U.S. Stocks Grind Higher To Close 2020
Shain Vernier • 1 min read
It’s the last trading day of 2020 and sentiment toward stocks is largely neutral. With only a few hours to go in the session, the DJIA DOW (-15), S&P 500 SPX (0), and NASDAQ (-29) are all hovering near flat. Given the quiet economic calendar and approaching New Year’s holiday, the modest action comes as little surprise.
On the labour market front, U.S. employment appears to be softening. Here’s a quick look at this morning’s weekly jobs numbers:
Event Actual Projected Previous
Continuing Jobless Claims (Dec. 18) 5.219M 5.390M 5.322M
Initial Jobless Claims (Dec. 25) 787K 833K 806K
Initial Jobless Claims 4-Week Avg (Dec. 25) 836.75K NA 819.00K
Both Initial and Continuing Jobless Claims have beaten projections and are down from the previous release. However, the Initial Jobless Claims 4-Week average is troubling. It appears as though seasonal holiday employment has lagged, despite solid consumer spending.
All in all, there isn’t much that can be said about the U.S. employment situation. Regional COVID-19 shutdowns, small business closures, and extended unemployment benefits are greatly impacting these figures. Although there has been a bold recovery for stocks, certain industrial sectors have been hit hard by COVID-19. Hopefully, 2021 will see the U.S. labor market trend toward maximum employment.
Stocks Noncommittal As 2021 Draws Near
The 2020 weekly chart for the March E-mini S&P 500 is a textbook example of a bullish trend. Since the COVID-19 panic of March, there have been only a few minor pullbacks.
Overview: Right now, it’s all-systems-go for American stocks. The drivers of the bull-run are local to government stimulus, FED QE, and a forthcoming end to the U.S./China trade war. While huge questions surrounding COVID-19 remain, it looks like a strong Q1 2021 is a likely scenario moving forward.