Note: The US investment markets, and my office, will be closed Thursday, November 26th, for the Thanksgiving holiday. The US markets, and my office, will close Friday, November 27th, at 1PM. Normal operations resume Monday, November 30th. In the meantime, enjoy our latest Weekly Economic and Stock Market Commentary.
As for the stock market specifically:
International stocks led the gains last week, while the Nasdaq Composite managed a small gain. The S & P 500 and the Dow Jones Industrial Average made record highs last week, but managed to end the week in negative territory. To state the obvious, time will tell if that is a problem, or simply one of those things.
Beyond the headlines, some interesting things are/have been taking place. Meaning, for the first time in a long time, I’m seeing traction (strength) in U.S. small and mid-cap stocks and emerging markets too.
The bullish percent indicators all made good gains last week. The NYSE Bullish Percent Indicator crossed above the 70 yard-line that many of you saw me describe at one point. History shows that simply reaching this level is not a reason to run for the hills. In reviewing the more than 60 year history of the indicator, there is ample evidence of us remaining on offense for months once we hit the 70 yard-line. I recommend staying in WEALTH ACCUMULATION MODE.
Remember, Xs mean OFFENSE or wealth accumulation, while Os mean DEFENSE, or wealth preservation.
Below is where our indicators stand as of November 20, 2020 (Courtesy Dorsey, Wright, and Associates).
On a general note:
Secretary of the Treasury Mnuchin announced the end of some crisis lending programs. These programs have unused money left set aside from their inception earlier this year. These programs have about $455 billion dollars available that Secretary Mnuchin asked Congress to reallocate. The Federal Reserve asked Mr. Mnuchin to reconsider, which he did promptly, and came to the same conclusion.
The National Association of Realtors told us that existing home sales in October rose to a 14 year high of an annualized rate of 6.85 million homes. The average sales price was a twhopping 15.5% higher than October 2019, at $313,000, which hit a record high, even when adjusted for inflation.
The Commerce Department provided us the news that October retail sales rose by 0.3%. It was the 6th consecutive monthly gain in the number. Sales were good at internet retailers, automobile dealers, and gas stations. Sales were weak at traditional retailers, grocers, bars, and restaurants.
Finally, Federal Reserve Chairman Jerome Powell made a speech last week regarding the fiscal policy set by President and Congress. Chairman Powell called for more fiscal stimulus for the economy.