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    Capital Markets | 4 min read

    Market Commentary: Week of November 23, 2020

    Last Week:

    We began the week with Moderna’s announcement Monday that their COVID-19 vaccine achieved a 94.5% efficacy in preventing the virus. This came on the heels of the prior Monday announcement of Pfizer’s successful trials. Moreover, on Wednesday, Pfizer refreshed their numbers from 90% efficacy to 95%. The stocks reacted positively to this great news. However, while mass distribution of the vaccines remains months away, we are breaking all records throughout the nation (as well as Europe) for infections and hospitalizations. During the week, the CDC essentially plead with the public to cancel Thanksgiving --knowing that it will probably be a massive super-spreader event. The current state of things sobered up the equity markets and caused a small rally in Treasury rates. Also putting a little “risk off” feel for equities and corporate bonds was Treasury Secretary Mnuchin’s request to the Fed that it return nearly $500 billion of unused CARES Act funds. The funds come from such programs as the Primary and Secondary Market Corporate Credit Facilities (PMCC and SMCC), as well as similar municipal bond purchasing facilities.

    • The S&P 500 lost .8 % for the week. The average daily move for the week was .78%.

    • The NASDAQ was nearly flat for the week. The average daily move for the week was .6%.

    • The 2-year Treasury yield fell 2 basis points for the week, closing at .16% on Friday.

    • The 10-year Treasury yield decreased 7 basis points for the week, closing at .83% on Friday.

    • The VIX Index was flat for the week, closing at 23.7 on Friday.

    • The MOVE Index was flat for the week, closing at 42.31 on Friday.

    • 5-year Investment Grade Corporates (as measured by Markit CDX) widened 2 basis points for the week, closing at 57 basis points on Friday. High-yield corporate debt (as measured by Markit CDX) tightened 14 basis points, closing at 340 basis points on Friday.

    • US Dollar Index was flat for the week, closing at 92.40 on Friday.

    • WTI Crude increased 5% the week, using the January WTI Futures contract, closing at 42.42 on Friday.

    • Gold, as measured by the December 2020 futures contract, decreased .7% for the week closing at 1,872 on Friday.

    The Week Ahead:

    Another Monday and another great COVID-19 vaccine development! Oxford and AstraZeneca announced that they are joining Pfizer and Moderna with successful vaccines. Stocks are reacting positively. It seems that markets have had the weekend to digest late last week’s rift between outgoing Treasury Secretary Mnuchin and Fed Chairman Jerome Powell regarding the return of unused funds to Treasury. It appears that the move is being accepted without much angst. Since these funds were part of the CARES Act, the risk to the markets is if the markets have a redux of last March, the funds will not be available to the Fed to utilize in the Corporate and Municipal bond markets. Heaven forbid risk-takers ever suffer the consequences of their actions in a market meltdown! The action this week will be packed into 3 days as we have the Thanksgiving holiday Thursday and the Thanksgiving hangover Friday.



    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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