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    Capital Markets | 4 min read

    Market Commentary: Week of November 16, 2020

    Last Week:

    Vaccine hopes (production and distribution aside) have many market participants looking past the projected nightmare that many in the medical and scientific community say is coming in late November. The Fed certainly isn’t, as Chairman Powell and other Fed bank presidents and board governors warned that the oncoming virus surge without significant aid to citizens and businesses will have a profoundly negative effect on the economy in 2021. Nevertheless, equity and other risk markets looked to the bright side of these grave warnings as it indicates that the Fed will stay ultra-accommodative, even as the virus meets a vaccine in 2021. Wishful thinking? Maybe, but so far it’s been working out!

    • The S&P 500 increased 2.1% for the week closing at a new all-time high on Friday. The average daily move for the week was .89%.

    • The NASDAQ declined .6% for the week. The average daily move for the week was 1.32%.

    • The two-year Treasury yield increased 2.5 basis points for the week, closing at .18% on Friday.

    • The 10-year Treasury yield increased eight basis points for the week, closing at .90% on Friday.

    • The VIX Index decreased seven percent for the week, closing at 23.1 on Friday.

    • The MOVE Index increased eight percent for the week, closing at 42.95 on Friday.

    • Five-year Investment Grade Corporates (as measured by Markit CDX) widened one basis point for the week, closing at 55 basis points on Friday. High-yield corporate debt (as measured by Markit CDX) tightened 17 basis points, closing at 354 basis points on Friday.

    • U.S. Dollar Index increased .6%, closing at 92.76 on Friday.

    • WTI Crude increased eight percent for the week, using the December WTI Futures contract, closing at 40.13 on Friday.

    • Gold, as measured by the December 2020 futures contract, decreased 3.3% for the week, closing at 1,886 on Friday.

    The Week Ahead:

    Equity markets around the world are up sharply this morning—repeating last Monday morning—as now Moderna’s COVID-19 vaccine has shown in a large study to be 94.5% effective. This is more unquestionably great news on the vaccine front. The question now is, can we get through the next few months as the virus is surging through the U.S. and Europe without another economic meltdown?

    Stocks are saying yes, as they are up strongly this morning and the rotation out of “Big Tech” and into cyclical and “Value” stocks continues from last week. Meanwhile, the political drama around President Trump’s election loss seems to be heading to the final curtain. Major pieces of the campaign’s lawsuit in Pennsylvania have been withdrawn. There is talk of the President taking some final action through executive orders to pound China and leave President-Elect Biden with a big mess. That could bring a bit of pain to the markets, but so far nothing. The President also continues to be more aggressive on Twitter in claiming that the election was stolen from him but still has not presented proof. At this point, however, both the bond and stock markets seem to have put the 2020 election results behind them.



    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.


    Investing involves certain risks, including possible loss of principal. You should understand and carefully consider a strategy’s objectives, risks, fees, expenses and other information before investing. The views expressed in this commentary are subject to change and are not intended to be a recommendation or investment advice. Such views do not take into account the individual financial circumstances or objectives of any investor that receives them. All indices are unmanaged and are not available for direct investment. Indices do not incur costs including the payment of transaction costs, fees and other expenses. This information should not be considered a solicitation or an offer to provide any service in any jurisdiction where it would be unlawful to do so under the laws of that jurisdiction. Past performance is no guarantee of future results.

    © 2020 SWBC. All rights reserved. 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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