for a summary of what is at stake for the market during this heated event.
Vaccination Update – As COVID continues to wreak havoc across the globe, healthcare workers around the world are scrambling to quickly vaccinate those most at risk. Check out this article for the latest on the vaccination effort.
Social Media Post of the Week
Happy New Year from all of us at Konvergent! We hope that you have been able to find some time to celebrate with your loved ones.
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Non-Financial Story of the Week
We are in the process of revamping our blog and video schedule with plans to bring more variety to our posts beyond market updates. Our goal is to include topics across the financial spectrum including interviews from other industry experts that we believe will provide meaningful value the content we are creating. Look for more on this in the coming days and weeks!
Bottom Line
The market continued to drift higher without any major headlines to drive volatility. However, with a contentious runoff around the corner, the market will be on close watch. Employment data continues to improve despite the concerns of a rapidly spreading COVID variant[3]. With all of this in mind, we remain optimistic for the market to perform well during a quarter of sure beats in year over year data comparisons.
If you have any questions about any of the information in this week’s blog or what you should be doing right now with your personal and business planning, do not hesitate to reach out to us by sending an email to info@konvergentwealth.com or calling us at 253-236-7000.
[1] https://www.cnbc.com/2020/11/17/here-are-the-key-dates-in-the-georgia-us-senate-runoff-elections.html
[2] https://www.cnbc.com/2020/12/31/weekly-jobless-claims.html
[3] https://www.msn.com/en-us/news/world/stricter-lockdown-measures-could-be-introduced-across-england-as-mutant-coronavirus-strain-is-now-everywhere/ar-BB1c8K8K?item=flights%2525253Aprg-enterpriseblended-t%2525252C1s-ent-microsoft