The Bottom Line
● The S&P 500 and Dow couldn’t advance for a third week in a row, but small cap stocks were able to extend their streak to three. The Russell 2000 small cap index has gained about +16% in November.
● For the second week in a row, markets opened on news of a promising new vaccine, only to fade as the week wore on after new coronavirus cases in the U.S. continued to surge and new lockdown measures were announced by various state and local officials.
● U.S. home sales and prices remain on the rise, fueled by ultra‐low rates and severe shortages in supply. Home sales were at 14‐year highs while prices hit all‐time highs.
Did vaccine euphoria run its course?
U.S. stock were mixed as the S&P 500 large cap index broke its two week win streak, while the Russell 2000 small cap index managed a third straight weekly gain. November is on pace for the biggest outperformance of small cap stocks over large cap stocks, currently +6.4 percentage points better, since November 2016 when small caps were +7.4 percentage points better. Like the prior week, this week began with news of another promising Covid‐19 vaccine which sent stocks higher. But as the week wore on, gloomy coronavirus news and new state lockdown measures weighed on stocks. Retail sales rose by the least amount in six months, since the initial lockdowns six months ago. New York City announced that the country’s largest school system was moving to remote learning. By Thursday, California issued a “limited Stay at Home Order” for a majority of its residents. The CDC also advised Americans against traveling for Thanksgiving. Even Wall Street is starting to sour from the Covid surge. On Friday JPMorgan economists warned that the U.S. economy may contract by ‐1% in the first quarter of 2021. Assessing the likelihood for mass vaccinations in 2021 figures to be a central theme for 2021 outlooks due in the coming months.
Digits & Did You Knows
MANY CAN’T WAIT ‐ An American worker may begin receiving a monthly Social Security retirement benefit as early as age 62, albeit at a reduced level from what is available at one’s “full retirement age.” Just under 50% of American “blue‐collar” workers take their retirement benefits at age 62, while only 38% of “white‐collar” workers begin their retirement benefits early (source: Center for Financial Security, December 2019, BTN Research).
NOT COMING BACK ‐ In the 6 months from 2/29/20 to 8/31/20, 163,735 US businesses have closed their doors, including 97,966 businesses (60%) that are likely closed for good (source: Yelp Economic Average, BTN Research).
Source: Bloomberg. Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange‐traded funds recommended by the Prime Capital Investment Advisors. The performance of those funds may be substantially different than the performance of the broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High‐YieldBond(iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 ValueETF);MidGrowth(iSharesRussell Mid‐CapGrowthETF);MidValue (iSharesRussell Mid‐Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares U.S. Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by: 30% U.S. Bonds, 5% International Bonds, 5% High Yield Bonds, 10% Large Growth, 10% Large Value, 4% Mid Growth, 4%Mid Value, 2% Small Growth, 2% Small Value, 18% International Stock, 7% Emerging Markets, 3% Real Estate.
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