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    Capital Markets | 4 min read

    Market Commentary: Week of December 28, 2020

    Last week:

    The operative word last week was “flat.” While there was much excitement around the stimulus/relief bill—finally passed by the Congress but then surprisingly balked at by President Trump—stocks and bonds traded in a pretty narrow range. The other big news was the UK and EU finally, after over four years of drama, signed a Brexit trade agreement. Nonetheless, one could feel investors signing off for the Christmas holiday by Tuesday.

    Somewhat perversely, in a year like no other in our recent history, most investors could leave the field for the last two weeks of Anno Horribilis in great shape, whether trading in equities, corporate bonds and loans, commodities (many made a fortune when oil crashed this April), or Mortgage-Backed Securities and Treasuries. That isn’t supposed to happen, and the only time it does is when the Fed makes it happen. Therefore, it is not too late to send Jerome Powell a nice thank you gift!

    • The S&P 500 was flat for the week. The average daily move for the week was .25%
    • The NASDQ advanced 3.1% for the week. The average daily move for the week was .38%.
    • The two-year Treasury yield was flat for the week, closing .12% on Thursday.
    • The 10-year Treasury yield declined two basis point for the week, closing at .93% on Thursday.
    • The VIX Index was flat for the week closing at 21.53 on Thursday.
    • The MOVE Index fell seven percent for the week, closing at 42.11 on Thursday.
    • Five-year Investment Grade Corporates (as measured my Markit CDX) was unchanged for the week closing at 54 basis points on Thursday.
    • High Yield corporate debt (as measured my Markit CDX) was flat for the week, closing at 301 basis points on Thursday.
    • US Dollar Index increased 0.3% for the week, closing at 90.03 on Thursday.
    • WTI Crude declined two percent the week using the February WTI Futures contract, closing at 48.23 on Thursday.
    • Gold, as measured by the February 2021 futures contract, was flat for the week closing at 1,883 on Thursday.

    The Week Ahead:

    Stocks are up this morning as President Trump finally signed the stimulus/relief bill. Why did he delay? He said it was because he wanted direct payments to individuals raised from $600 to $2,000, but since he did not engage at all in the crafting of the bill (Treasury Secretary Steve Mnuchin represented the White House in the negotiations with Congress), and then he just simply caved Sunday evening, perhaps it was something else. What it was we’ll probably never know. Our guess is he used the last piece of leverage he had over Senate Leader Mitch McConnell to get something like a promise to kick up a fuss at Congress’ certification of the 2020 election for President. Whatever the case, these actions will likely cause delays getting help to the economy and individuals. We have another holiday-shortened week this week and we expect trading to be thin, yet volatile. 



    An index is unmanaged and not available for direct investment. Definitions sourced from Bloomberg.

    • The Bloomberg Barclays Global Aggregate Negative Yielding Debt Market Value Index represents the portion of the Bloomberg Barclays Global Aggregate Index that measures the aggregate value of global debt with a negative yield.

    • The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

    • The NASDAQ Composite Index is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of February 5, 1971.

    • The Cboe Volatility Index® (VIX) is a calculation designed to produce a measure of constant, 30-day expected volatility of the US stock market, derived from real-time, mid-quote prices of weekly S&P 500® Index (SPX) call and put options with a range of 23 to 37 days to expiration.

    • The ICE BofA MOVE Index is a yield curve weighted index of the normalized implied volatility on 1-month Treasury options. It is the weighted average of implied volatilities on the CT2 (Current 2 Year Government Note), CT5 (Current 5 Year Government Note), CT10 (Current 10 Year Government Note), and CT30 (Current 30 Year Government Note), with weights 0.2/0.2/0.4/0.2 respectively.

    • The Markit CDX North America Investment Grade Index is composed of 125 equally weighted credit default swaps on investment grade entities, distributed among 6 sub-indices: High Volatility, Consumer, Energy, Financial, Industrial, and Technology, Media & Tele-communications. Markit CDX indices roll every 6 months in March & September.

    • The Markit CDX North America High Yield Index is composed of 100 non-investment grade entities, distributed among 2 sub-indices: B, BB. All entities are domiciled in North America. Markit CDX indices roll every 6 months in March & September.

    • The U.S. Dollar Index (USDX) indicates the general international value of the USD. The USDX does this by averaging the exchange rates between the USD and major world currencies. Intercontinental Exchange (ICE) US computes this by using the rates supplied by some 500 banks.


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    Securities offered through SWBC Investment Services, LLC, a registered broker/dealer. Member FINRA & SIPC. Advisory services offered through SWBC Investment Company, a Registered Investment Advisor, registered as such with the US Securities & Exchange Commission. SWBC Investment Services, LLC is under separate ownership from any other named entity. SWBC Investment Services, LLC a division of SWBC, is a nationwide partnership of advisor.

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    John Tuohy

    John Tuohy is CEO of SWBC Investment Services, LLC, a Broker/Dealer and SWBC Investment Company, an SEC Registered Investment Advisor (RIA). In his role, John is responsible for identifying, developing, and executing the division's strategic plan and all business development, sales, and marketing activities.

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